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On Sept. 9, just days before the 21st anniversary of the Sept. 11, 2001, terrorist attacks, New York Gov. Kathy Hochul signed a package of legislation that
supports 9/11 victims, first responders and their loved ones.
Included in the package were two laws that should have the effect of streamlining the process by which the New York State Surrogate’s Court exercises oversight of claims filed with the federal September 11th Victim Compensation Fund, or VCF, on behalf of deceased individuals.
Background
The VCF provides compensation for personal injury and wrongful death claims to eligible victims. In addition to this compensation, the World Trade Center Health Program, administered by the National Institute for Occupational Safety and Health, provides free medical monitoring, treatment and medication to eligible individuals.
Generally, anyone who was present south of Houston Street for any reason between Sept. 11, 2001, and July 31, 2002, may be eligible for health benefits from
the World Trade Center Health Program and compensation from the VCF. Eligible individuals can file claims for personal injuries caused by the 9/11 terrorist attacks and the ensuing toxic dust cloud, and beneficiaries of eligible deceased individuals can file personal injury and/or wrongful death claims on their behalf.
While the compensation provided by the VCF is determined by federal law, upon award to an estate of a deceased victim, the distribution of that compensation is governed by state law. In New York, the Estates, Powers and Trusts Law is the applicable law.
New Legislation
Chapter 558 of the Laws of 2022 amends EPTL Section 11-4.7e(3), expanding the application of the provision that enables the VCF to continue processing claims of victims who died of a 9/11-related illness, as well as the claims of those who suffered from a 9/11-related illness but died of an unrelated cause, without requiring the invention of the Surrogate’s Court.
Chapter 557 of the Laws of 2022 amends EPTL Section 5-4.6 to obviate the need for a compromise proceeding for VCF awards that consist of solely noneconomic losses. Both bills were drafted to help expedite the payment of VCF awards to beneficiaries of VCF death claims filed on behalf of individuals who suffered from 9/11-related illnesses.
Chapter 558 — Changes to EPTL Section 11-4.7e(3)
Under the EPTL, in order to bring a wrongful death action on behalf of a decedent, a personal representative of the estate must first obtain authorization from the Surrogate’s Court.
This authorization is granted through the issuance of letters testamentary — where the authorization is issued to the person named as executor in the decedent’s will — or letters of administration — where the decedent dies intestate and the authorization is issued to administrator of the decedent’s estate.
When letters testamentary or letters of administration are issued, they generally contain limitations on the powers granted: namely, the power to compromise, collect and distribute a settlement from a wrongful death action.
Pursuant to standard procedure, once any wrongful death award is obtained, the Surrogate’s Court is required to review the proposed settlement of the claim to ensure that it is adequate; that the allocation of the settlement is just; and that the distribution of the award is made to the proper parties. This process is known as a compromise proceeding.
Wrongful death awards from the VCF have been treated by the EPTL as equivalent to any other award of damages resulting from a wrongful death action. Because the EPTL did not previously distinguish VCF awards from other wrongful death awards, it was not uncommon that letters used to file a claim with the VCF had been restricted to bringing that action.
Pursuant to EPTL Section 11-4.7e(3), the restrictions contained in letters could be disregarded when a decedent died as a result of his or her 9/11-related injury. This same exception, however, did not extend to situations where a decedent suffered from a 9/11-related injury, but had died from another cause.
Since the filing of a claim with the VCF requires the claimant to waive any future lawsuits relating to the claimant’s injury, where letters restricted a personal representative’s ability to waive such claims, the VCF would not continue processing a claim.
In such situations, the VCF had required that letters be unrestricted, or that the personal representative obtain clarification from the Surrogate’s Court as to the personal representative’s power to do so. Procedurally, obtaining such clarification required that a claimant to apply for amended letters.
The new change to EPTL Section 11-4.7e(3) expands the application of the exception in this section to any victim of a 9/11-injury, regardless of whether the decedent died as a result of the 9/11-injury. Therefore, the VCF may now rely on this section to continue processing all claims, without the claimant’s application to the Surrogate’s Court for unrestricted letters, or an order to clarify the fiduciary’s authority to file the 9/11 claim.
The change made by Chapter 558 of the Laws of 2022 is shown below:
EPTL 11-4.7e(3) Notwithstanding any other provision of law to the contrary, or any restrictions set forth in letters relating to any decedent who dies as a result of wounds or injury incurred as a result of is a victim of the terrorist attacks on September eleventh, two thousand one, a duly appointed personal representative is authorized to file and prosecute a claim with the fund, and the filing of such a claim for an award from the fund, and the resulting compromise of any cause of action pursuant to the act, shall not violate any restriction on the powers granted to the personal representative relating to the prosecution or compromise of any action, the collection of any settlement, or the enforcement of any judgment.
Chapter 557 — Changes to EPTL Section 5-4.6
Prior to the amendments contained in Chapter 557 of the Laws of 2022, all VCF awards of a deceased victim would be subject to a compromise proceeding in the Surrogate’s Court before the proceeds of the award could be distributed to the beneficiaries of a decedent’s estate.
In the compromise proceeding, the Surrogate’s Court would review the award to ensure that a settlement in a cause of action on behalf of the decedent is
adequate, the allocation of the settlement is just, and the distribution is made to the proper parties. When satisfied of all of the foregoing, the Surrogate’s Court would issue an order approving the settlement, collection and distribution of the award.
While there is a strong rationale for this in most standard wrongful death actions, it is unnecessary with respect to VCF awards consisting solely of noneconomic losses. In such cases, the VCF issues a very detailed award breakdown, allocating the award between economic and noneconomic losses.
Noneconomic losses are due to the estate of the decedent, and are distributed pursuant to the decedent’s will or the laws of intestacy. The amount of the award
is determined by a compensation schedule that depends on the type of illness and the severity of the condition.
In recognition of this unique claim process and award determination, the changes to EPTL Section 5-4.6 permit a personal representative to elect a simplified process to request from the Surrogate’s Court the authority to collect the award — akin to collecting a death benefit — and distribute it without a lengthy compromise proceeding. To effectuate this alternative to a compromise proceeding, a personal representative may file a consent to the adequacy of the
award by all interested parties with the Surrogate’s Court.
In practice, the fiduciary will ideally petition the court for amended letters citing the new section, informing the court of the award, and submitting waivers and consents from all interested parties as to the adequacy of the award. The change made by Chapter 557 is shown below:
EPTL 5-4.6 (g): In the case of a recovery of award from the September eleventh victim compensation fund of two thousand one established pursuant to title IV of the federal air transportation safety and system stabilization act, public law 107-42, as amended, where the award consists solely of non economic losses (funeral expense reimbursement being included as noneconomic losses herein) a personal representative may file a consent to the adequacy of the award by all interested parties in lieu of a compromise proceeding.
Takeaways
These new laws have implications for attorneys who handle probate matters, and for attorneys who handle VCF claims.
Probate attorneys will no longer be required to request a compromise proceeding for both wrongful death claims which include only noneconomic, and claims on behalf of deceased individuals who suffered from a 9/11-related illness during their lifetimes, but who died from an unrelated illness.
Probate practitioners who may have clients with claims to the VCF must inquire as to the type of claim, to determine whether these new laws will streamline the probate process.
VCF practitioners will benefit from faster processing of claims and payments. Both noneconomic only wrongful death claims and personal injury claims filed on behalf of deceased individuals will move much faster, by avoiding both compromise proceedings — which can take up to one year to process — and the need for amended letters testamentary or administration.
Vito R. Pitta is a partner and Yan Lian Kuang-Maoga is a senior associate at Pitta & Baione LLP. Disclosure: Yan Lian Kuang-Maoga was involved in drafting the legislation discussed in this article. The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
