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Employers must pay lump-sum workers comp benefits in some cases: N.Y. court


ALBANY, N.Y.—The New York Court of Appeals has upheld a ruling that requires employers to make lump-sum payments to a state trust fund for certain permanent partial disability benefits.

A 2007 reform of New York's workers compensation law capped the amount of PPD benefits for claimants after March 2007 and required private insurers to deposit lump-sum PPD benefits into the state Aggregate Trust Fund after July 2007.

However, employers argued in Randy Raynor vs. Landmark Chrysler et al. that the lump-sum provision should not apply to employees who were injured prior to March 2007 but received benefits after July 2007 because it would be “speculative” to calculate lump-sum, uncapped awards for those claimants.

Landmark Chrysler had sought to make periodic PPD payments to Mr. Raynor, who injured his lower back on the job in 2004 and was awarded benefits in 2008, court records show.

In 2008, a workers comp judge ordered the company's insurer, Erie Insurance Co., to deposit $196,865—the value of Mr. Raynor's uncapped and unpaid PPD benefits at that time—into the trust fund. The state Workers' Compensation Board upheld that decision in 2009.

In its ruling Tuesday, the New York Court of Appeals said the state's Workers' Compensation Board accurately interpreted the law when it required Landmark Chrysler to pay lump-sum benefits.

“Although the carrier argues that the legislation, as enacted, is unfair and places an unanticipated financial burden on private insurance carriers, we are merely interpreting the statute by applying the rules of statutory construction,” the appellate court ruled. “It is not our role to pass on its fairness or wisdom.”

The appellate court also disagreed that the lump-sum provision was applied retroactively, because it involved only PPD cases considered after New York's workers comp reforms were passed. It also said the payments were not unfair, in part because they do not increase the PPD benefit amounts for claimants.

Citing its logic in the case concerning Landmark Chrysler, the court issued similar decisions Tuesday involving United Rentals Aerial Equipment Inc., Gould Pumps ITT, Halsted Communications Ltd., Trico and Duke's Plumbing & Sewer Service Inc.

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