Where an insurer, on behalf of its insured, prior to a judgment or settlement in a tort action, makes voluntary advances for medical treatment to an injured party receiving public assistance, those advances do not constitute "the payment of any moneys" within Social Services Law § 104-b, so as to defeat the lien of the social services agency for its payments for medical treatment.
On June 7, 1981, plaintiff William Kidney, Jr., an infant, suffered serious injuries when he climbed on a transformer located on the property of defendant Kolmar Laboratories, Inc. On July 13, 1981 and again on July 1, 1982, Liberty Mutual Insurance Co., on behalf of Kolmar (its insured), voluntarily made advances of $30,000 for William Jr.'s medical treatment to the infant's parents, intending that these advances be offset against any ultimate award. Respondent, the Orange County Department of Social Services (DSS), also made payments (totaling $27,503.33) to the boy's father for William Jr.'s medical treatment. An action against Kolmar and Orange and Rockland Utilities, Inc., in the United States District Court for the Southern District of New York, resulted in a judgment in the amount of $637,500 for William Jr. and $37,500 for his father, plaintiff William Sr. Kolmar's share of the judgment payable to William Sr. was $22,500.
Two weeks after entry of judgment, DSS served and filed a notice of lien, pursuant to Social Services Law § 104-b, for the $27,503.33 previously paid to William Sr. Plaintiffs moved for
The District Court concluded that the award to William Sr. included payment for his son's medical expenses, and therefore was subject to recoupment, and it upheld the DSS lien on that award.
On Kolmar's appeal, the United States Court of Appeals certified to us the following question (which we accepted for review): "whether money advanced by an insurer on behalf of its insured to an injured party, prior to settlement or judgment of a tort action, is `the payment of any moneys' within
Social Services Law § 104-b allows social service agencies, in certain instances, to recoup public assistance payments for "assistance and care" from recipients who subsequently obtain recoveries in personal injury actions. Section 104-b (1), in particular, authorizes these agencies to fix liens against the recoveries, thereby enabling the agencies to recover the payments directly from the tort-feasors or their insurers. Section 104-b (2), however, imposes a notice requirement: "No such lien shall be effective * * * unless a written notice * * * is * * * served [upon the tort-feasor and its insurer] prior to the payment of any moneys to such injured party". The validity of the DSS lien here depends on whether or not the voluntary advances by Kolmar's insurer constitute "the payment of any moneys" within the meaning of section 104-b (2).
We agree with the conclusion of the District Court that "the payment of any moneys" as used in Social Services Law § 104-b (2) means payments made as a matter of obligation, not voluntary advances. Reading the word "payment" to mean performance of a duty or obligation, or discharge of a debt (see, Black's Law Dictionary, at 1016-1017 [5th ed]), in this case supports the legislative purpose in enacting Social Services Law § 104-b — to facilitate recoupment of public funds by social services agencies (see, Baker v Sterling, 39 N.Y.2d 397, 405-406). Conversely, the interpretation urged by appellant — that "the payment of any moneys" means any transfer of money — would enable a tort-feasor or its insurer, by even minimal voluntary advances to an injured indigent person, to defeat the agency's lien and thereby render the statute meaningless. While defendant urges that public policy will be disserved by our reading of the statute, because tort-feasors and their insurers will be discouraged from making voluntary advances, it remains for the Legislature to amend the law if our construction does not conform to the legislative purpose.
Accordingly, the certified question should be answered in the negative.
On review of submissions, following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this court pursuant to section 500.17 of the Rules of Practice of the New York State Court of Appeals (22 NYCRR 500.17), certified question answered in the negative.