Fireman's Fund Indem. Co. v. Batts, A--765

• Decision Date: 16 January 1951
• Docket Number: No. A--765,A--765
• Citation: 78 A.2d 293,11 N.J.Super. 242
• Parties: FIREMAN'S FUND INDEMNITY CO. et al. v. BATTS et al.
• Court: New Jersey Superior Court — Appellate Division

Page 242

11 N.J.Super. 242

78 A.2d 293

FIREMAN'S FUND INDEMNITY CO. et al. v. BATTS et al.

No. A--765.

Superior Court of New Jersey, Appellate Division.

Argued Jan. 2, 1951.

Decided Jan. 16, 1951.

Leo Rosenblum, Jersey City, argued the cause for the appellant Harry D. Batts (Jacob J. Levey, Jersey City, attorney).

Arthur F. Mead, Newark, argued the cause for the respondent New Amsterdam Casualty Co. (Cox & Walburg, Newark, attorneys).

Before Judges JACOBS, EASTWOOD and BIGELOW.

The opinion of the court was delivered by

JACOBS, S.J.A.D.

The appellant Harry D. Batts appeals from a judgment entered in the Chancery Division pursuant to the opinion of Judge Stanton reported in 8 N.J.Super. 519, 73 A.2d 640 (1950).

While employed by William Laubenheimer & Bros., Inc., Batts was injured and received compensation and medical expenses aggregating $8,778.25 from New Amsterdam Casualty Company, the employer's compensation insurance carrier. Batts instituted a common law action against third parties whose negligence caused his injury and recovered judgment of $48,000. After its affirmance on appeal (Batts v. Joseph Newman, Inc., 3 N.J. 503, 71 A.2d 121 (1950) Fireman's Fund Indemnity Company was prepared to pay the judgment and interest, but a dispute arose as to the amount payable therefrom to New Amsterdam which claimed that it was entitled to full reimbursement of the sum of $8,778.25 plus interest thereon from the date of the judgment. On the other hand, Batts claimed that New Amsterdam should be reimbursed only to the extent of two-thirds of its expenditure of $8,778.25, without any interest, the remaining one-third to be paid to his attorney who had prosecuted his third-party action to judgment. The lower court in an interpleader action instituted by Fireman's Fund sustained the claim of New Amsterdam and entered judgment accordingly.

The original Workmen's Compensation Act (P.L. 1911, c. 95, p. 144) permitted the injured employee to retain his full compensation plus the entire amount recovered by him in a third party negligence action. To correct this situation the act was amended in 1913 to provide for appropriate reimbursement to the employer in the event of such double recovery. P.L. 1913, c. 174, p. 312. See also P.L. 1919, c. 93, p. 212; P.L. 1931, c. 279, p. 705; Henry Steers, Inc., v. Turner, &c., Co., 104 N.J.L. 189, 195, 139 A. 42 (E. & A. 1927); United States Casualty Co. v. Hercules Powder Co., 4 N.J. 157, 163, 72 A.2d 190 (1950). However, as judicially construed, this statutory provision required the employee to make full reimbursement from the gross recovery against the third party even though the reimbursement exceeded the net amount actually received by the employee after having deducted his expense of litigation. Deuchar v. Standard Accident Insurance Co., 117 N.J.L. 375, 189 A. 61 (E. & A. 1937). It was largely to obviate this injustice that the provision was revised in P.L. 1936, c. 162, now R.S. 34:15--40, N.J.S.A. See Savitt v. L. & F. Construction Co., 124 N.J.L. 173, 174, 10 A.2d 728 (E. & A. 1940); McClare v. Tasty Baking Co., 127 N.J.L. 492, 494, 23 A.2d 275 (Sup.Ct. 1941), affirmed 129 N.J.L. 98, 28 A.2d 118 (E. & A. 1942); Werthman v. Prudential Ins. Co., 22 A.2d 197, 19 N.J.Misc. 604, 606 (C.P. 1941).

In the instant matter we are not concerned with the statutory language which governs situations where the employee's net recovery from the third party, after payment of expenses of suit and attorney's fee, is less than the compensation due him under the Workmen's Compensation Act. It is conceded that the appellant's net recovery under the judgment far exceeded the claim of reimbursement and as we read the express terms of R.S. 34:15--40, N.J.S.A.,...