Here is a blackletter rule:  You must obtain consent from the Worker’s Compensation carrier before settling a personal injury action in which there was WC payments.  If you don’t, the WC carrier takes a ‘vacation" and the plaintiff stops getting money.  Easy, No?

in Flaherty v Attie ;2009 NY Slip Op 51296(U) ; Supreme Court, Queens County ; Markey, J. we see what happens.  Our guess is that plaintiff stopped getting paid a few months after settling the case. but the decision does not supply this detail.  Plaintiffs sue their attorney, and lose on statute of limitations grounds.
 

"[P]laintiffs commenced their action against defendant to recover damages for, inter alia, legal malpractice and fraudulent concealment. Plaintiffs allege that, in 1998, they retained the legal services of defendant to represent them in an underlying personal injury suit. The injury allegedly sustained by plaintiff John J. Flaherty (Flaherty) occurred during the course of his employment. On December 24, 1998, a retainer agreement was signed, and defendant filed a summons and complaint on March 26, 1999 in connection with the underlying accident. During the pendency of that action, Flaherty was receiving workers’ compensation benefits, said benefits creating a lien against plaintiffs and their potential recovery.  [D]efendant Attie had failed to obtain pre-settlement consent from the workers’ compensation carrier and/or the New York State Insurance Fund and/or plaintiff’s [*3]employer, which ultimately negatively affected plaintiffs’ right to future workers’ compensation benefits; and failure to obtain such clearance, approval, or consent constituted legal malpractice. Plaintiffs, furthermore, allege that defendant’s failure to disclose this to plaintiffs was an attempt by defendant to fraudulently conceal any alleged malpractice.
 

In or about 2006, plaintiffs contacted defendant Attie with regard to the above circumstances. Plaintiffs allege that from 2006 until May of 2008, a new attorney-client relationship was formed by defendant Attie undertaking the responsibility to seek nunc pro tunc consent and approval of the settlement. Plaintiffs contend that, in so doing, defendant Attie made affirmative representations to plaintiffs that he would and could secure such consent and approval and, that, in May 2008, defendant Attie acknowledged to plaintiffs that he failed to seek nunc pro tunc consent to the settlement during this time. Plaintiffs claim that the above constituted a second instance of legal malpractice, as well as fraudulent concealment, by making affirmative representations that defendant Attie could do that which he could not, and by, again, failing to disclose to plaintiffs the malpractice which he had allegedly committed in 2001. Plaintiffs then filed the subject suit on December 18, 2008.

On the contrary, plaintiffs improperly attempt to convert defendant’s alleged failure to obtain pre-settlement consent — a negligent act — into an active, ongoing, concealment. However, failure to disclose the wrongdoing is insufficient to invoke this "uncommon remedy," which requires fraudulent behavior (Ross, 8 NY3d at 491; see also, Zumpano, 6 NY3d at 675; Weiss v Manfredi, 83 NY2d 974, 977 [1994]; Ferdinand v Crecca & Blair, 5 AD3d 538, lv. to appeal denied, 5 NY3d 710 [2004]). Based on the above, plaintiffs failed to show that they were prevented from bringing suit due to their justifiable reliance on some intentional [*5]misrepresentation made by defendant after his alleged failure to obtain pre-settlement consent (see, Bevinetto, 51 AD3d at 614). The fact that defendant claimed on the closing statement that there were no "medical liens" does not rise to the level of wrongfully inducing plaintiffs not to file suit; rather, this speaks to the alleged malpractice about which plaintiffs are complaining. By plaintiffs’ own admission, they had no contact whatsoever with defendant until sometime in 2006. Notably, then, there is no evidence of any type of ongoing misrepresentation made to plaintiffs for an approximate five-year period (see, e.g., Melnitzky v Hollander, 16 AD3d 192 [1st Dept.], lv. to appeal denied, 5 NY3d 710 [2005]). "