I was involved in a car accident last year. The only injury I sustained was a large cut on my arm that has left me with a scar. Can you tell me if it is worth trying to bring a case over a scar?

The short answer is yes. In New York, if you were involved in a car accident, your medical bills are covered by No-Fault. (Generally, the vehicle in which you were riding or driving has a health insurance rider attached to the car insurance policy which covers medical expenses. But if you were driving or riding for your job, your employer’s worker’s compensation policy would cover medical expenses.)

In addition to medical expenses, you may also make a claim for pain and suffering against the at-fault parties who caused your injuries. Under the no-fault law, you can sue for and be awarded damages for a scar. There may be certain tiny scars which may not be awarded damages. However, you stated that you sustained a “large” cut, so I am assuming you have a corresponding “large” scar.

Scar cases are generally quick to try since no doctor testimony is necessary to prove a scar was caused by a laceration. A jury would normally see hospital records, look at photographs of the laceration, and would review the scar on the injured party.

Zone of Danger

Last year this website wrote a blog that touched on the issue of negligent infliction of emotional distress. The Court of Appeals recently wrote an opinion clarifying an issue surronding these claims: Green v Esplanade Venture Partnership, 2021 NY Slip Op 01092.

This sad story occurred May 17, 2015 when two year old Devere Green was a pedestrian killed by debris that fell from the front of a building owned by defendant. Devere Greene was in the company of her grandmother, Susan Frierson, at the time of this accident. Frierson wanted to make her own claim for damages against the defendant for emotional distress. The Court had previously held that Frierson could make such a claim if she was in the “zone of danger” and she was in the “immediate family” of the injured party.

There was no issue that Frierson was in the “zone of danger” since she was right next to her grandaughter when the debris struck. But prior cases limited recovery to a parent as part of the “immediate family.” This Court in Greene, found that a grandparent could be part of the injured party’s “immediate family.” However, the Court also mentioned there was an “emotional bond” between Frierson and Greene. Frierson was activerly involved in the child’s life with frequent visits and sleepovers at Frierson’s home.

So now this opens additional questions regarding negligent infliction of emotional distress (or “zone of danger”) cases. If an injured party is accompanied by an aunt, or a cousin, or close friend at the time of an accident, could that uninjured person that witnessed the accident make a claim for emotional distress if they have an “emotional bond” with the injured party?

Excess Insurance

“My son was seriously injured in a bicycle accident, but I was disappointed with the recovery he received because my lawyer told me there was a problem with insurance coverage. What can I do to help my son?”

All cars are required by law to carry minimun liability coverage for all accidents. Excess insurance is a term used to describe additional insurance coverage for motor vehicle accidents. If the owner/operator of a car purchased an “umbrella” policy, then the “umbrella” policy would afford additional coverage for a motor vehicle accident. If the owner of a vehicle is different than the operator, then the operator may have his or her own insurance coverage in addition to the policy covering the vehicle. If a tractor/trailor was involved in the accident, then sometimes trailors have their own policies different than the tractor which could provide additional coverage for your accident.

If your son’s case is settled, then there is nothing anybody can do.

But if your son’s case is not settled, your attorney must look for all of the available insurance covering an accident to maximize your son’s recovery. Many defendants simply do not have assets worth attaching to collect a judgment. If your son did obtain a large monetary judgment against the driver that struck him, bankruptcy laws will allow the defendant to discharge that debt through bankruptcy. Your son may be in better position if he had settled his case for the available insurance coverage. But your attorney must look for all available insurance coverage.

Income Tax on Injury Settlement

“Do I have to pay income taxes on my personal injury settlement?”

No. If you receive a settlement for a personal injury case, the IRS deems that settlement as making up for a loss you sustained and not income.  So if your car is stolen, and your insurance company gives you a check for the value of the car, that money you get from insurance for the stolen car is not taxable because it making up for the loss you sustained, the money the insurance company gives you is not “income.”

Bankruptcy Stay

“I have an existing case which seems to be taking forever to settle. I was told there is a stay or hold on the case because one of the defendants is in bankruptcy. How long can a case be stayed?”

When we initially consult with clients, we try to give clients a range of how long their case might be around until it is resolved. This is far from an exact science, but based upon the case type, likely venue, and decades of experience, we are able to give people a good faith range. However, when one of the defendants files for bankruptcy protection, this puts a hold on the case until the bankruptcy case is resolved in some fashion.

A bankruptcy is settled when the creditors agrees to a plan to pay off debts, or the debtor files for liquidation to get rid of their debt. Either of these options take years, and all the while, the personal injury case sits idle. We normally advise our clients to go to the bankruptcy court and petition to lift the stay to the extent of available insurance. This limits the personal injury recovery to the extent of insurance (whether it is $1 million or $25,000), but it moves the personal injury case toward settlement. This is normally in the injured party’s interest because if the defendant is already bankrupt, the odds of collecting a judgment against such a defendant are minimal.

Bankrupt defendants must be handled quickly and professionally. The attorney must file a ‘proof of claim’ with the bankruptcy court when she or he learns of the bankruptcy. The attorney will also have to file a stipulation or possibly a motion in bankruptcy court to lift the stay.

I will share one story of a prior case with our office of one of the longest running cases we had. In this particular case, after some initial discovery, one of the defendants filed for a bankruptcy stay putting the case on hold. The defendant was a business entity and it took some time to lift the stay in bankruptcy court.  Unfortunately, when the stay was lifted on the defendant, the defendant’s insurer went bankrupt. There was another stay until the New York Liquidation Bureau took over the case from the bankrupt insurer and eventually the client received a settlement. But this case was an extreme outlier.