Published by MCB Appellate Practice Group
Barbara D. Goldberg, Gregory A. Cascino, and Richard Wolf
On August 21, 2024, the Appellate Division of the Supreme Court, Second Judicial Department, held in Liciaga v. New York City Transit Authority (2024 N.Y. Slip Op. 04257) that a defendant is entitled to a collateral source hearing pursuant to CPLR § 4545 where the defendant tenders “some competent evidence” that the plaintiff’s future medical expenses may be offset by an insurance policy available through the Patient Protection and Affordable Care Act (“ACA”). The Court also affirmed an award of $16 million for pain and suffering damages, seemingly a new high for the Second Department.
In Liciaga, the then-23-year-old plaintiff was riding a bicycle through an area where New York City Transit Authority workers were replacing tracks on an elevated subway line. The area was not barricaded. A railroad tie was dropped and struck the plaintiff on the back, fracturing multiple vertebrae in his thoracic spine, severing his spinal cord, and requiring emergency surgery. The plaintiff was rendered permanently paralyzed. A jury awarded him, inter alia, $9 million for past pain and suffering, $60 million for future pain and suffering for 48 years, and $40 million for future medical expenses. The defendant moved, among other things, to set aside the pain and suffering damages as excessive and for a collateral source hearing on the issue of future medical expenses, arguing that the uninsured plaintiff was eligible for insurance coverage through the ACA, which would offset the costs of his future medical expenses. The Supreme Court set aside the verdict on the issue of damages for past and future pain and suffering and directed a new trial with respect thereto, unless the plaintiff stipulated to reduce the awards to $4 million and $12 million, respectively. The Court also denied that branch of the motion requesting a collateral source hearing.
The Appellate Division, Second Department, without much discussion, affirmed the awards for pain and suffering, as reduced by the Supreme Court. This award of $16 million total for pain and suffering is seemingly a record high for the Second Department, although the First Department has sustained even higher awards.
The focus of the Second Department’s opinion was on the defendant’s request for a collateral source hearing. The Court held that while the standard of proof at a collateral source hearing was “clear and convincing evidence,” in order to be entitled to a hearing, a defendant merely needed to tender “some competent evidence” that the plaintiff’s economic losses may be replaced by collateral sources. The Court further held that the defendant in Liciaga met that burden through the submission of affidavits from a licensed insurance broker and a forensic economist. The broker identified a specific policy available through New York State’s Health Plan Marketplace (hereinafter the “Marketplace”), the types of care covered by the policy, the premium costs, and the maximum annual out-of-pocket costs. The economist opined that under that policy, the future value of the plaintiff’s future medical expenses would be $36,248,230, approximately $3.75 million less than the jury’s award. Thus, the defendant demonstrated through competent evidence that the plaintiff was eligible for an insurance policy available pursuant to the ACA through the Marketplace which, if procured, would pay for some portion of the plaintiff’s future medical expenses. This was sufficient to entitle the defendant to a collateral source hearing.
Practitioners in actions involving large awards for future medical expenses should be aware of the Second Department’s decision in Liciaga. If it can be demonstrated that a specific insurance policy was available to an uninsured plaintiff through the ACA, that he or she could procure it through the Marketplace, and that the policy would pay the cost of certain future medical treatment in a manner which would reduce his or her future medical expenses, a collateral source hearing should be held. Similarly, it is possible that this decision may be extended to past medical expenses, if it can be shown that an insurance policy which would have paid the cost of past medical expenses had been available to the uninsured plaintiff, who chose not to procure the policy. This would be consistent with the well-established principle that an injured plaintiff is obliged to mitigate damages. We will continue to monitor this case to see if either party seeks leave to appeal to the Court of Appeals and advise of any future appellate developments in this area.
