Judge Carol Feinman
Self-employed yellow medallion taxi driver Fremont, was injured in a car accident. He filed a claim with insurer American Transit. The issue for determination was the calculation on lost earnings so as to compute the rate of payment. In dispute were expenses Fremont incurred for payment of interest on the mortgage loan for his medallion, and payment for his licenses. The court noted that neither the Insurance Law nor the State Administrative Regulations set forth a formula for computing lost earnings, opining this case appeared to be one of first impression in the Second Department. It stated the Fourth Department affirmed Forrest Younger v. Utica Mut. Ins., finding “in effect, the court adopted the general rule that lost profits mean ‘net profits’ deducting from profits only such business expenses as would necessarily be related to the production of that income.” The court found that the payment of interest for the mortgage on the taxi medallion loan was elective, not essential and should not be deducted from Fremont’s earned income in determining the amount of his benefits. Yet, it ruled payment by Fremont of the licenses was essential to the earning of his employment income, and not a voluntary payment to continue his business, thus must be deducted from the determination.
