Collateral Estoppel in Construction Claims

Using Findings in the Workers’ Compensation Claim to Create Jeopardy in the Civil Claim.

In New York, a construction site injury generally leads to two claims being filed: a workers’ compensation claim, and a general liability (civil) lawsuit pursuant to New York’s Labor Laws. The workers’ compensation claim moves at a much faster pace than the civil lawsuit, with compensability potentially being determined in as little as sixty days.  

Findings reached by a workers’ compensation Law Judge may have a binding effect in the civil litigation where the issue decided in the workers’ compensation proceeding is identical to that presented in the civil lawsuit. This is called “collateral estoppel.”    

Impact of Collateral Estoppel

In New York, the Civil Practice Law and Rules (“CPLR”) specifically recognizes collateral estoppel as a basis for dismissal. See CPLR 3211(a)(5). Collateral estoppel is also an affirmative defense under the CPLR. See CPLR 3018(b). 

Collateral estoppel can apply to quasi-judicial determinations of administrative agencies, including the Workers’ Compensation Board, if the material issues are identical, they were necessarily tried before the administrative agency, and there was a full and fair opportunity to contest the issues before the administrative agency. Jeffreys v. Griffin, 1 N.Y.3d 34 (2003).  There must be “identity of issue” between the prior administrative proceeding and the subsequent litigation. This accords with the general rule that the determinations of administrative agencies are entitled to collateral estoppel effect.  ABN AMRO Bank, N.V. v MBIA Inc., 928 N.Y.S. 2d 647 (2011).   

Issues such as the disallowance of a workers’ compensation claim, the disallowance of some body parts, or a decision regarding ongoing disability can be used to estop a finding in the civil lawsuit.  

Case Law Examples of Collateral Estoppel

For example, in Irrizarry v. Minnesota Mining & Manufacturing Corp., 91 A.D.2d 558 (1st Dept. 1982), the Court found that an award of compensation by the Workers’ Compensation Board constitutes a legal finding that the employee’s injuries arose out of and in the course of his employment and this finding is binding and conclusive.  Similarly, if the employee is denied benefits because the accident did not arise out of and in the course of employment, this finding is also binding.  

Similarly, in Auqui v. Seven Thirty One Ltd. P’ship, 980 N.Y.S.2d 345 (2013), the Court found that when a Workers’ Compensation Board decision sets forth the date a worker’s disability ended, a trial court in a third-party lawsuit should not allow for any award for lost earnings and medical expenses after that disability end date.  

Applying this to Catastrophic Construction Accident Claims

When an employee is claiming in his civil lawsuit that he was injured while in the course of employment, but the workers’ compensation claim was disallowed as not being work-related, the defendant in the civil suit can use this finding to seek a disallowance of the civil lawsuit.  After all, if the employee is claiming that he was working and the defendants provided an unsafe place to work, but it was ultimately found that he did not sustain a work-accident, there is no question that there is an identity of issue here.  Further, the employee cannot reasonably contest that he was not provided a fair opportunity to litigate the issue, as he was given such opportunity when litigating the claim for workers’ compensation benefits.   

Questions about this topic?

Contact Tashia Rasul, Construction Practice Team Leader at LOIS, for questions about this article.


Why LOIS Has a Dedicated Construction Defense Practice

Lois has a dedicated Construction Defense Practice because New York construction injuries often lead to two claims: one pending in workers’ compensation court and a civil case based on New York’s Labor Law. These cases are multi-jurisdictional as the two courts reviewing the same set of facts have very different jurisdictional limitations and powers. The injured worker is typically represented by seasoned counsel (from one of just a few firms who have turned construction claims into a specialty) and is aided by a statutory scheme in New York which creates a cottage industry of strict liability claims for employers. The embattled construction employer is therefore required to defend two claims at once filed by the same employee.

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About Tashia Rasul, Esq., Construction Defense Practice Team Leader

At LOIS, Tashia leads the New York Construction Practice, which exclusively handles workers’ compensation claims arising out of construction accidents. Tashia represents employers, self-ensured companies, insurance carriers and third party administrators before the workers’ compensation courts in New York. Her expertise lies in complex coverage issues, wrap-ups, and claims arising out of catastrophic injuries. As part of her practice, Tashia frequently visits accident sites and provides on-site training to employers regarding workers’ compensation claims, as well as to develop defense strategies. Tashia is the author of the “Defending Construction Claims” Handbook (more on the handbook below).

Tashia regularly counsels clients on the importance of coordinating defense of workers’ compensation and general liability claims, and has a track record of favorable outcomes as a result of such coordination. In concert with Lois Law Firm’s recommended protocol for coordinating workers’ compensation and general liability defense, Tashia led a discussion of the protocol at the 2019 Annual Claims and Litigation Management (CLM) Conference to educate her peers on the importance of joint defense.

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Cover of 2020 Construction Defense Handbook, by Tashia Rasul, Esq.

Authored by Tashia Rasul, Esq., this book is intended for employers, risk managers, insurance brokers and adjusters who are involved in the defense of construction accident claims in New York, and who are looking for a plain-English guide to defending construction accident claims.

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Tashia Rasul is an Partner at Lois LLC where she defends employers and carriers in New York workers’ compensation claims and leads the Construction Defense Practice team. Tashia chairs the Firm's Diversity Committee and is active in the national Alliance of Women in Workers' Compensation. She can be reached directly at trasul@loisllc.com or 201-880-7213.