Hyde v. North River Insurance

in which he was a passenger was forced off the road by an unidentified vehicle and plunged down an embankment. Plaintiff’s underlying lawsuit resulted in a verdict of $1,000,000 in his favor.^[1] North River Insurance Company, which had paid $50,000 in no-fault first-party benefits to plaintiff, filed a lien against the judgment pursuant to subdivision 2 of section 673 of the Insurance Law. Plaintiff commenced this action to vacate the lien. Special Term granted plaintiff’s motion for summary judgment, holding that because the jury verdict was solely for noneconomic loss (pain and suffering), there was no double recovery of basic economic loss and, therefore, the lien was invalid. The court, therefore, held that subdivision 2 of section 673 of the Insurance Law was inapplicable. The court also rejected defendant’s contention that the County of Rensselaer was a “covered person” as defined in subdivision 10 of section 671 of the Insurance Law. Defendant’s motion for leave to renew or reargue was denied. Defendant has appealed from both orders. There are well-established rules which govern the instant factual situation and should be restated. It is undisputed that plaintiff sustained a “serious injury” as defined under the law (Insurance Law, § 671, subd 4) permitting him to bring an action in negligence against the culpable party to recover damages to compensate for his personal injuries, including conscious pain and suffering. The only restriction is that he could not sue another “covered person” for his “basic economic loss” (Insurance Law, § 673, subd 1; Matter of Adams [Government Employees Ins. Co.], 52 AD2d 118 , 120). No such statutory restriction applies in the case of a suit brought against a noncovered person such as an uninsured motorist, the owner of a hit-and-run automobile, or, as hereinafter discussed, where liability is not predicated upon use of a defendant’s motor vehicle. Virtually every motor vehicle is required by law to be insured to provide coverage for “first party benefits” to all persons sustaining injuries resulting from the use of said vehicle, with certain exceptions not here applicable (Insurance Law, § 672, subd 1). First-party benefits are defined as “[Bjasic economic loss”, which means reimbursement or payment of medical expenses, loss of earnings, and other defined reasonable or necessary expenses, up to an aggregate total of $50,000 (Insurance Law, § 671, subds 1, 2). Having paid $50,000 in first-party benefits to plaintiff, • defendant then filed a lien against the proceeds of plaintiff’s recovery from Rensselaer County, asserting its rights pursuant to subdivision 2 of section 673 of the Insurance Law, which states: “In any action by or on behalf of a covered person, against a noncovered 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 shall have a lien against any recovery to the extent of benefits paid or payable by it to the covered person” (emphasis added). Special Term, in granting plaintiff summary judgment, made two specific findings. First, the court rejected plaintiff’s contention that the County of Rensselaer was a “covered person” (Insurance Law, § 671, subd 10), on the premise that merely owning motor vehicles subject to the no-fault requirements did not result in covered person status. Since no vehicle owned by the county was involved in the accident, we agree that the county cannot be considered a “covered person” (see Acevedo v G.E.I.C.O., 87 AD2d 600 ). Second, the Special Term Justice (who also presided at the trial in the underlying action) found that the jury verdict in the tort action did not include any portion of the basic economic loss sustained by plaintiff and paid by defendant. The record shows that while plaintiff’s attorney during opening argument stated