Court says Margaret Cruz can claim portion of compensation payout to late lover’s brother
A state appeals court in Brooklyn unanimously ruled on May 2 that the surviving lesbian partner of a 9/11 victim can sue the victim’s brother, who is refusing to share benefits paid out by the Federal September 11 Victim Compensation Fund.
The opinion for the court by Justice Anita Florio approved a ruling from 2004 by Kings County Supreme Court Justice Yvonne Lewis that refused to dismiss Margaret Cruz’s lawsuit against James McAneney, the brother of Patricia McAneney, Margaret’s partner who lost her life that day.
Shortly after the terrorist attacks, Congress established the Federal September 11 Victim Compensation Fund, which was intended to shield the airlines and others who might be sued by substituting a statutory compensation scheme. Individuals personally injured could file claims, as well as surviving family members who could demonstrate economic loss. The Fund was also intended to relieve those who might be able to sue for wrongful death from having to bring those lawsuits and prove negligence in order to be compensated. In exchange for the promise not to sue, the victims and survivors would receive guaranteed compensation intended to approximate the damages that could be awarded in a wrongful death lawsuit.
A Special Master, Kenneth Feinberg, was appointed to administer the Fund. Feinberg quickly announced that he would accept information about unmarried partners of victims in determining how much compensation to award, but he was bound by statutory language to pay out compensation only to a victim or the victim’s personal representative. In the case of somebody who had a will, a personal representative could be the executor under the will. In the absence of a will, the personal representative could be a family member who would have been entitled to sue on behalf of the victim’s intestate estate.
James McAneney filed for compensation from the Fund, submitting information indicating that his sister was unmarried. The Special Master calculated an award of $278,087.42, taking into account Patricia’s pain and suffering and the economic loss to her survivors, analogous to what would be awarded in a wrongful death lawsuit, calculated based on a single person living alone with no dependents.
While McAneney’s claim was pending, Cruz, a Rockland County resident, submitted an application to the Fund, documenting her 15-year domestic partnership with Patricia. In response, the Special Master increased the award by $253,454, to a total of $531,541.42, but, Cruz claims in her lawsuit, she was told that the amount would have to be paid out to James, who was then under an obligation to distribute it in compliance with state law, as required by the federal statute. However, the Special Master took the position that he could not directly order McAneney to pay anything to Cruz.
Cruz attempted to negotiate an agreement with McAneney, to no avail, as he insisted on keeping the entire amount. She claims she had been told that the Fund would not pay out the money to McAneney until she had reached an agreement with him, but Feinberg had to wind up the work of his office and ended up paying out the money to the surviving brother without any agreement to share it with his sister’s partner. Cruz says she was advised by Feinberg’s office to sue for her share in state court.
As soon as she filed suit, however, McAneney filed a motion to dismiss, claiming that Cruz was entitled to nothing. Justice Lewis denied that motion on July 2, 2004, and McAneney appealed. The Appellate Division in Brooklyn heard the appeal on May 26, 2005, so Cruz has been waiting for this ruling for almost a year since the arguments.
Cruz’s lawyers, Jeffrey Trachtman, Kerri Ann Law, and Eric Shimanoff, from the firm of Kramer Levin Naftalis & Frankel, argued three different theories in support of her claim. First, they claimed that as a surviving domestic partner Cruz was entitled either to the full award or a portion of it, and that McAneney as personal representative of his late sister Patricia had a fiduciary duty to distribute the money to her. Alternatively, Cruz claimed that the court could impose what is called a “constructive trust” over the money, finding that it had been paid out to McAneney in trust for her, so that his duty would be to pay it over to her as the beneficiary of the trust. A third theory, unjust enrichment, was based on the legal concept that somebody who is enriched at the expense of somebody else must pay the other party if the interests of justice require that. Here, Cruz argued, it would be unjust for McAneney to retain the entire compensatory award, when it was increased specifically based on her evidence about her partnership with Patricia.
None of these theories, in their most traditional applications, would necessarily apply to this case, but the court found that all of them might serve. Perhaps the most important argument supporting Cruz’s claim was that the funds were supposed to be distributed by the personal representative in a manner consistent with state law. New York State reacted to September 11 by taking steps to protect the interests of surviving domestic partners of victims, both by interpreting coverage under the state’s Crime Victim Compensation Fund to apply to domestic partners and by amending the Workers Compensation Statute to add a special 9/11 provision authorizing compensation for surviving partners of those who lost their lives at work that day.
Justice Florio found that Feinberg’s action in increasing the award on the basis of Cruz’s submission about her relationship with Patricia supported her claim that the money was, in a sense, intended for her. And she rejected McAneney’s argument that he was shielded by a provision that protects the personal representative from liability for how he distributes the money in good faith, questioning his good faith under the circumstances in refusing to share the award with Cruz.
This decision does not end the case; it is merely a ruling on McAneney’s pretrial motion for dismissal. Having determined that there are viable legal theories supporting Cruz’s claim, the court sent the case back to Supreme Court in Brooklyn to give her a chance to provide the necessary proof of her relationship with Patricia McAneney and to give the trial court the first crack at the question of how much of the award she is entitled to receive.
The court’s opinion leaves open the possibility that Cruz might be entitled to all of it, or at least to the amount by which Feinberg increased the award in response to her information.
At this point, however, the handwriting is on the wall. Given the procedural stage of the case, it is unlikely that the Court of Appeals would agree to review this ruling prior to a trial, so the incentive is strong for McAneney to settle rather than risk losing the entire award.