Continental Ins. Co. v. McClelland

• Court: New Jersey Superior Court – Appellate Division
• Writing for the Court: VILLANUEVA
• Citation: 288 N.J.Super. 185,672 A.2d 194
• Parties: CONTINENTAL INSURANCE COMPANY, Plaintiff-Respondent, v. Blanche McCLELLAND, Defendant-Appellant.
• Decision Date: 01 March 1996

Page 185

288 N.J.Super. 185 672 A.2d 194 CONTINENTAL INSURANCE COMPANY, Plaintiff-Respondent,
v.
Blanche McCLELLAND, Defendant-Appellant. Superior Court of New Jersey,
Appellate Division. Submitted Jan. 9, 1996.
Decided March 1, 1996.

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Robert A. Auerbach, Morganville, for appellant (Randi S. Greenberg, Piscataway, of counsel and on the brief).

Steven G. Kraus, Watchung, for respondent (Mr. Kraus, of counsel and on the brief).

Before Judges VILLANUEVA and KIMMELMAN.

The opinion of the court was delivered by

VILLANUEVA, J.A.D.

Defendant Blanche McClelland appeals from a partial summary judgment striking her verbal threshold defenses in this statutory subrogation action brought by plaintiff Continental Insurance Company against her to recover workers' compensation payments of $4,079.28 made to and on behalf of Scott McLaughlin as a result of his work-related motor vehicle accident allegedly caused by defendant. The payments represented medical expenses of $1,950.88 and temporary disability[672 A.2d 195] benefits of $2,128.40. The trial court held that McLaughlin's election of the verbal threshold in his own insurance policy did not deprive plaintiff of its right to recover the amounts it had paid to him.

McLaughlin, who was operating his 1984 Subaru in the course of his employment when the accident occurred, did not pursue an action against defendant. His workers' compensation carrier, plaintiff herein, then filed suit against defendant to recoup the

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workers' compensation benefits it had paid to or on behalf of McLaughlin. After hearing cross-motions, the trial court entered an order granting partial summary judgment in favor of plaintiff and striking defendant's five separate defenses of the verbal threshold, N.J.S.A. 39:6A-8(a). The court basically held that plaintiff could recoup the benefits it paid to McLaughlin without being barred by the verbal threshold. The remaining issues concerning liability and damages were resolved by entry of a consent judgment against defendant.

This case concerns the interplay between the workers' compensation lien statutes and the personal injury protection (PIP) statutes. Plaintiff claims that the issue is whether or not the trial court properly found that the lien section of the workers' compensation statutes, N.J.S.A. 34:15-40(f), is unaffected by the collateral source rule, N.J.S.A. 39:6A-6, the evidence bar of N.J.S.A. 39:6A-12, or the verbal threshold statute, N.J.S.A. 39:6A-8, in a situation where workers' compensation payments are made as a result of an automobile accident. We believe that the sole issue is whether McLaughlin's election of the verbal threshold bars his employer's claim for reimbursement pursuant to N.J.S.A. 34:15-40.

N.J.S.A. 39:6A-8(a) authorizes certain defendants to assert a verbal threshold defense. In Beaugard v. Johnson, 281 N.J.Super. 162, 167-168, 656 A.2d 1282 (App.Div.1995), we noted that the test for applicability was two-fold. Initially, it is necessary to examine the status of the defendant and determine whether he or she is entitled under N.J.S.A. 39:6A-4 to receive no-fault PIP benefits. Id. at 167, 656 A.2d 1282; see also Loftus-Smith v. Henry, 286 N.J.Super. 477, 482, 669 A.2d 852, 854 (App.Div.1996). Next, it must be established that the injured person is subject to the verbal threshold and either is required to maintain PIP coverage or has a right to receive PIP benefits. Beaugard v. Johnson, supra, 281 N.J.Super. at 168, 656 A.2d 1282. Here, McLaughlin is...