Workers comp insurer can subrogate N.Y. rape victim's civil settlement

A civil settlement received by a New York rape victim can be subrogated by the workers compensation insurer that covered her injuries, a New York appellate court ruled last week.

In the case of Beth V. v. New York State Office of Children and Family Services et al., the plaintiff worked as an aide at a juvenile detention center. The woman was “physically assaulted, raped and kidnapped” on the job, court records show.

Ms. V. received workers comp benefits for her injuries, including permanent partial disability benefits, records show. She then sued her employer and several of her co-workers in federal court for deprivation of her civil rights in the attack.

Ms. V. received a $650,000 settlement in the civil case. New York State Insurance Fund, the workers comp insurer for the family services office, sought a lien for part of Ms. V.'s settlement to recoup future workers comp benefit payments.

A New York workers comp judge found that State Insurance Fund could not claim Ms. V.'s settlement, ruling that the federal lawsuit fell outside state laws for subrogation. However, a panel of the New York State Workers' Compensation Board reversed that decision in December 2010.

In a unanimous decision Thursday, an appellate division of the New York Supreme Court upheld the workers comp board ruling.

In its decision, the appellate court said New York law allows insurers to subrogate civil settlements that are based on the same injuries that caused a workers comp claim.

“Here, the settlement stipulation and the testimony of the attorney who represented claimant in the federal action constitute substantial evidence supporting the Board's conclusion that the injuries for which claimant recovered in the settlement were the same injuries for which workers compensation benefits were awarded,” the opinion reads. “Accordingly, the carrier is entitled to a credit against the settlement recovery.”