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February 19, 2014

Court of Appeals Unanimously Reverses Its Own Prior Ruling; No Collateral Estoppel Effect of Workers' Compensation Board Rulings

Recently, in a rare event, New York's highest court decided to hear re-argument in the case Auqui v. Seven Thirty One Limited Partnership, et al. Surprisingly, it unanimously reversed itself, a ruling which was only 10 months old. Auqui examined the issue of whether a determination of the Workers' Compensation Board ("WCB"), concluding that plaintiff had no further causally-related disability and no further need for treatment, was entitled to collateral estoppels effect in plaintiff's negligence action. In reversing its prior decision, the Court of Appeals found that there was no identity of issues between the WCB finding and a jury's finding, and thus, collateral estoppel should not apply.

The plaintiff in Auqui, Jose Verdugo, was injured during the course of his employment as a food delivery person when a piece of falling plywood, from a building under construction, stuck him in the head. He sought and received workers' compensation benefits for injuries to his head, neck and back, as well as for post-traumatic stress disorder and depression. Thereafter, plaintiff filed a negligence lawsuit. The insurance carrier for the plaintiff's employer moved to discontinue his workers' compensation benefit. After a hearing, the administrative law judge (ALJ) found that plaintiff had no further causally-related disability after January 24, 2006. The Workers' Compensation Board affirmed the ALJ's finding.

Subsequently, in plaintiff's negligence action, defendants moved for an order estopping plaintiff from re-litigating the issue of causally-related disability beyond January 24, 2006. The Supreme Court granted defendants' motion, finding that the plaintiff had a full and fair opportunity to address the issue before the Workers' Compensation Board. The Appellate Division reversed, finding that the determination of the Workers' Compensation Board was one of ultimate fact, and thus, did not preclude plaintiff from litigating his ongoing disability.

In its initial decision, the Court of Appeals found that the Plaintiff had a full and fair opportunity to litigate the issue of his continuing injuries in front of the WCB, and therefore, the WCB findings had a preclusive effect in the negligence action on the duration of the plaintiff's work related injuries.

Upon re-argument, the Court of Appeals reversed itself, finding that the plaintiff did not have a full and fair opportunity to litigate his injuries in front of the WCB, focusing its decision on the differences in scope and focus of a WCB proceeding and a civil lawsuit. The Court explained that workers' compensation funds are awarded to provide money on an expedited basis that is to function as a substitute for the injured employee's wages. The act is narrowly focused on the employee's ability to perform the duties of his or her employment and the expedited nature of the proceeding may prevent an employee from fully litigating the matter of their injuries. In comparison, the Court explained that a negligence action is much broader in scope and is intended to make an injured person whole again -- including, lost income and future medical expenses. In other words, the jury is charged with determining the broader question of a plaintiff's total loss, as opposed to the Workers' Compensation Board's narrower focus on the employee's ability to work.

The Court of Appeals was clear to emphasize that its holding was not to impair the general rule that the quasi-judicial determination of administrative agencies are entitled to collateral estoppel effect, where the issue a party seeks to preclude in a subsequent civil action is identical to a material issue that was necessarily decided by the administrative tribunal and where there was a full and fair opportunity to litigate before that tribunal. See, Jeffreys v. Griffin (1 NY3d 34,39 [2003]).

It is anticipated that this decision, beyond adding confusion to this area of the law, will be relied upon by plaintiffs' counsel to stop attempts by defendants to use prior administrative decisions in their favor.

If you require further information regarding the information presented in this Legal Alert and its impact on your organization, please contact Thomas B. Cronmiller, Chair of the Torts & Products Liability Defense Practice Area at (585) 295-4424 or


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