Louis F. Eckert and Michael J. Kozoriz
Louis F. Eckert and Michael J. Kozoriz ()

In an unusual reversal of its own decision from just months earlier, the New York Court of Appeals held, on Dec. 10, 2013, that the determination of the Workers’ Compensation Board that a plaintiff had no further causally related disability, was not entitled to collateral estoppel effect in the plaintiff’s personal injury action (see Auqui v. Seven Thirty One Ltd. Partnership, 22 N.Y.3d 246, Slip Op. 08192 [2013]). This is in stark contrast to the court’s decision in the same case, on Feb. 14, 2013, that the determination of the Workers’ Compensation Board that a plaintiff had no further causally related disability, was entitled to collateral estoppel effect in plaintiff’s personal injury action (see Auqui v. Seven Thirty One Ltd. Partnership, 20 N.Y.3d 1035, 962 N.Y.S.2d 579, 985 N.E.2d 889 [2013]).

The court’s rationale, if any, for the complete reversal of its earlier decision is difficult to comprehend, and the subsequent decision gives no insight to the court’s thought process in granting reargument and reversing its earlier decision. Indeed, the court’s December decision does not acknowledge its February decision other than to order it vacated. No doubt that Judge Eugene Pigott’s vigorous dissent in the earlier decision played some role in the reversal of plaintiff’s fortunes, but this begs the question of why was Pigott’s opinion insufficient to sway his fellow judges earlier in the year?

It is noteworthy that prior to the February 2013 decision, the New York State Trial Lawyers Association submitted an amicus curiae brief. However, after the court’s initial decision, which clearly was not favorable to the plaintiffs’ bar in general, the pile on began, with amicus curiae briefs being submitted by not only the trial lawyers association, but also by the New York State AFL-CIO, the New York State Bar Association, the Workers Injury Law & Advocacy Group, The Black Institute, and New York Communities for Change, among others. Also submitting amicus curiae briefs were the Defense Association of New York, Inc., and the Federation of Defense and Corporate Counsel.

Politics aside, and whether one views oneself as a member of the plaintiffs’ bar or the defense bar, the overriding question must be whether the court’s most recent decision was correct, or at least justified. As the state’s highest court, the Court of Appeals “grades its own papers” so to speak, and therefore, we must satisfy ourselves with the determination of whether the court’s decision is justifiable given the facts of the case and the common law principles of collateral estoppel.

Two Decisions

In Auqui, the plaintiff, Jose Verdugo, while working as a food delivery person, was struck in the head by a sheet of plywood that fell from a building under construction in Manhattan. He began receiving Workers’ Compensation benefits for injuries to his head, neck, and back, as well as for post-traumatic stress disorder and depression. He commenced a civil action against the building’s owner, the construction manager, and the superstructure subcontractor, in 2004. Maria Auqui was later appointed Verdugo’s guardian in an uncontested guardianship proceeding, in which the defendants in the civil action were not parties. In December 2005, the Workers’ Compensation carrier moved before an Administrative Law Judge (ALJ) to discontinue benefits. The ALJ found that plaintiff had no causally related disability after Jan. 24, 2006, and upon administrative review, the Workers’ Compensation Board (WCB) Panel affirmed the findings of the ALJ.

In the civil action, relying on the decision of the ALJ, the defendants moved in the New York County Supreme Court, seeking to preclude plaintiff from “relitigating” the issue of his causally related disability after Jan. 24, 2006. The Supreme Court granted the defendants’ motion, holding that plaintiff had a full and fair opportunity to address the issue before the WCB and that plaintiff would be collaterally estopped from contesting his causally related disability after Jan. 24, 2006. The Appellate Division reversed the decision of the Supreme Court, with two justices dissenting.

In its February 2013 decision, the Court of Appeals wrote that “[t]he doctrine of collateral estoppel is applicable to determinations of quasi-judicial administrative agencies such as the WCB” and that “[c]ollateral estoppel applies if the identical issue sought to be precluded was necessarily decided in an earlier action, at which the party opposing preclusion had a full and fair opportunity to contest the issue” (Auqui, 20 N.Y.3d at 1037). The court further noted that “[a]lthough legal conclusions and conclusions of mixed law and fact are not entitled to preclusive effect, findings of fact that are necessary for an administrative agency to reach are entitled to such effect” (Id.).

Finding that plaintiff had a full and fair opportunity to litigate the issue of ongoing disability before the WCB, the court held that “[t]he determination of the WCB should be given preclusive effect as to the duration of plaintiff’s disability, relevant to lost earnings and compensation for medical expenses” (Id.). Chief Judge Jonathan Lippman, and Judges Victoria Graffeo, Susan Phillips Read, and Robert Smith concurred in the memorandum decision, with Judge Jenny Rivera taking no part.

Judge Pigott dissented, noting that the majority’s decision impliedly held that plaintiff may continue to litigate the extent of his lost earnings from the accident date to Jan. 24, 2006, as well as the issues of plaintiff’s pain and suffering and his wife’s loss of consortium claim. Pigott, however, wrote that the issue of plaintiff’s ability to work after Jan. 24, 2006, should not be given preclusive effect because, in his opinion, the issue of plaintiff’s disability “is imbued with the policy considerations of the WCB” and presents a mixed question of fact and law, the former relating to the nature of plaintiff’s injuries and the latter relating to whether these injuries amounted to a disability preventing plaintiff from returning to work (see id., at 1039-40). Lastly, Pigott wrote that the majority failed to consider the different procedures employed by the ALJ and WCB, as opposed to a court of law, which before the ALJ and WCB, resulted in preclusion of one plaintiff’s psychiatrist’s testimony “on technical grounds” and the giving of “short shrift” to the testimony of another based on the ALJ’s perceived inconsistency (see id., at 1040).

Fast forward to December 2013, after the Court of Appeals granted plaintiff reargument following its February 2013 decision. Lippman wrote a unanimous decision, with Graffeo, Read, Smith, Pigott, Rivera, and Judge Sheila Abdus-Salaam concurring, which was in stark contrast to the majority’s decision in February 2013 (see Auqui, supra, 22 N.Y.3d 246). While citing the same basic legal principles about giving collateral estoppel effect to the quasi-judicial determinations of administrative agencies where the issue is identical to that which was necessarily decided by an administrative body and where there was a full and fair opportunity to litigate before that body, the Court of Appeals now also stressed the application of “general notions of fairness” and that collateral estoppel is a “flexible doctrine” (see id.).

No doubt Judge Pigott’s prior dissent had an impact on the court’s subsequent decision, and the now unanimous decision of December 2013 noted the WCB’s narrow use of the term “disability” and that “[b]y contrast, a negligence action is much broader in scope” (id.). This time, the court wrote that “[a]lthough there is some degree of overlap between the issues being determined in the two proceedings, based on the scope and focus of each type of action, it cannot be said that the issues are identical,” and “[g]iven the realities of these distinct proceedings, the finder of fact in a third-party negligence action, in its attempt to ascertain the extent of plaintiff’s total damages, should not be bound by the narrow findings of the Board regarding the duration of plaintiff’s injury or his need for further medical care” (id.).

Conflicting Decisions’ Impact

Regardless of whether one identifies with the plaintiffs’ bar or the defense bar, any objective jurist should be able to appreciate and understand the court’s rationale in either the February 2013 or December 2013 decisions. After all, is it not best to avoid an inconsistent result in a civil action after an administrative agency already carefully considered and rejected a claimant’s asserted inability to work? On the other hand, are there not mixed questions of fact and law in the WCB’s findings regarding a claimant’s injuries and the impact of those injuries on his or her “disability” as that term is used in the Workers’ Compensation Law, precluding a collateral estoppel effect?

The legal basis for the Court of Appeals’ December 2013 decision is not new or unique. As early as 1986, the Court of Appeals declined to apply the doctrine of collateral estoppel to the WCB’s decision that a worker’s injury in an automobile accident, while being driven to work by her superior in an employer-leased vehicle, did not arise out the employee’s employment. The court held that the WCB’s decision was not binding on the defendant driver and leasing company in the civil action, who would be permitted to assert the affirmative defense that the plaintiff’s claims against them were barred as being compensable solely under the Workers’ Compensation Law (see Liss v. Trans Auto Systems, 68 N.Y.2d 15, 505 N.Y.S.2d 831, 496 N.E.2d 851 [1986]). The rationale for the Liss decision was that since the defendants in the civil action were not parties to the Workers’ Compensation proceedings, they cannot be bound by the WCB’s decision that plaintiff’s accident did not arise out of her employment.

While the defense bar could argue that in the Auqui case the plaintiff was a party to the Workers’ Compensation proceedings wherein the WCB found that he did not have a causally related disability after Jan. 24, 2006, the plaintiffs’ bar could counter-argue that his ability to present his case to the WCB was restricted and that the issues before the WCB and the Supreme Court were not sufficiently identical to warrant preclusion.

The legal impact of the December 2013 decision by the Court of Appeals is the reiteration of the “general rule that the determinations of administrative agencies are entitled to collateral estoppel effect,” and that the “well-settled” rule should “continue to be applied where, unlike here, there is identity of issue between the prior administrative proceeding and the subsequent litigation.” However, the rule will not be applied to any decision by the WCB as to a plaintiff’s inability to work for purposes of Workers’ Compensation benefits, as this is a different issue from a plaintiff’s inability to work for purposes of claims asserted in a civil action (Auqui, 22 N.Y.2d 246).

For the defense bar, this decision can, as it must, be swallowed given the common law principles of collateral estoppel and the arguably inherent difference between the proceedings before the WCB and in a court of law. What is more troubling than the merits of the decision, however, is the quick and unexplained reversal by the Court of Appeals of its own decision just months prior, which was not without consequences for at least some litigants in New York between February and December 2013.

For example, in Casas v. Consolidated Edison Co. of New York, 105 A.D.3d 471, 963 N.Y.S.2d 88 (1st Dept. 2013), the Appellate Division, in April 2013, cited the Court of Appeals’ now-vacated February 2013 decision to preclude the plaintiff therein from litigating his accident-related disability after Sept. 5, 2008. In a cruel irony for Luis Casas, on the same date that the Court of Appeals granted the plaintiff’s motion to reargue in Auqui, June 27, 2013, the court denied Casas’ motion for leave to appeal to the Court of Appeals (see 21 N.Y.3d 999 ["Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution"]).

In conclusion, either decision by the Court of Appeals in Auqui is defensible under the principles of collateral estoppel, and while one may disagree with one of the two decisions based on one’s perspective in the symbiotic environment of the plaintiffs’ and defense bar, the two decisions cannot be reconciled, leaving one wondering whether…well…just wondering.

Louis F. Eckert is a senior partner at Litchfield Cavo, and Michael J. Kozoriz is a senior associate at the firm.