Considerations in New York Automobile Accident Cases: Burgio, Kita & Curvin

No Recovery for First $50,000 (U.S.) in
Combined Medical Expenses/Lost Wages in
New York Automobile Accident Cases

New York has a comprehensive �no-fault� statutory scheme which is applicable to automobile accidents (while the legislation applies to a pedestrian injured by an automobile, it does not apply to a motorcyclist). Under that scheme, there is no right of recovery for �basic economic loss� in any action brought by a covered person against another covered person (New York Insurance Law Section 5104(a); a �covered person� is defined as a person who has the statutory insurance/�no-fault� coverage in place (Insurance Law Section 5102(j)).

The term �basic economic loss� means up to $50,000 per person for all necessary medical expenses (including hospital, x-ray, prescription drug, etc.) and loss of earnings from work up to $2,000 per month for not more than three years from the date of the accident causing the injury (New York Insurance Law Section 5102(a)).

Where a jury returns an award for medical expenses or lost wages within the $50,000 figure, the Court is required to vacate that portion of the award (Fischer v. Luczak, 198 A.D.2d 474, 605 N.Y.S.2d 928; Ellis v. Johnson Motor Lines, Inc., 198 A.D.2d 258, 603 N.Y.S.2d 523 (2nd Dept., 1993); Shalom v. Sahani, 137 A.D.2d 454, 524 N.Y.S.2d 714 (1st Dept., 1988)). This is true even where the plaintiff does not receive �first party benefits� (i.e. payment to reimburse a person for �basic economic loss�; see New York Insurance Law 5102(b); Hughes v. Ryder Truck Rental, Inc., 125 A.D.2d 177, 508 N.Y.S.2d 442 (1st Dept., 1986)).

If the medical expenses and lost wages up to $50,000 (i.e. �first party benefits�) are not paid by the insurer to the insured plaintiff, the plaintiff has the option of submitting the dispute with its no-fault carrier (responsible for payment of the $50,000) to arbitration (New York Insurance Law Section 5106(b)) for suing his no-fault carrier in court based upon breach of the insurance contract (Marangiello v. Kamak, 64 A.D.2d 624, 406 N.Y.S.2d 879 (2nd Dept., 1978)). Since such actions are based upon breach of the insurance contract, the statute allows for recovery of interest on overdue payments and attorney’s fees in securing such repayment (Insurance Law Section 5106(a)). However, once a decision has been made to proceed to arbitration, the plaintiff may not thereafter commence litigation based on the same claim since the plaintiff will be deemed to have elected his or her remedy (Roggio v. Nationwide Mutual Insurance Company, 66 N.Y.2d 260, 496 N.Y.S.2d 404, 487 N.E.2d 261 (1985)).

Have a legal problem in New York State and need advice? Have a lawsuit in New York State and need someone to represent your insured’s interests? Contact Burgio, Kita & Curvin, 2150 Main Place Tower, Buffalo, New York 14202, (800) 853-1744 or visit