This decision has been referenced in a table in the New York Supplement.
Steven R. Smith, Esq., Garden City, Attorney for Plaintiff.
Tonetti & Ambrosino, Esqs. Smithtown, Attorneys for Defendant Bruhns.
Breen & Clancy, Esqs., Hauppauge, Attorneys for Defendant All Island.
Certilman, Balin, Adler & Hyman, East Meadow, Attorneys for Defendant Fairview.
Vincent D. McNamara, Esq., East Norwich, Attorney for Defendant Board of Managers.
Fox Rothschild, LLP, New York, Attorneys for HIP Health Plan.
JOSEPH C. PASTORESSA, J.
HIP Health Plan of New York (hereinafter "HIP") moves for leave to intervene in this personal injury action pursuant to CPLR 1012 or CPLR 1013. The application raises an oft litigated issue of law which has received considerable attention at the Appellate Division level of the State with a three to one split between the Departments, and with the Court of Appeals taking note of, but not deciding the issue. Specifically, HIP seeks to intervene as a plaintiff in their insured's personal injury action in order to personally oversee and handle that aspect of the plaintiff's claim related to medical expenses compensated plaintiff by HIP as plaintiff's health insurer, and for which HIP argues that it was entitled to repayment pursuant to a subrogation clause in the insurance contract.
HIP seeks to intervene to protect any interest it may have in any recovery made by the plaintiff, and to enforce any rights it may have against the defendants. HIP claims that there will be no prejudice to the parties or delay to the proceedings as HIP will rely upon all discovery previously exchanged, and will abide by any court ruling limiting the extent of its participation. As such, HIP maintains that it is entitled to intervene either as of right under CPLR 1012 or within the court's discretion under CPLR 1013. It appears fairly clear that in this case the movant's application should be considered principally under CPLR 1012 which grants intervention as of right when representation by the existing parties "is or may be inadequate", and the proposed intervenor "is or may be bound by the judgment", and secondarily under the catch all discretionary authority vested in the court under Section 1013. The inadequacy of representation for the proposed intervenor is manifest as, it is, of course, no surprise that plaintiff's in prosecuting their claims will devote their attention more decidedly to those items of recovery for which they have not already received compensation from their health insurers. Thus, focusing on items such as pain and suffering rather than medical expenses which were covered by their insurer. This reality notwithstanding, the Appellate Divisions from all four departments have weighed in on this issue with three of the four, including critically for this application, the Second Department, deciding against a health insurer's request to intervene in these circumstances (see, Humbach v. Goldstein, 229 A.D.2d 64 [2d Dept.];
Independent Health Ass'n v. Grabenstatter, 254 A.D.2d 722[1st Dept.]; Berry v. Lazaro, 250 A.D.2d 63[3rd Dept.]; Fasso v. Doerr, 46 A.D.3d 1358 [4th Dept.] ). The question whether to permit intervention of a health insurer implicates resolution of a conflict between the collateral source rule of CPLR 4545 which permits the reduction of plaintiff's recovery for any items shown by the defendant to have already been received by the plaintiff from outside sources including plaintiff's health insurer, and the health insurer's own contract subrogation clauses and clauses making the insurance payments of the health insurer a lien on any recovery the insured receives from the tortfeasor. In essence, the question boils down to a battle between health insurers on the one side and liability insurers on the other with a determination necessary as to which of the two should receive repayment for their outlays to their respective insureds. It is a pure policy question, best left for the legislature who can entertain and hear the arguments raised by the respective vested interests as well as from constituents or any other individuals or organizations for whom the determination would have consequences, and then, through appropriate legislation, set policy accordingly. It appears that the legislature has already begun to tangentially address this area of concern in its recent amendments in Part F of Chapter 494 of the laws of 2009 wherein the Court of Appeals decision in Teichman v. Community Hosp. ( 87 N.Y.2d 514) which afforded health insurers the right to intervene in an infant's compromise to investigate whether any component of a personal injury settlement contained medical expenses covered by the health insurer was specifically overruled. The amendment superseding Teichman set forth that in any settlement it is "conclusively presumed" that the settlement did not include such items (see, General Obligations Law § 5–335). Thus, at least in a settlement context, it appears that the legislature has decided in favor of the liability insurers and extinguished any equitable subrogation rights of the health insurers. Whether the same will hold true for verdict awards remains, at the moment, at least from a Statewide perspective, an open question depending on which Appellate Division Department the case is situated. This court, however, sitting nisi prius, is bound by the controlling precedent in the Second Department which dictates that the application be denied.
While the proposed intervenor argues that it will be able to commence a direct action against the defendants herein and then move to consolidate the two actions under CPLR 602, this attempt to circumvent the holding of the Second Department is not presently before the court, and, therefore, its viability is not ripe for determination, and remains to be seen. The court notes parenthetically that at least ostensibly there is some question whether such an action by a health insurer is premature and might not lie(see, Siegel, N.Y. Practice § 180, at 310 [4th ed] ).
Accordingly, for the reasons set forth heretofore, the movant's request to become an intervening ...