CPLR § 4545

CPLR § 4545 Admissibility of collateral source of payment

Johnson v New York City Tr. Auth., 2011 NY Slip Op 06402 (1st Dept., 2011)

In a personal injury action, the court must reduce the damages award "if . . . any element of the economic loss encompassed in the award was or will be replaced, in whole or in part, from a collateral source" (Oden v Chemung County Indus. Dev. Agency, 87 NY2d 81, 83-84 [1995]; CPLR 4545[a])^[FN3]. An offset is permitted "only when the collateral source payment represents reimbursement for a particular category of loss that corresponds to a category of loss for which damages were awarded" (id. at 84). In other words, there must be a match between the item of economic loss awarded by the jury and the collateral source payment. Because CPLR 4545(a) is in derogation of the common law, its provisions must be strictly construed (id. at 86), and the defendant has the burden of establishing entitlement to a collateral source offset by clear and convincing evidence (Kihl v Pfeffer, 47 AD3d 154, 163-64 [2007]; Young v Knickerbocker Arena, 281 AD2d 761, 764 [2001]).

The trial court correctly found that defendant did not meet its burden of showing that the loss of earnings award should be offset by the amount of plaintiff's accidental disability retirement pension. Defendant does not dispute that under Oden it bears the burden of showing that there is a "direct correspondence" between an item of economic loss awarded by the jury and a collateral source payment (87 NY2d at 87). Defendant argues, however, that a disability pension can only be construed as a replacement for the wages plaintiff would have earned if she had not been injured and had remained on the police force.

However, Oden rejected such a broad rule and declined to allow the disability pension there to offset the jury's lost earnings award. The mere fact that the benefit at issue here is termed a disability pension does not end the inquiry; Oden requires that there be a direct match between the benefit and the loss of earnings award. Here, there was insufficient evidence in the record to meet defendant's burden of establishing that this particular disability pension was meant to replace plaintiff's lost earnings. Nor does defendant identify any statute or legislative history to show that the pension received by plaintiff was intended to be a substitute for lost earnings as opposed to an early retirement benefit conferred upon police officers accidentally injured in the line of duty. Although certain sections of the Administrative Code of the City of New York relate to disability pensions for New York City police officers (see e.g. §§ 13-252 and 13-254), neither the briefs in the trial court nor the briefs submitted to this Court identify these statutes as governing plaintiff's disability pension. We cannot assume that these provisions are applicable, and, in the absence of any citation to them by defendant, we decline to speculate.

Although this Court must take judicial notice of statutes, defendant has not explained which of the myriad pension provisions applies to this plaintiff. The judicial notice question here is particularly complex in light of the fact that plaintiff was previously employed as a transit police officer by the New York City Transit Authority. Thus, it is not clear which pension provisions of the Administrative Code or other statutes might apply here.

We reached the same conclusion and found that the defendant had failed to meet its burden of showing that the disability pension replaced the jury's lost earnings award in Gonzalez v Iocovello (249 AD2d 143 [1998], affd on other grounds 93 NY2d 539 [1999]). To the extent this Court's decision in Iazzetti v City of New York (216 AD2d 214 [1995], appeal after remand 256 AD2d 140 [1998], revd on other grounds 94 NY2d 183 [1999]) purports to stand for the broad proposition that disability retirement benefits always constitute an offset of a lost earnings award, it is inconsistent with Oden, which is the controlling precedent.

We do not hold that Oden sets forth a general rule that disability pensions can never be a substitute for lost earnings. We merely conclude that, in this case, defendant did not meet its heavy burden to show its entitlement to an offset. Oden instructed that "[t]he problem of matching up a collateral source to an item of loss is simply a matter of proof and factual analysis" (87 NY2d at 89). Here, defendant's proof falls far short of the clear and convincing evidence necessary to support a collateral source offset in this case (see id. at 88-89; Gonzalez, 249 AD2d at 144).

Accordingly, the judgment, Supreme Court, Bronx County (Howard H. Sherman, J.), entered March 25, 2009, upon a jury verdict, awarding plaintiff the principal sums of $700,000 for past and future pain and suffering, $500,000 for past loss of earnings and $1,200,000 for future loss of earnings, and bringing up for review orders, same court and Justice, entered September 10, 2007 and on or about July 16, 2008, which, inter alia, denied defendant's posttrial motion to dismiss for failure to make out a prima facie case and, after a hearing, denied defendant's application for a collateral source offset pursuant to CPLR 4545(a), should be reversed, on the law, without costs, the judgment vacated and the matter remanded for a new trial limited to the issue of plaintiff's comparative negligence.