                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: November 20, 2014                 518026
________________________________

NEW YORK STATE WORKERS'
   COMPENSATION BOARD,
                    Respondent,
      v                                     MEMORANDUM AND ORDER

BAST HATFIELD, INC.,
                    Appellant.
________________________________


Calendar Date:   September 12, 2014

Before:   Peters, P.J., Stein, Garry, Egan Jr. and Clark, JJ.

                             __________


      Couch White, LLP, Albany (Donald J. Hillmann of counsel),
for appellant.

      Scott T. Harms, New York State Workers' Compensation Board,
Schenectady, for respondent.

                             __________


Clark, J.

      Appeal from an order of the Supreme Court (Crowell, J.),
entered May 30, 2013 in Saratoga County, which, among other
things, denied defendant's motion to compel plaintiff to file a
satisfaction piece against a certain judgment.

      Defendant was an employer member of Elite Contractors Trust
of New York, a group self-insured trust (hereinafter GSIT) that
was formed in 1999 to provide mandated workers' compensation
coverage to the employees of trust members. In April 2010,
plaintiff determined that the trust was insolvent and assumed its
administration (see Workers' Compensation Law § 50 [3-a] [8]; [5]
[f]; 12 NYCRR 317.20 [c]). A deficit reconstruction subsequently
revealed that Elite had an $82 million member deficit. Based
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upon that deficit, plaintiff levied an assessment against
defendant for $2.1 million, which represented defendant's pro
rata share of Elite's total member deficit (see Workers'
Compensation Law § 50 [3-a] [7] [b]). After defendant failed to
make any payment toward the assessment, plaintiff sent defendant
a final demand for payment and informed defendant that any
further failure to pay both its pro rata share and awards of
compensation to its injured employees would result in plaintiff
filing a judgment against defendant.

      In December 2011, following defendant's continued failure
to pay, plaintiff obtained a Workers' Compensation Law § 26
judgment against defendant in the amount of $26,177.15,
representing workers' compensation payments that plaintiff made
to Owen Flavin, one of defendant's injured employees, between
July 2010 and November 2011. In February 2013, defendant moved
to compel plaintiff to file a satisfaction piece against that
judgment on the basis that the judgment had been satisfied by
payments made to plaintiff by the Special Disability Fund
(hereinafter SDF) pursuant to Workers' Compensation Law § 15 (8).
Supreme Court, among other things, denied defendant's motion and
determined that the judgment could only be satisfied by payments
made by defendant or Elite and, thus, the judgment had not been
satisfied. Defendant now appeals and we affirm.

      Pursuant to Workers' Compensation Law § 50 (3-a) (7) (b),
plaintiff can levy an assessment on the members of a defaulted
GSIT for such an amount that is, among other things, necessary to
discharge the GSIT's liabilities. Notwithstanding such
assessment, each member of the defunct GSIT remains "jointly and
severally responsible" for all of the GSIT's liabilities
(Workers' Compensation Law § 50 [3-a] [7] [b]). In 2010, the
Legislature added a clause to Workers' Compensation Law § 50
(3-a) (7) (b) to provide that, "separate and apart from, and in
addition to a member's joint and several liability," where a
member fails to pay a levied assessment, the member "shall be
deemed in default" (see L 2010, ch 56, part R, § 4). Once in
default, the member is subject to the enforcement mechanism
contained in Workers' Compensation Law § 26, which provides, in
pertinent part, that, where the employer defaults "in the payment
of any compensation due under an award," plaintiff may file,
                              -3-                518026
among other things, a certified copy of the decision awarding
compensation and "thereupon judgment must be entered" (see
Workers' Compensation Bd. of State of N.Y. v Rizzi, 14 AD3d 608,
608-609 [2005]).

      Here, defendant does not dispute the fact that, pursuant to
Workers' Compensation Law § 50 (3-a) (7) (b), it is in default
because it has not paid any money towards its pro rata share of
Elite's deficit and, thus, plaintiff was entitled to obtain a
Workers' Compensation Law § 26 judgment against it for any
awards due and owing on claims filed by its employees.
Defendant's pro rata share of Elite's deficit, in turn, includes
a portion of Elite's share of the assessment levied by plaintiff
that is used to fund the SDF (see Workers' Compensation Law §§ 15
[8] [h]; 151). Despite the fact that defendant has never paid
its share of those assessments in the years for which Flavin
received benefits, it is undisputed that plaintiff has received
reimbursement from the SDF for some of the money it has expended
paying for those benefits. Thus, the pertinent issue before this
Court is whether such reimbursement warrants the filing of a
satisfaction piece.

      To this end, Workers' Compensation Law § 50 (3-a) (7) (b)
explicitly provides that plaintiff can obtain a judgment against
a defaulting member of a GSIT for workers' compensation awards
obtained by the member's employees "that have neither been paid
by the member or the [GSIT]" (Workers' Compensation Law § 50
[3-a] [7] [b] [emphasis added]). To date, defendant has paid
neither its pro rata share of Elite's total member deficit, which
includes its share of the assessments intended to fund the SDF
and provide for the very reimbursement paid to plaintiff, nor the
underlying award of compensation to its injured employee. As
previously noted, plaintiff was therefore entitled to obtain a
judgment against defendant representing the amount paid by
plaintiff to Flavin on defendant's behalf.

      We are unpersuaded by defendant's contention that the
payment by the SDF to plaintiff served to satisfy the judgment
obtained against defendant. A brief overview of how plaintiff
and the SDF are funded, along with plaintiff's obligations under
the circumstances here, is necessary to our analysis. Pursuant
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to Workers' Compensation Law § 50 (5) (f), if an insolvent GSIT,
such as Elite, fails to pay compensation and benefits owed to an
employee, plaintiff is required to pay such benefits as expenses
of administration. Plaintiff is also required to levy
assessments against, as relevant here, self-insured employers and
GSITs to assure, among other things, its ability to make prompt
payments of such compensation and benefits (see Workers'
Compensation Law § 50 [5] [g]; see also Workers' Compensation Law
§ 15 [8] [h]). In general, a portion of the assessments levied
by plaintiff is used to establish separate funds out of which,
under certain conditions, liability for employee benefits are
shifted from an employer to a special fund, such as the SDF (see
Workers' Compensation Law §§ 15 [8] [h] [4]; 151 [2] [c]).
Neither the levy of assessments nor the payment of benefits by
plaintiff precludes plaintiff from recovering from the defaulting
party (see Workers' Compensation Law § 50 [5] [g]), and any money
reimbursed to plaintiff must be applied "against the expenses on
which the assessment levied" against employers is calculated
(Workers' Compensation Law § 50 [5] [f]).1

      Applying the foregoing to the situation here, given Elite's
insolvency, plaintiff assumed Elite's responsibility for paying
workers' compensation benefits owed to Flavin out of plaintiff's
administrative expenses, which were funded, in the first
instance, through assessments levied on Elite – which were unpaid
by either Elite or defendant – and other private self-insured
employers and GSITs. When plaintiff was reimbursed by the SDF –
which is also funded through plaintiff by such assessments – it
was essentially deprived of the ability to levy an assessment
therefor. Thus, the judgment at issue here is intended to assist
in recovering the money that plaintiff paid to Flavin, as
plaintiff is authorized to do under Workers' Compensation Law §
50 (5) (g).   In sum, notwithstanding defendant's claim that
Supreme Court's order results in a double recovery for plaintiff,
given the statutory scheme, we conclude that no impermissible


     1
        Thus, where reimbursement is received, plaintiff may not
assess employers for the amount previously paid or must
credit/reduce further assessments accordingly (see Workers'
Compensation Law § 50 [5] [f]).
                              -5-                  518026
benefit to plaintiff results. Accordingly, we find that
plaintiff's judgment was not satisfied by reimbursement payments
made by the SDF and, therefore, defendant's motion for the filing
of a satisfaction piece was properly denied. Defendant's
remaining arguments have been considered and have been found to
be without merit.

     Peters, P.J., Stein, Garry and Egan Jr., JJ., concur.



     ORDERED that the order is affirmed, without costs.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
