Liberty Insurance Corporation is suing a New York law firm and its client, claiming they failed to pay a $185,000 workers’ comp lien after a $2.5 million settlement.
Liberty Insurance Corporation (LIC), a stock insurance company organized under Illinois law and based in Boston, filed its complaint on August 7, 2025, in the United States District Court for the Eastern District of New York. The lawsuit names Kazmierczuk & McGrath, a law partnership, its partners Katherine Marie McGrath and Joseph John Kazmierczuk, and their client Jonathan Patino as defendants.
According to the complaint, Patino was injured on October 26, 2017, while working for E.E. Cruz & Company, Inc. at the 121st Street J Subway line in Queens, New York. Patino, represented by Kazmierczuk & McGrath, McGrath, and Kazmierczuk, filed a personal injury lawsuit in March 2018 against the New York City Transit Authority, Metropolitan Transportation Authority, and the City of New York.
LIC had issued a Workers Compensation and Employers Liability Insurance Policy (No. WC7-61D-260986-017) to E.E. Cruz & Company, Inc., covering June 1, 2017 to June 1, 2018. The policy included a clause stating: “We have your rights, and the rights of persons entitled to the benefits of this insurance, to recover our payments from anyone liable for the injury. You will do everything necessary to protect those rights for us and to help us enforce them.”
Patino submitted a workers’ compensation claim for the October 26, 2017 accident, which LIC paid under the Cruz WC Policy. LIC alleges it sent multiple letters to Kazmierczuk & McGrath between May 7, 2019, and February 8, 2021, asserting its lien on any recovery in the Patino Action based on its payment of Patino’s workers’ compensation claim.
The complaint states that in October 2024, Patino’s lawsuit was settled for $2,500,000. On October 10, 2024, Patino, Kazmierczuk & McGrath, and LIC entered into a Consent Agreement. The agreement stated that LIC had a statutory workers’ compensation lien of $207,541.45 and agreed to accept $185,000 in satisfaction of its lien, provided Patino permanently closed his workers’ compensation claim. The agreement outlined that $22,541.45 would be held in escrow by Patino’s counsel pending approval of a Section 32 settlement by the New York State Workers’ Compensation Board.
The Workers’ Compensation Board approved the waiver agreement on February 5, 2025. LIC alleges that despite this approval and repeated requests, only $75,000 was paid toward the lien, leaving $110,000 due and owing. The complaint details several communications from LIC to Kazmierczuk & McGrath between February and May 2025, with Kazmierczuk reportedly assuring LIC that payment was being arranged. On July 7, 2025, Kazmierczuk & McGrath made a payment of $75,000, but LIC claims the remaining $110,000 was not paid.
LIC is seeking judgment against Kazmierczuk & McGrath, McGrath, Kazmierczuk, and Patino for $110,000, plus interest and costs, based on violation of its statutory lien and breach of contract under the Consent Agreement.
These are allegations from Liberty Insurance Corporation’s complaint, not established facts. The defendants have not yet responded in court, and the case is in its early stages. For insurance professionals, the dispute underscores the importance of following through on lien agreements and settlement terms when multiple parties and large sums are involved.
As the case progresses, insurance industry readers will be watching for how the court addresses the insurer.
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