Bello v. Commissioner of Dept. of Labor and Industry

• Decision Date: 22 July 1969
• Citation: 106 N.J.Super. 405,256 A.2d 63
• Parties: James A. BELLO, Petitioner-Respondent, v. COMMISSIONER OF the DEPARTMENT OF LABOR AND INDUSTRY, As Trustee of the TwoPer Cent Fund, Respondent-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 405

106 N.J.Super. 405

256 A.2d 63

James A. BELLO, Petitioner-Respondent, v. COMMISSIONER OF the DEPARTMENT OF LABOR AND INDUSTRY, As Trustee of the TwoPer Cent Fund, Respondent-Appellant.

Superior Court of New Jersey Appellate Division.

Argued March 24, 1969.

Decided July 22, 1969.

Stephen Skillman, Deputy Atty. Gen., for appellant (Arthur J. Sills, Atty. Gen., attorney).

Seymour B. Jacobs, Newark, for respondent (Balk Jacobs, Goldberger & Mandell, Newark, attorneys).

Before Judges GAULKIN, COLLESTER and LABRECQUE.

The opinion of the court was delivered by

LABRECQUE, J.A.D.

The Commissioner of the Department of Labor and Industry (Commissioner), as trustee of the Two Per Cent Fund also known as the Second Injury Fund (Fund), appeals from a judgment of the Essex County Court denying the Fund credit, in its computation of the benefits due petitioner James A. Bello for monies received in settlement of his third-party claim.

In July 1959 Bello filed a petition in the Division of Workmen's Compensation against his employer, Goodyear Tire and Rubber Company claiming compensation benefits for disability sustained by reason of his having contracted an occupational disease and developed systemic poisoning due to the inhalation and ingestion of harmful dusts and gases. On October 24, 1961 a stipulation was entered providing for payment by Goodyear of a sum equal to 25% Of partial permanent disability, or 137 1/2 weeks at $35 per week totalling $4,812.50 for petitioner's work connected injuries.

Thereafter petitioner obtained a third-party recovery (by way of a settlement) against Public Service Coordinated Transport in the sum of $30,000. Following this the petition in the Division of Workmen's Compensation was amended to include a claim for benefits under the One Per Cent (now Two Per Cent) Fund. N.J.S.A. 34:15--95.1. The judge of compensation found that petitioner had suffered a toxic encephalopathy as the result of inhaling harmful fumes and gases while on the job, by reason of which he was permanently disabled to the extent of 75% Of total. The permanent disability was found to b neurological and neuropsychiatric in nature. He further found that petitioner prior to his employment with respondent, had been disabled to the extent of 25% Of total permanent by reason of a number of noncompensable preexisting pathological conditions including a respiratory condition in the nature of a chronic bronchitis and cardiovascular disability in the nature of arteriosclerotic heart diseas with coronary insufficiency. Petitioner was found to be totally and permanently disabled as a result of the combination of the two and was awarded $13,500 for his 75% Work connected disability on account of which his employer was held to be entitled to a credit on the basis of petitioner's third-party recovery.

On the issue of whether the Fund was also entitled to credit out of the third-party recovery, the judge of compensation, in an advisory report to the Commissioner, held that it was and recommended that the benefits allowed Bello from the fund be restricted to $13.33 per week until such time as the balance of the third-party award was expended, and thereafter be increased to the full rate of $40 per week. When, despite Bello's exceptions, these recommendations were adopted by the Commissioner, petitioner appealed to the County Court where the Commissioner's action was reversed. The present appeal followed.

The issue is one of novel impression. Decisions of our sister states are at variance. See Cole v. Morris, 409 S.W.2d 668 (Mo.Sup.Ct.1966) (holding Missouri's Second Injury Fund entitled to be subrogated to the workman's right to recover in the third-party action). Compare Orth v. Shiely Petter Crushed Stone Company, 253 Minn. 142, 91 N.W.2d 463 (Sup.Ct.1958) denying subrogation to special compensation fund in the absence of specific statutory authorization).

N.J.S.A. 34:15--40 preserves the right of an employee to sue a third-party tortfeasor, notwithstanding that the injuries for which he seeks recovery are also compensable. It provides, however, that:

'(a) The obligation of the employer or his insurance carrier under this statute to make compensation payments shall continue under the payment, if any, by such third person or his insurance carrier is made.

(b) If the sum recovered by the employee or his dependents from the third person or his insurance carrier is equivalent to or greater than the liability of the employer or his insurance carrier under this statute, the employer or his insurance carrier shall be released from such liability and shall be entitled to be reimbursed, as hereinafter provided, for the medical expenses incurred and compensation payments theretofore paid to the injured employee or his dependents less employee's expenses of suit and attorney's fee as hereinafter defined.

(c) If the sum recovered by the employee or his dependents as aforesaid is less than the liability of the employer or his insurance carrier under this statute, the employer or his insurance carrier shall be liable for the difference, plus the employee's expenses of suit and attorney's fee as hereinafter defined, and shall be entitled to be reimbursed, as hereinafter provided for so much of the medical expenses incurred and compensation payments theretofore paid to the injured employee or his dependents as exceeds the amount of such difference plus such employee's expenses of suit and attorney's fee.'

In the event that the employee fails to bring a third-party action within one year of the accident, his employer or its insurance carrier may do so under certain conditions. L.1931, c. 279, now N.J.S.A. 34:15--40(f).

Benefits under the One Per Cent Fund were first made available by L.1923, c. 81. At the time of the occurrence of Bello's work-connected disability the statute as amended, N.J.S.A. 34:15--95, provided for payment of benefits out of the Fund to 'persons totally disabled, as a result of experiencing a subsequent permanent injury under conditions entitling such persons to compensation therefor, when such persons had previously been permanently and partially disabled from some other cause; * * *.' It provided, however, that no person would be eligible for benefits:

'(a) If the disability resulting from the injury caused by his last compensable accident in itself and irrespective of any previous condition or disability constitutes total and permanent disability within the meaning of this Title.

(b) If permanent total disability results from the aggravation, activation or acceleration, by the last compensable injury, of a pre-existing noncompensable disease or condition.

(c) If the disease or condition existing prior to the last compensable accident is not aggravated or accelerated but is in itself progressive and by reason of such progression subsequent to the last compensable accident renders him totally disabled within the meaning of this Title.

(d) if a person who is rendered permanently partially disabled by the last compensable injury subsequently becomes permanently totally disabled by reason of progressive physical deterioration or pre-existing condition or disease.'

It further provided that nothing in the foregoing provisions was to be construed to deny benefits to any person who had been previously disabled by reason of total loss of, or total and permanent loss of use of, a hand or arm or foot or leg or eye, when the total disability was due to the total loss of, or total and permanent loss of use of, two or more of said major members of the body, or to any person who in successive accidents had suffered compensable injuries, each of which, severally, caused permanent partial disability, but which in conjunction resulted in permanent total disability.

In holding that the Fund was not entitled to credit on account of Bello's third-party recovery, the judge of the County Court adopted a strict construction of N.J.S.A. 34:15--40. See Standard Surety & Casualty Co. v. Murphy, 129 N.J.Eq. 284, 288, 19 A.2d 229 (E. & A. 1941). Appellant urges that this was error and that the statute is to be liberally construed to further the purposes of its enactment. Henry Steers, Inc. v. Turner, &c., Co., 104 N.J.L. 189, 185, 139 A. 42 (E. & A. 1927). We are satisfied that whatever may be the 'rule' of construction, it is subordinate to the goal of effectuating the legislative plan, as it may be gathered from the enactment when read in the full light of its history, purpose and context. State v. Gill, 47 N.J. 441, 444, 221 A.2d 521 (1966). It is not the words of the law but the internal sense of it that makes the law. Caputo v. Best Foods, Inc., 17 N.J. 259, 264, 11 A.2d 261 (1955). The motive which led to its enactment is one of the most certain means of establishing the true meaning of the words used. Ibid.

Here the legislative purpose appears quite clear. Prior to the enactment of the statute permitting reimbursement, an employee sustaining a work-connected disability by reason of a third party's negligence could recover and retain both workmen's compensation benefits from his employer and damages from the culpable third party. Newark Paving Co. v. Klotz, 85 N.J.L. 432, 91 A. 91 (Sup.Ct.1914), affirmed o.b. 86 N.J.L. 690, 92 A. 1086 (E. & A. 1914). In Newark Paving Co. it was held (at p. 434, 91 A. 91) that the right to compensation and the right to recover against a tortfeasor were of so different a character that the employer had no right of subrogation to the employee's claim against the tortfeasor. The statute was intended to correct this or, was said in New Amsterdam Casualty Co. v. Popovich, 18 N.J. 218, 226, 113 A.2d 666, 670 (1955), 'to meet a mischief where an injured employee could retain both the compensation payments and full damages from his common law right of action against a third party.' By it the Legislature intended to set up a comprehensive plan for regulating the rights and responsibilities of...