1. Whether N.Y. C.P.L.R. 4545(b) was impliedly repealed by N.Y. C.P.L.R. 4545(c) thereby making future lost earnings of a public employee subject to collateral source reduction under N.Y. C.P.L.R. 4545(c).

2. Whether the Appellate Division erred in applying N.Y. C.P.L.R. 4545(c) to reduce plaintiff's jury verdict for future lost earnings.

1. No. N.Y. C.P.L.R. 4545(b) was not repealed by implication and a jury verdict for future lost earnings of a public employee against his employer should not have been reduced by application of N.Y. C.P.L.R. 4545(c).

2. Yes. The Court erred in applying N.Y.C.P.L.R. 4545(c), rather than N.Y.C.L.P.R. 4545(b), which governs the availability of collateral source reductions in certain cases brought by public employees against their public employers.

Plaintiff Iazzetti, an employee of the New York City of Sanitation, was injured when he stepped into an unprotected drain opening at the garage where he worked. The Board of Trustees of the New York City Employees' Retirement System subsequently granted Plaintiff Accident Disability Retirement status which enabled Plaintiff to receive a pension equal to three-quarters of his last annual salary as well as an annuity based upon his accumulated contributions to the retirement system. Later, Plaintiff and his wife commenced a personal injury action against the City of New York. He was subsequently awarded a jury verdict for past lost earnings and benefits; past pain and suffering; future lost earnings, benefits, and pension; and future pain and suffering. Following the verdict, the City moved for a reduction in the past and future lost earnings, benefits, and pension pursuant to N.Y. C.P.L.R. 4545.

After a collateral source hearing, the Supreme Court allowed the City to offset the jury award for past lost earnings, but not future losses, in accordance with N.Y. C.P.L.R. 4545(b) by the amount Plaintiff had received from his accident disability retirement pension. Because the pension had already paid Plaintiff more than the jury award, the Supreme Court deleted this component of the award. On appeal, the Appellate Division held that the Supreme Court should have applied N.Y. C.P.L.R. 4545(c), which allows for an offset of both past and future economic losses, and not subsection (b). Therefore, on remand, the Supreme Court further reduced the verdict by the amount the plaintiff would receive from collateral source reimbursement for future losses. Again, because the amount the Plaintiff would receive from his pension exceeded the award given by the jury, the court modified the verdict by reducing the amount for future losses to zero.

The Court of Appeals reversed, holding that N.Y. C.P.L.R. 4545(b) was not repealed by implication of N.Y. C.P.L.R. 4545(c) and should have been applied in this case. In discussing the rationale for this decision, the Court discussed the legislative history of the collateral source rule as well as the distinctions of the subsections of this statute. The legislative history indicates that because the Legislature did not amend subdivision (b) when it amended (a) and added (c), both of which now provide for the offset of future loss reimbursements, it is clear that the Legislature simply did not intend to permit reductions for future collateral source payments in actions governed by subdivision (b). See Ryan v. City of N.Y., 79 N.Y.2d 792, 794. The Court noted that the primary distinction between (b) and the other subdivisions of N.Y. C.P.L.R. 4545 is that it permits for damages awards to be offset only by the collateral source reimbursement of past costs or expenses.

The three subdivisions of N.Y. C.P.L.R. 4545, however, are to be read together so that all may be given effect. Subdivision (a) governs collateral source reductions in medical, dental, and podiatric malpractice suits, subdivision (b) governs suits by public employees against their employers, and subdivision (c) governs all other actions brought to recover damages for personal injury, injury to property or wrongful death. Therefore, subdivision (c) was meant to complement the other sections. The instant case falls squarely into subdivision (b).

The Court declined to address the policy implications of the Legislature's choice and did not reach the issue of whether a direct correspondence exists between Plaintiff's accidental disability retirement pension and his future lost earnings.