A significant question of first impression was addressed on August 21st, 2024, by the Appellate Division, Second Department in Liciaga v. New York City Transit Authority: Whether a Defendant has the right to seek a hearing pursuant to CPLR 4545, to establish the extent to which a Plaintiff's potential future medical costs would be reduced by insurance available to such Plaintiff, including the Affordable Care Act. This ruling was particularly important given the changing face of healthcare and access thereto.
The Patient Protection and Affordable Care Act, or “PPACA”, dramatically changed the healthcare landscape throughout the United States by providing basic health insurance to millions of previously uninsured people. With insurance options increasingly becoming available, especially to the uninsured at the time of an injury, Courts have now started to recognize that potential offsets are now available, and ought to be factored in the determination of damages. As stated by the New York State Supreme Court, Kings County, in Liciaga, when Plaintiffs have access to insurance, these avenues must be explored during collateral source hearings in order to appropriately adjust awards for damages.
The facts in Liciaga are particularly interesting. The Plaintiff was 23 years-old and uninsured, when he fell in a non-barricaded drop zone. Thereafter, he was struck from behind by a railroad tie, resulting in severe injuries such as multiple fractures in his thoracic spine and a severed spinal cord. The incident ultimately resulted in Plaintiff claiming permanent paralysis. At trial, the jury concluded that Defendant's negligence was a substantial factor in causing Plaintiff's injuries and awarded the Plaintiff a verdict in excess of $100,000,000 ($9 million for past pain and suffering, $60 million for future pain and suffering, $1,174,972.38 for past medical expenses, and an astounding $40 million for future medical expenses).
Following the jury verdict, Defendant moved, pursuant to CPLR 4404(a), for a new trial limited to the issue of damages. Alternatively, if such request was to be denied, Defendant requested a collateral source hearing pursuant to CPLR 4545 in order to scrutinize the future medical expenses issue more closely. The underlying premise of that motion was that Plaintiff, although uninsured on the date of this accident, was entitled to insurance through the PPACA, which would greatly reduce the economic burden of Plaintiff's future medical expenses. However, the trial court denied Defendant's request for a collateral source hearing, and Defendant appealed.
On appeal, the Appellate Division, held that a hearing can be granted to the Defendant when there is competent evidence showing that the Plaintiff's economic losses may be recoverable from collateral sources either in the past or in the future. Further, the Court explained that an application for a collateral source hearing may be made at any time prior to the entry of judgment, unless otherwise directed by the court. The rule insulates Defendants in this way from having to bear the entire cost of damages as insurance would likely cover part of such expenses. It serves further to underscore that courts must acknowledge the realities of an evolving healthcare system wherein options of insurance coverage are becoming plentiful and will influence personal injury cases.
In short, Liciaga v. New York City Transit Authority sets forth a new mitigation device available in future cases involving uninsured Plaintiffs.