Lennon: Parting the Red Sea of Collateral Estoppel Defenses

Written by: Joshua T. Reese, Esq.

In an Opinion and Order handed down on September 15, 2021, the Appellate Division, Second Department examined the nuanced collateral estoppel effects of a Workers’ Compensation Board determination on a related personal injury lawsuit.

The factual allegations in Lennon are, at first blush, unremarkable. The plaintiff, Sean Lennon (no relation to the legendary Beatle), claimed that while working a construction site, he boarded an elevator that subsequently made multiple sudden rises and drops. The unexpectedly bouncing elevator purportedly caused him to sustain knee injuries.[1] Afterward, Mr. Lennon commenced a lawsuit in Supreme Court, Kings County against the owner, construction managers, and contractor.[2] When he was deposed, the plaintiff conceded that (1) he filed a claim for workers’ compensation; and (2) the claim was denied. According to the defendants, the plaintiff did not serve an authorization permitting them to obtain his Workers’ Compensation records until three days before placing the case on the trial calendar. Although a motion to vacate the Note of Issue was filed, the Supreme Court referee denied it to the extent that the case was permitted to remain on the trial calendar while discovery was completed. Regardless, the defendants learned the plaintiff’s workers’ compensation claim was denied based upon a finding that the hoist elevator did not malfunction in any way, much less in the drastic and dramatic way described by the plaintiff. The defendants also learned this finding was affirmed by the Workers’ Compensation Board. They subsequently moved to amend their answer to include the affirmative defense of collateral estoppel, and thereafter for summary judgment on the ground that the Workers’ Compensation Board’s decision estopped the plaintiff from maintaining his claims. The Supreme Court granted the motion in its entirety, and the Second Department affirmed.

The Court initially addressed the defendants’ request to amend their answer, determining (1) the estoppel defense had merit (as discussed more fully below); and (2) the plaintiff was not prejudiced by the amendment since he was present for (and indeed, aware of) the determination, and since the request was not made on the eve of trial.

The Court then moved on to address the summary judgment motion and the merits of the collateral estoppel defense. It initially recited the requirements of the doctrine: (1) identity of the issue decided in the prior action and decisive in the present action, and (2) a full and fair opportunity to contest the controlling decision. The Court then noted that not all workers’ compensation determinations have a preclusive effect in a plaintiff’s personal injury action, which the Court described as “much broader in scope.” Cases in which workers’ compensation determinations are not preclusive can be delineated into ones focused on “the nature or chronology of damages” and ones focused on liability.

The Second Department pointed out that a workers’ compensation claim may have a more narrow list of injuries than a related lawsuit. Similarly, while the subject incident may be the same across a workers’ compensation claim and a personal injury suit, some of the injuries at issue in the plenary action may have manifested after the workers’ compensation claim was filed.

As an example of a liability distinction, the Court cited Vitello v. Amboy Bus Co., wherein the Workers’ Compensation Board was concerned with the identity of the employer in determining eligibility for benefits (not at issue in the coordinate personal injury action). In contrast to Vitello (and cases with similar facts), the Second Department observed that Mr. Lennon’s workers’ compensation outcome pivoted on whether “an injury-producing accident” occurred. As the Board decided none did, the Court concluded that this finding was “a dagger in the heart of the plaintiff’s entire personal injury action” and it affirmed the Supreme Court’s grant of summary judgment.

The takeaways from Lennon are both procedural and substantive. With respect to procedure, the case demonstrates that motion practice may be necessary in at least Kings County to obtain tardy disclosures, lest a Note of Issue deadline approach and the case be placed on the trial calendar with discovery outstanding. The case also includes an implicit warning that a motion to amend a pleading, if necessary, should be instituted as soon as possible – and certainly before a trial date is assigned: “the application was not presented as the parties were nearing a date for trial.”

The lessons in substantive law are straightforward and explicit: not every workers’ compensation determination will have a preclusive effect on a related personal injury action. Indeed, Lennon draws a red line – or in the Court’s words, it “define[s] how to part the Red Sea” – in assessing the estoppel effects of prior administrative determinations. In following the Court’s roadmap, practitioners in the Second Department should be able to more clearly analyze potential estoppel defenses in Labor Law cases and tailor their summary judgment motions accordingly.

 [1] Lennon, 2021 WL 4185764 at *1.

[2] Lennon v. 56th and Park (NY) Owner, LLC, et al (Sup. Ct., Kings Cty. Index No. 508298/2014) (hereinafter, “Lennon Supreme Court Docket”).

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