June 21, 2018

A police officer's accident disability retirement benefits are to be offset against the injured retiree's jury award for future lost earnings and pension


A police officer's accident disability retirement benefits are to be offset against the injured retiree's jury award for future lost earnings and pension
Andino v Mills, 2018 NY Slip Op 04273, Court of Appeals

Does a retired New York City police officer's accident disability retirement (ADR) benefits are a collateral source that a court must offset against the injured retiree's jury award for future lost earnings and pension?

The Court of Appeals held that a New York City retired police officer's accident disability retirement (ADR) benefits does so operate by [1] replacing earnings during the period when the officer could have been employed absent the disabling injury and then [2] serving as pension allotments. Accordingly, a court must offset the retiree's projected ADR benefits against the jury award for both categories of economic loss.*

Niurka Andino [Plaintiff] is a retired police officer who was injured on duty while riding in a police car that collided with a vehicle owned by the New York City Transit Authority (NYCTA) and operated by NYCTA employee Ronald Mills [Defendants].

Defendants moved to offset the jury award pursuant to CPLR §4545, which permits a court to find that certain awarded damages were or will, with reasonable certainty, be replaced or indemnified from a collateral source. Defendants contended that "when a police officer retires due to an on-the-job injury that leaves the officer disabled, the ADR benefits allotted to that officer for those years when the officer could have been working, if not for the disability, operate as lost earnings. Once the retired officer reaches the age for regular retirement from service, absent the retirement-inducing injury, ADR benefits serve as a pension."

Andino argued that [1] "there is no direct correspondence between her ADR benefits and the categories of economic loss awarded by the jury" and [2] "that ADR displaces Ordinary Disability Retirement (ODR), and the higher amount of ADR benefits as compared with ODR allotments is paid as a reward for services previously rendered." As the Court of Appeals characterized Andino's argument, "... the premium in ADR benefits as compared to ODR benefits is neither "earnings" nor "pension" but paid in gratitude for past services".

The Court of Appeals explained that ADR benefits, and the text and legislative intent of CPLR §4545, as interpreted by the court in Oden v Chemung County, 87 NY2d 81,** provide the basis for concluding that "ADR benefits operate sequentially as payment for future lost earnings and pension benefits." Accordingly, said the court, on a motion pursuant to CPLR §4545, "a court must apply ADR benefits, dollar-for-dollar, to offset the jury award for future lost earnings during the period they represent lost earnings, and future lost pension during the period they represent lost pension."

The court also rejected Andino's alternative argument that "ADR benefits are a 'reward' for the retiree's service which may not be offset against a jury award" as unpersuasive, explaining that "there is no support in the Administrative Code or CPLR §4545 or any available legislative history to treat ADR benefits as a category on its own, exempt from mandatory offset." In any event, said the court, "even if the Legislature sought to reward service members like Andino, who suffer an injury in the line of duty, that would not change the classification of ADR benefits as a replacement for lost earnings and pension allowances" as there is no legal justification for treating a portion of ADR benefits as a reward based on the 25% differential between ODR and ADR benefits. In the words of the Court of Appeals, "CPLR 4545 anticipates a dollar-for-dollar  offset" and that offset "is based on the category of reimbursement, not on a stratification of the collateral source total amount."

The case was remitted Supreme Court for further proceedings "in accordance with the opinion herein and, as so modified, affirmed," Judges Wilson dissenting in an opinion in which Judge Fahey concured.

* By stipulation, the parties agreed to set the period for future lost earnings at 19.24 years and future lost pension at 17.7 years.

** The specific facts of Oden, said the court, explain why that decision provides a different disposition than is called for Andino's case. In Oden, the plaintiff's private sector retirement pension benefits could not offset the jury's award for his future lost earnings because the pension allotments did "not necessarily correspond to any future earning capacity plaintiff might have had," because Oden "would have been free to earn income from his labor in other capacities without loss of his disability retirement pension benefits."

The decision is posted on the Internet at: