| Reiss v Roadhouse Rest. |
| 2010 NY Slip Op 01632 [70 AD3d 1021] |
| February 23, 2010 |
| Appellate Division, Second Department |
| Deanna Reiss, Appellant, v Roadhouse Restaurant et al.,Defendants, and Healthcare Recoveries, Inc., et al.,Intervenors-Respondents. |
—[*1] Korybski & Levinson, LLP, New York, N.Y. (Scott S. Levinson and Janet D. Cebula ofcounsel), for intervenors-respondents.
In an action to recover damages for personal injuries, the plaintiff appeals (1) from an orderof the Supreme Court, Richmond County (Minardo, J.), dated January 31, 2007, which (a) heldin abeyance her motion, in effect, for summary judgment declaring that Group HealthIncorporated and Healthcare Recoveries, Inc., have no valid claim to the proceeds of thesettlement of the action and directing that the law firm of Gross Schwartz Goldston & Campisi,LLP, pay her settlement proceeds in the principal sum of $134,085.29, plus interest, that it heldin an interest-bearing escrow account (b), sua sponte, granted Group Health Incorporated andHealthcare Recoveries, Inc., leave to intervene in the action, and (c) directed a hearing todetermine if the settlement proceeds included any sum for past medical expenses that must bereimbursed to Group Health Incorporated for medical benefits which it paid on her behalf, (2)from an order of the same court dated November 16, 2007, which (a), in effect, held in abeyanceher motion to reject the first report of a judicial hearing officer (Pizzuto, J.H.O.), dated October1, 2007, made after a hearing, finding that Group Health Incorporated was entitled to bereimbursed from the settlement proceeds for medical expenses it paid on her behalf, and (b), suasponte, directed a hearing to determine the amount that Group Health Incorporated incurred inmedical expenses related to the injuries sustained by her as a result of the subject accident, and(3), as limited by her brief, from so much of an order of the same court dated December 19,2008, as (a) denied her motion, in effect, to reject the first report of the judicial hearing officerdated October 1, 2007, and so much of the second report of the same judicial hearing officer,dated September 29, 2008, made after a separate hearing, as found that Group HealthIncorporated was entitled to recover the principal sum of $134,085.30 from the settlementproceeds (b), in effect, denied her motion, in effect, for summary judgment declaring that GroupHealth Incorporated and Healthcare Recoveries, Inc., have no valid claim to the settlementproceeds and directing that the law firm of Gross Schwartz Goldston & Campisi, LLP, pay herthe principal sum of $134,085.29, plus interest, from the settlement proceeds, and (c) directedthe entry of a judgment in favor of Group Health Incorporated and against her in that amount.
Ordered that the appeal from the order dated January 31, 2007, is dismissed, as [*2]no appeal lies as of right from an order which does not determine amotion made on notice or from an order directing a hearing to aid in the determination of amotion, and we decline to grant leave to appeal (see CPLR 5701 [a] [2]; Ciprijan vStone, 65 AD3d 659 [2009]; Zoref v Glassman, 44 AD3d 1036 [2007]); and it isfurther,
Ordered that the appeal from the order dated November 16, 2007, is dismissed, as no appeallies as of right from an order directing a hearing to aid in the determination of a motion, and wedecline to grant leave to appeal (see CPLR 5701 [a] [2]; Zoref v Glassman, 44AD3d 1036 [2007]); and it is further,
Ordered that the order dated December 19, 2008, is reversed insofar as appealed from, on thelaw, the plaintiff's motions are granted, and the matter is remitted to the Supreme Court,Richmond County, for entry of an appropriate declaratory judgment; and it is further,
Ordered that one bill of costs is awarded to the plaintiff.
On February 1, 2006, the plaintiff and the defendants Roadhouse Restaurant, MarkD'Andrea, and Jodi D'Andrea settled this personal injury action for the principal sum of$650,000, and the settlement proceeds were deposited into an interest-bearing escrow accountmaintained by the plaintiff's personal injury attorney, Gross Schwartz Goldston & Campisi, LLP(hereinafter GSGC). Healthcare Recoveries, Inc. (hereinafter Healthcare Recoveries), an agentretained by Group Health Incorporated (hereinafter GHI) to collect the medical benefits paid byGHI on behalf of the plaintiff, learned about the settlement on March 1, 2006, and requested thatthe plaintiff reimburse GHI for the medical benefits it provided to her.
After GSGC refused to release the plaintiff's portion of the settlement proceeds to her, theplaintiff retained new counsel and moved, in effect, for summary judgment declaring that GHIand Healthcare Recoveries had no valid claim to the settlement proceeds, and directing thatGSGC pay her the principal sum of $134,085.29, plus interest, that it still held in the escrowaccount. In support of her motion, the plaintiff submitted her own affidavit and affirmations fromthe individual attorneys who negotiated the settlement, all asserting that no part of the settlementproceeds was allocated to the recovery of past medical benefits and, thus, that GHI was notentitled to reimbursement for medical benefits it paid on her behalf. In response, GHI andHealthcare Recoveries relied on the affidavit of David Place, an attorney representing HealthcareRecoveries, in which he averred that recovery for past medical expenses had been sought by theplaintiff as an element of damages and, thus, constituted a portion of the underlying settlement inthis action. The Supreme Court held the plaintiff's motion in abeyance, granted GHI andHealthcare Recoveries (hereinafter together the intervenors) leave to intervene in the action, anddirected a hearing to determine if the settlement proceeds included any sum for past medicalexpenses that must be reimbursed to GHI by virtue of its payments on behalf of the plaintiff.After a hearing, at which the plaintiff was the only witness, a judicial hearing officer (hereinafterthe JHO) issued a report concluding that the settlement included a recovery for past medicalexpenses, and that GHI was entitled to reimbursement from the settlement proceeds of themedical benefits it had paid on the plaintiff's behalf. The Supreme Court, in effect, held inabeyance the plaintiff's motion to reject this first report and directed that another hearing bescheduled to determine the amount that GHI paid in medical benefits related to the injuries theplaintiff sustained as a result of the subject accident.
At the second hearing, Place was the intervenors' sole witness. Through Place's testimony, aconsolidated statement of benefits was admitted into evidence, which, according to him, listedthe medical benefits allegedly paid by GHI on the plaintiff's behalf that were related to theaccident. After the second hearing, the JHO issued a second report, concluding that GHI wasentitled to recover the sum of $134,085.30 from the plaintiff's portion of the settlement proceeds.
In an order dated December 19, 2008, the Supreme Court thereafter denied the plaintiff'smotion, in effect, to reject the JHO's first report and to reject so much of the second report asfound that GHI was entitled to recover the principal sum of $134,085.30. The Supreme Courtalso, in effect, denied the plaintiff's initial motion, in effect, for summary judgment declaring that[*3]the intervenors had no valid claim to the settlement proceedsand directing GSGC to pay her the principal sum of $134,085.29, plus interest, that it still held inthe escrow account. We reverse the order dated December 19, 2008, insofar as appealed from.
In a case decided after a hearing, this Court's power to review the evidence is as broad as thatof the trial court and this Court may render the determination warranted by the facts, bearing inmind that, in a close case, the factfinder had the advantage of seeing and hearing the witnesses(see Northern Westchester Professional Park Assoc. v Town of Bedford, 60 NY2d 492,499 [1983]; Hochhauser v Electric Ins. Co., 46 AD3d 174, 184 [2007]; Tornheim vKohn, 31 AD3d 748, 748 [2006]; Riverside Capital Advisors, Inc. v First SecuredCapital Corp., 28 AD3d 452, 454 [2006]). Here, the Supreme Court improperly denied, aftertwo hearings, the plaintiff's motions to reject the JHO's first report and so much of the JHO'ssecond report as found that GHI was entitled to recover the principal sum of $134,085.30 fromthe plaintiff's portion of the settlement proceeds, since a contrary conclusion was warranted bythe evidence (see Hochhauser v Electric Ins. Co., 46 AD3d at 184).
At the hearings before the JHO, the intervenors failed to prove that GHI was entitled toreimbursement under its insurance contract with the plaintiff. More particularly, the intervenorsfailed to prove that any part of the settlement proceeds in this action included a recovery for pastmedical expenses and, thus, could not demonstrate that GHI was entitled to the reimbursement ofmedical benefits it paid on the plaintiff's behalf. The intervenors' sole witness, the attorneyrepresenting Healthcare Recoveries, which itself was only an agent retained by GHI to pursuethe reimbursement claim, was not qualified to testify regarding the terms of the health insuranceagreement between GHI and the plaintiff (see Franklyn Folding Box Co. v GrinnellMfg., 234 AD2d 505, 506 [1996]), and his testimony that the plaintiff's past medicalexpenses were considered by the parties in reaching their settlement was mere speculation basedupon inadmissible hearsay (see generally Matter of Hausknecht v Comprehensive Med. Careof N.Y., P.C., 24 AD3d 778, 779 [2005]). The intervenors also improperly sought to provethe amount of GHI's claim by seeking to admit into evidence, as a business record, theconsolidated statement of benefits prepared by Healthcare Recoveries from information itobtained from GHI. Since the intervenors' sole witness also was not qualified to give testimonyregarding GHI's record-keeping practices, that document should not have been admitted intoevidence (see Lodato v Greyhawk N. Am., LLC, 39 AD3d 494, 495 [2007]).
In addition, the Supreme Court erred in denying, in effect, the plaintiff's motion, in effect, forsummary judgment declaring that the intervenors have no valid claim to the settlement proceedsof the action and directing that GSGC pay her the principal sum of $134,085.29, plus interest,that it held in the escrow account. The plaintiff made a prima facie showing of her entitlement tojudgment as a matter of law in this regard by adducing evidence in admissible formdemonstrating that no part of the settlement proceeds at issue was allocated to past medicalexpenses that were to be reimbursed to GHI (see Teichman v Community Hosp. of W.Suffolk, 87 NY2d 514 [1996]). In opposition to this showing, the intervenors failed to raise atriable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557[1980]).
Since this action involved a request for declaratory relief, the matter must be remitted to theSupreme Court, Richmond County, for the entry of a judgment, inter alia, declaring that theintervenors have no valid claim to the settlement proceeds (see Lanza v Wagner, 11NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US901 [1962]). Rivera, J.P., Leventhal, Lott and Austin, JJ., concur. [Prior Case History: 14Misc 3d 1226(A), 2007 NY Slip Op 50178(U).]