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April 8, 2013

Collateral Estoppel Precludes Plaintiff From Relitigating Duration Of Disability

The New York Court of Appeals recently held that the doctrine of collateral estoppel may be applied to findings of fact made by the Workers' Compensation Board ("WCB") regarding the duration of a disability. Accordingly, such a determination by the WCB may preclude a plaintiff from relitigating the duration of a work-related injury in a related personal injury action.

In Auqui v. Seven Thirty One Limited Partnership, et al., 2013 N.Y. LEXIS 127 (2013), the New York Court of Appeals reversed the order of the Appellate Division, First Department, which denied Defendants' motion to preclude Plaintiffs from litigating the issue of Plaintiff Jose Verdugo's disability beyond a certain date.

On December 24, 2003, Verdugo, a food service deliveryman, was injured when a sheet of plywood fell from a building owned by Defendant Seven Thirty One Limited Partnership. Verdugo filed a Workers' Compensation claim for injuries to his head, neck and back, post-traumatic stress disorder and depression. While receiving Workers' Compensation benefits, Verdugo commenced a personal injury action. In December 2005, the Workers' Compensation carrier filed a motion with the WCB to discontinue benefits on the basis that he was no longer disabled. The motion was granted by the WCB Administrative Law Judge, who found that Verdugo no longer suffered from a disability and terminated his benefits as of January 24, 2006. Verdugo appealed the determination, but a full panel affirmed the finding.

Defendants moved to preclude Verdugo from relitigating the duration of his work-related injury in the personal injury action on the grounds that the issue was already fully litigated and decided in the earlier administrative proceeding. The trial court denied the motion and Defendants appealed. The First Department affirmed the decision of the trial court which denied Defendants' motion.

In deciding the appeal, the Court noted that collateral estoppel applies to issues decided in a previous action which the party opposing preclusion had a full and fair opportunity to contest. See Brugman v. City of New York, 102 A.D.2d 413 (1st Dep't 1984). Moreover, although legal conclusions and conclusions of mixed law and fact will not give rise to collateral estoppel, findings of fact that are necessary for an administrative agency to reach a decision are entitled to a preclusive effect. The Court held that the issue of continuing benefits turned on whether Verdugo had a work-related disability beyond a certain date, which was a question of fact and not a legal conclusion, thereby giving it a preclusive effect. The Court also found that Plaintiffs had full and fair opportunity to litigate the issues before the WCB.

The Court's decision in Auqui illustrates the importance of obtaining a party's Workers' Compensation file and staying informed of any underlying administrative proceedings. The case also demonstrates the influential effect an administrative decision may have on the outcome of a related action. Furthermore, it is possible that the Court's holding that factual determinations are precluded from being relitigated may have far reaching consequences and extend to various administrative agencies, such as the Public Service Commission or Department of Labor.

If you require further information regarding the information presented in this Legal Alert and its impact on your organization, please contact Matthew J. Larkin, Chair of the Torts & Products Liability Defense Practice Area at (315) 425-2805 or


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