Dan D. KohaneHurwitz & Fine, P.C.

1300 Liberty BuildingBuffalo, NY 14202

ddk@hurwitzfine.com

RECOVERY OF ECONOMIC LOSS IN

AUTO CASES

1

THE STATUTE

The No Fault StatuteIs

Clear and Worth Reading

2

STUDY THE DEFINITION OF:

BASIC ECONOMICLOSS

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THREE CATEGORIES OF BASIC ECONOMIC LOSS

MedicalWages Household Expenses

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REMEMBERFor each category, consider the

definitional limitations:How long?How much?Any restrictions?

One need not exceed $50,000 for a category to be outside of Basic Economic Loss.

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INSURANCE LAW SECTION 5102

(a) "Basic economic loss" means, up to fifty thousand dollars per person of the following combined items, subject to the limitations of section five thousand one hundred eight of this article.

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Remember, for each category:If the amount in dispute is outside the definitional limitations, that amount is NOT Basic Economic Loss.

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MEDICAL – WHAT’S IN?(1) All necessary expenses incurred for:

(i) medical, hospital … surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services;

(ii) psychiatric, physical therapy (provided that treatment is rendered pursuant to a referral) and occupational therapy and rehabilitation;

(iii) any non-medical remedial care and treatment rendered in accordance with a religious method of healing …; and

(iv) any other professional health services. 8

MEDICAL LIMITATIONS

all without limitation as to time, provided that within one year after the date of the accident causing the injury it is ascertainable that further expenses may be incurred as a result of the injury. [restricted to WC schedule]

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WHAT DOES THAT MEAN Medical bills from dollar one, pursuant to

schedule Unlimited in time, provided that it is

medically ascertainable within one year that future meds may be necessary

Subject to combined $50,000 cap Anything beyond combined cap is NOT BASIC

ECONOMIC LOSS Can you buy more than $50,000 in

benefits? Sure, but what you buy is NOT Basic Economic Loss

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WAGES(2) Loss of earnings from work which the person would have performed had he not been injured, and reasonable and necessary expenses incurred by such person in obtaining services in lieu of those that he would have performed for income, up to two thousand dollars per month for not more than three years from the date of the accident causing the injury.

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WAGE LIMITATIONS$2,000 per monthThree years from the date of the accident

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WHAT DOES THAT MEAN Wages are only Basic Economic Loss for three

years from date of the accident Wages are only Basic Economic Loss up to

$2,000/month Subject to combined $50,000 cap Any wages beyond combined cap are NOT

BASIC ECONOMIC LOSS Any wages beyond $2,000/month are NOT

BASIC ECONOMIC LOSS Any wages beyond three years are NOT

BASIC ECONOMIC LOSS 13

HOUSEHOLD EXPENSES(3) All other reasonable and necessary expenses incurred, up to twenty-five dollars per day for not more than one year from the date of the accident causing the injury.

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HOUSEHOLD EXPENSE LIMITATIONS$25 per dayOne year from the date of the accident

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WHAT DOES THAT MEAN Household expenses are only Basic Economic

Loss for one year from date of the accident Household expenses are only Basic Economic

Loss for $25/day Subject to combined $50,000 cap Any household expenses beyond combined

cap is NOT BASIC ECONOMIC LOSS Any household expenses beyond $25/day are

NOT BASIC ECONOMIC LOSS Any household expenses beyond one year

are NOT BASIC ECONOMIC LOSS 16

BASIC ECONOMIC LOSS

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TEST Plaintiff is out of work for two months and earns $60,000 a year. He incurs $10,000 in medical bills during that time.

What is his wage loss? How much of it is Basic Economic Loss? How much Basic Economic Loss is left? Same questions, but he has purchased additional

PIP, that pay him $5,000 a month in lost wages. Same questions, but his medical bills have been

paid by Workers’ Compensation.18

TEST Plaintiff is out of work for two months and earns $60,000 a year. He incurs $40,000 in medical bills during that time.

What is his wage loss? How much of it is Basic Economic Loss? How much Basic Economic Loss is left? Same questions, but he has purchased additional

PIP, that pay him $5,000 a month in lost wages. Same questions, but his medical bills have been

paid by Workers’ Compensation.19

OTHER DEFINITIONS IN 5102 (c) "Non-economic loss" means pain and

suffering and similar non-monetary detriment.

(j) "Covered person" means any pedestrian injured through the use or operation of, or any owner, operator or occupant of, a motor vehicle which has in effect the financial security required by article six or eight of the vehicle and traffic…

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BASIC ECONOMIC LOSS

The definition of Basic Economic Loss does not

include the term “Serious Injury” and is not changed

by the presence or absence of a “Serious Injury”

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WHAT DOES THE STATUTE SAY?Everyone knows this:

There is no right of recovery for non-economic loss (pain and suffering) without a “Serious Injury”

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BUT WHY? Insurance Law 5014(a) tells us so. Notwithstanding any other law, in any action

by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state, there shall be no right of recovery for non-economic loss, except in the case of a serious injury, or for basic economic loss.

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Insurance Law 5104(a)§ 5104. Causes of action for personal

injury.

(a) Notwithstanding any other law, in any action by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state, there shall be no right of recovery for non-economic loss, except in the case of a serious injury, or for basic economic loss. 24

BUT THE STATUTE TELLS US SOMETHING ELSE

Notwithstanding any other law, in any action by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state, there shall be no right of recovery for non-economic loss, except in the case of a serious injury, or for basic economic loss.

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MORE SIMPLY STATED

Notwithstanding any other law, in any action by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state, there shall be no right of recovery … for basic economic loss. 26

SO, WHAT DOES THAT MEAN In NYS accident, where Covered Person is

suing Covered PersonIF there is a Serious Injury, plaintiff can recover:Non-Economic Loss (pain and suffering); and

Anything else EXCEPT that which is Basic Economic Loss. 27

SO WHAT CAN THE SERIOUS INJURY PLAINTIFF RECOVER?

Pain and sufferingEconomic loss that isn’t Basic Economic Loss

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SO WHAT CAN THE NON-SERIOUS INJURY PLAINTIFF RECOVER?

No pain and sufferingEconomic loss that isn’t Basic Economic Loss

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IN COVERED VS. COVERED, THE ONLY DIFFERENCE …

Between the Serious Injury Plaintiff and the non-Serious Injury Plaintiff is that the Serious Injury Plaintiff recovers for pain and suffering while the non-Serious Injury Plaintiff cannot.

Neither can recover for Basic Economic Loss. 30

PUT ANOTHER WAY

With respect to Economic Loss, both are permitted to recover Economic Loss that is excess over Basic Economic Loss.

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MEDICAL BILLSGo back to earlier slides:

Anything beyond $50,000 combined cap is NOT BASIC ECONOMIC LOSS

If you bought more than $50,000 in benefits what you bought is NOT Basic Economic Loss

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WAGES Wages are only Basic Economic Loss for three

years from date of the accident Wages are only Basic Economic Loss up to

$2,000/month Subject to combined $50,000 cap Any wages beyond combined cap are NOT

BASIC ECONOMIC LOSS Any wages beyond $2,000/month are NOT

BASIC ECONOMIC LOSS Any wages beyond three years are NOT

BASIC ECONOMIC LOSS 33

HOUSEHOLD EXPENSES Household expenses are only Basic Economic

Loss for one year from date of the accident Household expenses are only Basic Economic

Loss for $25/day Subject to combined $50,000 cap Any household expenses beyond combined

cap is NOT BASIC ECONOMIC LOSS Any household expenses beyond $25/day are

NOT BASIC ECONOMIC LOSS Any household expenses beyond one year

are NOT BASIC ECONOMIC LOSS 34

WHY IS ALL OF THIS IMPORTANT? Once $50,000 of Basic Economic Loss

benefits are exhausted, a plaintiff can recover any other economic loss, medical, wages and household, so long as proven to be caused by the accident.

However, once any CATEGORY of Basic Economic Loss benefit is exhausted, plaintiff may recover economic loss in that category.

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WAGES Assuming a plaintiff can prove negligence and

proximate cause, he or she who earns more than $2,000 a month ($24,000 a year) can recover any wage loss in excess of $2,000 a month whether or not that plaintiff has sustained a Serious Injury

A plaintiff who is out of work for two months and earns $60,000 a year ($5,000 a month) can recover $2,000 a month in lost wages (as Basic Economic Loss) whether or not she has a Serious Injury (until the $50,000 combined cap is reached)

A plaintiff who loses wages into the future, beyond three years, can recover all of those wages after the three year mark, EVEN without a Serious Injury 36

SO, HOW SHOULD THIS BE DONE? If the plaintiff is claiming that the $50,000

cap has been met, medical bills paid by No Fault and wages need to be considered on a month-by-month basis (No Fault carrier should be able to assist with that).

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ASSUME JANUARY 1, 2013, ACCIDENT – RECOVERABLE ECONOMIC LOSS - $60K SALARY

January$5,000 wages$10,000 meds

$12,000 in BEL---

$3,000 recoverable

February$5,000 in wages

$15,000 in medical[$17,000 in BEL – add to $12,000 from previous =

$29,000 total BEL]---

$3,000 recoverable

March$5,000 in wages

$10,000 in medical bills[$12,000 in BEL – add to previous = $41,000 total

BEL---

$3,000 recoverable

April$5,000 in wages

$8,000 in medical bills[The $8,000 in medical

bills will bring total BEL to $49,000]

$1,000 of the wage loss will bring the combined

cap to $50,000)--

$4,000 in wages recoverable

May (and thereafter)Since Basic Economic Loss is exhausted, all proven medical bills,

wage loss payments are recoverable

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ASSUME JANUARY 1, 2013 ACCIDENT – RECOVERABLE ECONOMIC LOSS - $36,000

SALARYJanuary

$3,000 wages$1,000 meds

$3,000 in BEL---

$1,000 recoverable

February$3,000 in wages

$1,000 in medical[$3,000 in BEL – add to $3,000

from previous = $6,000 total BEL]

---$1,000

recoverable

March$3,000 in wages

$1,000 in medical bills

[$3,000 in BEL – add to previous = $9,000 total BEL

---$1,000

recoverable

April (and thereafter)

Same analysis until $50,000 is

reached39

DETERMINE MONTH BY MONTH Remember that recovery of economic loss

does not require Serious Injury Jury can render full verdict, court can perform

calculations from No Fault carrier’s log of payments

Jury need not be charged on 5104(a); court can do all the calculations if parties cannot stipulate (after verdict)

Don’t sell clients short, wages recoverable over $2,000 a month, irrespective of Serious Injury

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IMPACT OF OBEL (5) “Basic economic loss” shall also include an

additional option to purchase, for an additional premium, an additional twenty-five thousand dollars of coverage which the insured or his legal representative may specify will be applied to loss of earnings from work and/or psychiatric, physical or occupational therapy and rehabilitation after the initial fifty thousand dollars of basic economic loss has been exhausted. This optional additional coverage shall be made available and notice with explanation of such coverage shall be provided by an insurer at the first policy renewal after the effective date of this paragraph, or at the time of application.

N.Y. Ins. Law § 5102 (McKinney)41

IMPACT OF APIP

APIP: Insurer subrogated to recovery in excess of Basic Economic Loss

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COVERED VS. NON-COVERED If defendant is Non-Covered person (products,

dram shop, municipal), Insurance Law 5104(b) established a LIEN on behalf of carrier that paid No Fault benefits:

In any action by or on behalf of a covered person, against a non-covered person, where damages for personal injuries arising out of the use or operation of a motor vehicle or a motorcycle may be recovered, an insurer which paid or is liable for first-party benefits on account of such injuries has a lien against any recovery to the extent of benefits paid or payable by it to the covered person. …

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© Hurwitz & Fine, P.C. 200944

Wage Component Basic Economic Loss

Subject to $50,000 Combined Limit

Covered v. CoveredWAGES

Calculate by Month

© Hurwitz & Fine, P.C. 200945

Economic Loss in Excess of BELAny wage loss over $ 2,000/month or in

excess of three years =Economic Loss in Excess of BEL

Recoverable irrespective of Serious Injury

Basic Economic Loss

$ 2,000/month =

Basic Economic Loss

Only for three years from date of loss

Not recoverable irrespective of Serious Injury

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Dan D. KohaneHurwitz & Fine, P.C.

1300 Liberty BuildingBuffalo, NY 14202

ddk@hurwitzfine.com

RECOVERY OF ECONOMIC LOSS IN

AUTO CASES

47