Motion to Offset in New York

Background

“The so-called collateral source rule [once] permitted a double recovery for a plaintiff. Over time, the impact and cost associated with double recoveries led to the enactment in New York of CPLR § 4545 and its predecessor statute.” (Condon v. Hathaway (2002) 191 Misc. 2d 235, 237.) “The erosion of the collateral source rule in New York began in 1975 with the enactment of CPLR § 4010. [However] it was not until 1986 that New York included in an amendment to CPLR § 4545 its subdivision (c) which extended the offset or reduction concept to any personal injury action.” (Id.)

CPLR § 4545(c) now requires the Court, upon a finding that items of economic loss that were or will with reasonable certainty be replaced or indemnified from any collateral source to then reduce the amount of any award for such. (Id.) This is now know as “offset” or “setoff”. (Id.)

How to Structure the Motion

It is well settled that Social Security Disability (“SSD”) benefits constitute a wage replacement and thus a collateral source under CPLR 4545. (See Bryant v. NYCH & HC (1999) 93 N.Y.2d 592 (1999); Manfredi v. Preston (1998) 246 A.D.2d 580; Firmes v. Chase Manhattan Auto Fin. Corp.(2008) 50 A.D.3d 18, 36-37; Hayes v. Normandie LLC, 306 A.D.2d 133 (1st Dep’t 2003). To prove entitlement to a collateral source offset, a party must show by “clear and convincing evidence” that the plaintiff received and/or will continue to receive [social security] payments. (See Terranova v NY City Tr. Auth. (2007) 49 A.D. 3d 10, 19.)

”CPLR 4545(a), which governs medical malpractice actions, and CPLR 4545(c), which governs all personal injury actions commenced after June 28, 1986 (see, L 1986, ch 220, § 46) and CPLR 4545 (a), which originally tracked the language of subdivision (b), .... permit damages awards to be offset by collateral-source reimbursements for ‘past or future cost[s] or expense[s]’” (see, L 1985, ch 294, § 8).

“A party seeking a CPLR 4545(c) offset must match up the claimed collateral source directly to an item of loss particularized in the itemization of the elements included in the damage award as set forth in the written verdict sheet returned by the jury. (Oden v. Chemung County Indus. Dev. Agency (1995) 87 N.Y.2d 81, 89.) ... Where the ‘burden is not sustained because the connection between the item of loss and the collateral source payment is tenuous or because the necessary correspondence between their essential elements is lacking, the purposes of the statute would not be served by applying the mandatory offset.’” (Id.)

CPLR 4545(b)(1), which governs actions for work-related injuries commenced against public employers before June 28, 1986, authorizes reduction of damages awards only to the extent that “the court finds that [a] cost or expense [included in the award] was replaced or indemnified from [a] collateral source” paid for or sponsored by the employer. (Ryan v. City of New York (1991) 79 N.Y.2d 792, 793.) “The use of the past tense in this provision clearly indicates a legislative intention to permit offsets only for collateral-source reimbursements for preverdict losses.” (Id.)

The Court’s Decision

“CPLR 4545(c) is a statute enacted in derogation of the common law and, as such, is to be strictly construed (see, McKinney's Cons Laws of NY, Book 1, Statutes § 301 [a]; see also, Matter of Bayswater Health Related Facility v Karagheuzoff, 37 N.Y.2d 408, 414). Further, it is to be construed in the narrowest sense that its words and underlying purposes permit, since the ‘rules of the common law must be held no further abrogated than the clear import of the language used in the statute absolutely requires.’” (Oden, 87 N.Y.2d at 86.)

“An offset is permitted ‘only when the collateral source payment represents reimbursement for a particular category of loss that corresponds to a category of loss for which damages were awarded’ (Johnson v. N.Y. City Transit Auth. (2011) 88 A.D.3d 321, 327 citing Oden at 84.) In other words, there must be a match between the item of economic loss awarded by the jury and the collateral source payment. Because CPLR 4545(a) is in derogation of the common law, its provisions must be strictly construed.... (Id. citng Oden at 86.) [A]nd the defendant has the burden of establishing entitlement to a collateral source offset by clear and convincing evidence. (Kihl v. Pfeffer (2007) 47 A.D.3d 154, 163–64; Young v. Knickerbocker Arena (2001) 281 A.D.2d 761, 764.)