Frank C. Kilcoyne, CSSC
Volume 24/May 2008

How New Laws Actually Play Out

It has been over ten years since New York State adopted new regulations governing the disposition of settlement proceeds and, by now, most of the practical elements of how these laws apply have been worked out – but not all. One remaining unknown was recently resolved in a case whose fact pattern fit the test almost perfectly.

New York’s statutes mandate that damages awarded by a jury for future pain and suffering above $250,000 must be paid as periodic payments, but no such future payments shall be owed on non-economic damages after the death of the plaintiff. So what happens if a plaintiff wins such a judgment but then dies suddenly before it has actually been paid? Such was the fate of poor Ethel Flanzraich who died—literally—the day after judgment was entered in her favor. Let’s review the case… 1

At approximately 4:00 PM on August 9, 2001 the then-78-year-old Ethel Flanzraich slipped and fell on the steps in front of 52 Greentree Road in Monticello, New York. The defendant Robin’s Wood, Inc. owned the subject property. On or about January 21, 2003 Ms. Flanzraich commenced an action in Supreme Court in Queens (where she lived), against defendant to recover damages for the injuries she sustained in the fall including fractures to the left leg and arm. She alleged her fall was the result of negligent application of paint to the steps.

On September 20, 2004 Supreme Court Justice Alan LeVine granted Flanzraich's motion to strike the defense's answer based on its failure to produce its employee who painted the steps for a deposition. The matter was referred to Justice Duane Hart to conduct an inquest on damages. Thereafter On March 14, 2005, Justice Hart awarded Flanzraich $472,631, including $150,000 for future pain and suffering, $ 300,000 for past pain and suffering and $ 22,631 for medical expenses. The next day March 15, 2005, Flanzraich died (of causes unrelated to her injury). On March 17, 2005 following the substitution of the plaintiff Joyce Stinton as executrix of Flanzraich's estate, a judgment was entered in the plaintiff’s favor in the principle sum of $ 472,631.

Shortly thereafter, Robin's Wood moved to set aside the $ 150,000 future pain and suffering award arguing that the award "is now 'overcompensation' as [Ms. Flanzraich] is clearly no longer suffering from her alleged injury”. On June 5th 2006 the Supreme Court denied the defendant’s motion, holding that while CPLR 5045 (a) provides that while future pain and suffering damages not payable in a lump sum terminate upon the death of a judgment creditor, damages awarded in a lump sum for future pain and suffering are not “contingent” upon the actual longevity of the judgment creditor. The Defendant appeals.

The defendant argued that the decedent’s death the day after the Supreme Court rendered its verdict warrants reconsideration of the future pain and suffering award in order to prevent a substantial injustice to the defendant or a windfall to the plaintiff. In so arguing the defendant relied upon CPLR 50-B. The defendant asked the court to balance whether this plaintiff should be compensated $ 150,000 for less than one day of pain and suffering against the rationale stated by the Legislature in enacting CPLR 50-B that periodic payments for future pain and suffering should terminate upon the death of the plaintiff.

The Court responded by saying that first, “in entertaining the defendant’s arguments we must interpret the relevant statutes that apply to the future pain and suffering damages award at issue”. As defendant acknowledges CPLR 5041(b) provides, in part, that future damages in excess of $250,000 including those for pain and suffering are to be paid as future periodic payments. Thus, future pain and suffering of $ 250,000 or less is payable to the plaintiff as a lump sum. Further, CPLR 4045(a) provides that the liability for payment of any installments for non-economic loss not yet due at the death of the judgment creditor terminates upon the death of the judgment creditor.

The Court went on to say that though the statutory scheme of article 50-B is technical and complicated; its basic operation is simple. Past damages are paid in a lump sum; future damages awarded by the jury without reduction to present value are bifurcated. The first $ 250,000 is paid as a lump sum and the remainder, after subtraction of attorney fees and other adjustments, is to be paid as future periodic payment installments.

Therefore on September 24, 2007, a unanimous 2nd Department panel rejected the defendant's appeal, upholding Hart's award. In its decision the court said “In so applying the relevant sections of CPLR article 50-B here, we find no statutory provision that warrants setting aside or reducing the $ 150,000 future pain and suffering award.” “Further, we note, the death of the decedent prior to the entry of the judgment does not affect that liability.” With that, the plaintiff prevailed and their award for future pain and suffering was upheld.

The technical issue decided, some might wonder whether Justice Hart’s award of $150,000 for future pain and suffering for an 82-year-old plaintiff was excessive. Given her naturally shorter life expectancy — and her actual death the next day—, was that really a fair number? Ironically, the longer you live, the longer your life expectancy and the actual statistics seem to justify his award. The National Vital Statistics report of November 10, 2004 states that an 82-year-old woman can expect to live another 8.8 years. To be safe, one should never discount the applicability of future damages or their cost simply because of the claimant’s age.

Do you have case where a plaintiff is demanding compensation for future damages? Have any idea as to how long the plaintiff can expect to live or what it will cost to provide for the damages claimed? Do you know how CPLR articles 50-A or 50-B will apply to that case? Call Frank C. Kilcoyne, CSSC at 800-544-5533 and I will provide the answers.

1Source: Westlaw, Stinton v. Robins Wood, Inc. N.Y.A.D. 2 Dept., 2007