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New York’s “Grave Injury” Exception Allows Third-Party Claims for Indemnification and Contribution Against the Employer

The New York Workers’ Compensation Law prevents an employee from directly suing their employer in civil court for injuries arising out of and in the course of employment. Instead, the employer’s liability to the employee is limited to the benefits allowed under the Workers’ Compensation Law.

Of course, an injured worker can always sue the “actual tortfeasor” (the person who injured them) in civil court – as long as that person is not their employer. This article discusses what happens when the defendant sued by the employee files a civil claim against the injured workers’ employer by alleging the employer contributed to the injury or should indemnify the defendant. That “third-party” claim is a civil claim made by a defendant within an existing legal proceeding which seeks to enjoin a person not party to the original action, to enforce a related duty.

Even though the employee can not sue their employer directly in civil court, New York provides an exception to this immunity if employee has sustained a “grave injury.” If the employee sustains a “grave injury” an employer may be liable for contribution when they are third-partied in. In those situations, the employer may defend a workers’ compensation claim and then be brought into a civil suit as a third-party defendant.

This article discusses how that happens and how these third-party claims are defended.

What is a grave injury?

New York’s Workers’ Compensation Law, § 10, defines “grave injury” as follows:

death, permanent and total loss of use or amputation of an arm, leg, hand or foot, loss of multiple fingers, loss of multiple toes, paraplegia or quadriplegia, total and permanent blindness, total and permanent deafness, loss of nose, loss of ear, permanent and severe facial disfigurement, loss of an index finger or an acquired injury to the brain caused by an external physical force resulting in permanent total disability.

Who can make a third-party claim.

Third party claims (impleader) are limited to causes of action for contribution and/or indemnification only. As per CPLR § 1007, third-party practice is only allowed when the claim of the defendant is against “a person not a party [to the original action] who is or may be liable to that defendant for all or part of the plaintiff’s claim against that defendant.” The employer is usually third-partied in by the actual tortfeasor when the injured employee files a civil lawsuit against the party that actually harmed her.

Statute of Limitations for a third-party claim.

The Statute of Limitations for an action for contribution or indemnification is six years from the date of accrual. The clock starts running not on the date of loss for which the party seeking indemnification may be held liable, but from the time payment is made on the underlying claim.

Making the third-party claim.

A third-party claim is begun by filing a Third-Party Summons and Complaint with the Court. CPLR §1007. Although the third-party plaintiff pays an index number fee ($210) the entire actions retains the same index number as the underlying/pre-existing case. The party filing the third-party complaint must serve copies of all the prior pleadings filed in the case within 120 days of the filing. Best practice is to attach the prior pleadings to the third-party complaint.

In addition to serving copies of all prior pleadings on the third-party defendant, the third-party plaintiff must also simultaneously serve the Summons and Complaint on plaintiff’s counsel and all other parties who have appeared in the action. CPLR §§ 1007, 2103(e).

Answer and Defenses.

Depending on how and where the Summons and Complaint is served, the third-party defendant has either 20 or 30 days to answer. CPLR §§320(a), 3012(a) and (c), Bus. Corp Law §306(b)1. Generally speaking, domestic or “authorized foreign” corporations have 30 days to file answering pleadings once service has been effected.

Answers to Complaints and Third-party complaints are not filed with the Court, they are simply served upon plaintiff’s counsel. CPLR § 3012(a) Answers must be served within 20 days, with exceptions to this general rule. (For a complete listing of all time limits for answering civil claims, see my article here).

Defending Third Party Claims.

The same attorney defending the workers’ compensation matter can defend the associated third-party claim, as long as the following conditions are are met to ensure there is no conflict of interest:

  • The carrier is defending both matters (Part A coverage and Part B) without challenging entitlement to coverage;
  • There are no adverse interests.

As the cases will involve the same proofs, and the carrier is asserting the right to reimbursement from the proceeds of any third-party suit (as per Workers’ Compensation Law §29) having one attorney handle both matters could result in a better outcome and cost savings.

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