In a decision that may expand tort protections for some third parties to a contract, a state appeals court has ruled that a truck repair company owed a duty of care to a third-party garbage collector who was killed when a truck lurched backward and crushed him.

An Appellate Division, Second Department, panel also decided to reduce the total damages awarded to the estate and the son of the killed worker, Ivan Hernandez-Morales, from $7.2 million to $3.2 million. The reduction included slashing pre-impact terror damages from $1 million to $250,000.

The panel gave the plaintiffs the choice of holding a new trial on damages, instead of accepting the dramatically lower damages it set out. But in an interview Monday, plaintiffs lawyer Paul Edelstein said his clients will accept the lower damages and bypass a new trial.

Meanwhile, he emphasized that the ruling on liability was potentially groundbreaking.

“We're going to accept the damages reduction because this [appellate] part of the case was never really about the amount of money. It was really about challenging the Espinal [case law] doctrine [on liability for third parties to a contract],” said Edelstein, of the Edelsteins, Faegenburg & Brown law firm in Manhattan.

“We're thrilled about the decision,” he added. “This decision expands the Espinal doctrine, to some degree, and provides an avenue of recovery for the injured worker. It's an extremely important decision in that respect. It will get cited over and over and over again in New York.”

Hernandez-Morales was a helper on a private garbage truck owned by his employer, Crown Container Co. In 2007, he was killed as he collected cardboard boxes from dumpsters for Crown's commercial customers in Flushing, Queens, said the panel's opinion and appellate briefs filed by parties to the lawsuit.

As Hernandez-Morales, then 22, stood behind the truck, driver Ashim Ali pulled a handle that throttled the engine and, suddenly, the truck lurched backward. The truck crushed Hernandez-Morales against a dumpster, said the panel and briefs.

Hernandez-Morales' estate, and his then-infant son, via the son's mother, launched a 2008 personal injury and wrongful death lawsuit in which they sued Crown Container, Ali and Advanced Fleet Maintenance Inc., a repair company that had serviced the truck.

At the 2013 trial, evidence indicated that Advanced Fleet Maintenance Inc. had serviced the truck six months before the incident but allowed it back onto the streets without the required functioning neutral interlock system, the panel wrote. The interlock system may have prevented the truck from lurching backward, evidence showed.

The jury found Crown Container 49.5 percent at fault for the accident, Advanced Fleet Maintenance 49.5 percent at fault and Ali one percent at fault.

On damages, jurors awarded the plaintiffs $1 million for Hernandez-Morales' pre-impact terror; $1 million for his conscious pain and suffering; $2 million for past pecuniary loss, meaning past loss of parental guidance to the son; $1 million for future pecuniary loss, meaning future loss of parental guidance; $1.04 million (over 16 years) for Hernandez-Morales' future lost income; and $168,000 for his past lost income.

Ultimately, the estate and son of Hernandez-Morales settled with both Crown Container and Ali, but not with Advanced Fleet Maintenance, Edelstein said Monday.

Advanced Fleet Maintenance appealed the jury's verdict on liability grounds, while citing Espinal v. Melville Snow Contrs., 98 NY2d 136 (Court of Appeals 2002), and it appealed some of the damages awards as against the weight of the evidence or excessive. In a Nov. 22 opinion in Pedro Vargas, as administrator of the estate, v. Crown Container Co., 12520/08, a unanimous Second Department panel upheld the jury's verdict on liability, but ruled against the amounts of damages granted for pre-impact terror, conscious pain and suffering, past pecuniary loss and future pecuniary loss.

In addressing Advanced Fleet's liability to Hernandez-Morales, the panel pointed out that the repair company's central argument, which it didn't raise until a posttrial motion, focused on the fact that the truck servicing contract was made between Crown Container and Advanced Fleet and that, therefore, “pursuant to the principles enunciated in Espinal” no duty of care ran to Hernandez-Morales. He was an employee of Crown Container, not part of the contract and was a third party to it.

But the panel wrote that “the record demonstrates that Advanced owed the decedent [Hernandez-Morales] a duty as a third-party beneficiary of its contractual relationship between itself and CCC [Crown Container],” while citing Espinal and Filer v. Keystone Corp., 128 AD3d 1323.

“Although there was no written contract … an intent to confer a direct benefit on the decedent may also be inferred from the circumstances, including the parties' oral agreement and course of conduct,” the panel wrote, citing Encore Lake Grove Homeowners Assn., Inc. v. Cashin Assoc., P.C., 111 AD3d 881 and Mitchell v. Long Acre Hotel, 147 AD3d 567.

“The evidence indicated that Advance and CCC recognized that the neutral interlock system was an important safety feature,” the panel also said. “Further, it is clear from the record that Advance and CCC recognized that this safety feature's primary benefit was to CCC's employees who loaded the garbage trucks.”

The justices noted that “an employee is not automatically a third-party beneficiary of a service contract between his or her employer and another party. However, if the employer's intent was to benefit its employees, third-party beneficiary status may be inferred.” It cited, in part, Encore Lake Grove Homeowners Assn., Inc. v. Cahsin Assoc., P.C., 111 AD3d at 882 and All Am. Moving & Stor. v. Andrews, 96 AD3d 674, 675.

Regarding damages, the panel, consisting of Justices Mark Dillon, Leonard Austin, Sylvia Hinds-Radix and Hector LaSalle, noted first that “plaintiffs correctly concede that the awards for pre-impact terror, conscious pain and suffering, past pecuniary loss, and future pecuniary loss were excessive.”

Pointing specifically to pre-impact terror, the panel reduced the award from $1 million to $250,000 and wrote that “the plaintiffs' expert engineer testified that it would have taken less than a second for the truck to strike the decedent after it started moving in reverse.” They further noted that “in the medical expert's opinion, it took approximately one or two minutes for the decedent to die from his internal injuries.”

The panel said little about its reduction of the pecuniary loss amounts but did write that Hernandez-Morales “worked two jobs to support his family—one as a helper on a garbage truck and one in his parents' bodega—and he had an infant son who was 1 year old at the time of his death.

“Awards of $650,000 for past pecuniary loss and $350,000 for future pecuniary loss would be reasonable compensation for the child's loss,” the panel said.

Edelstein said Monday that his clients had “challenged the Espinal doctrine and attempted to expand responsibility for injuries to third-party contractors” and were “thrilled” with the result.

But he “completely disagreed with the reduction on pecuniary loss damages,” he said.

The decision “literally reads, in my opinion, like the appellate division got a number [it wanted to award], and worked backwards” in its decision.

Matthew Naparty, a partner at Mauro Lilling Naparty in Woodbury, New York, represented Advanced Fleet and could not be reached for comment.