Harper v. N.J. Mfr.s Cas. Ins. Co.

• Decision Date: 09 April 1948
• Citation: 58 A.2d 792
• Parties: HARPER v. NEW JERSEY MANUFACTURERS CASUALTY INS. CO.
• Court: New Jersey Circuit Court

58 A.2d 792

HARPER

v.NEW JERSEY MANUFACTURERS CASUALTY INS. CO.

Circuit Court of New Jersey, Mercer County.

April 9, 1948.

Action by Harry C. Harper, Commissioner of Labor of the State of New Jersey, against the New Jersey Manufacturers Casualty Insurance Company for contributions to Workmen's Compensation Fund.

Judgment for defendant.

Walter D. Van Riper, Atty. Gen., and Grace J. Ford, Asst. Deputy Atty. Gen., for plaintiff.

George E. Meredith, of Trenton, for defendant.

SMALLEY, Judge.

This action was tried without a jury in accordance with application made and stipulations filed.

Suit is brought by the plaintiff to recover from the defendant, the sum of $7,229.54.

Plaintiff claims that this sum is due from the defendant, pursuant to R.S. 34:15-94, N.J.S.A.

‘R.S. 34:15-94, N.J.S.A. Payments to Commissioner of Labor; amount of fund. Each mutual association or stock company writing compensation or employers' liability insurance in this State, and each self-insurer, shall annually, on or before March first in each year, pay to the Commissioner of Labor a sum equal to one per centum (1%) of the total compensation paid out by such mutual association, stock company or self-insurer during the calendar year next preceding the due date of such payment. Such sum shall be paid by the Commissioner of Labor to the State Treasurer.

‘When the total amount of all such payments into the fund, together with the accumulated interest thereon, equals or exceeds one and one-half million dollars ($1,500,000.00), no further contributions to said fund shall be required to be made; but whenever, thereafter, the amount of such sum shall be reduced below one and one-half million dollars ($1,500,000.00) by reason of payments out of such funds pursuant to section 34:15-95 of this Title, then such contributions to such fund shall be resumed forthwith, and shall continue until such sum shall again amount to one and one-half million dollars ($1,500,000.00), together with accumulated interest thereon’.

The condition of the fund on hand being less than $1,500,000.00 makes the payments as required under the statute due and owing.

Plaintiff is the Commissioner of Labor of the State of New Jersey, and the person designated by R.S. 34:15-94, N.J.S.A., to receive these payments.

Plaintiff now seeks to recover from the defendant, one per cent of the total compensation paid by the defendant company during the calendar year of 1945.

Defendant is a mutual association organized and existing under, and by virtue of the laws of the State of New Jersey, writing compensation for employers' liability insurance in this State, and is therefore required to pay to the plaintiff the sum equal to one per cent of the total compensation paid out by it during the calendar year of 1945, on or before the first day of March, 1946.

R.S. 34:15-13, N.J.S.A., provides for the payment by the carrier of funeral expenses.

R.S. 34:15-15, N.J.S.A., provides for the payment by the carrier of medical expenses.

Defendant admits that it has paid out, pursuant to R.S. 34:15-1 et seq., N.J.S.A., the amount of $2,797,802.74, inclusive of the amount for medical aid and funeral expenses, for the calendar year of 1945. Defendant has paid to the plaintiff the sum of $20,056.84, but refuses to pay to the plaintiff one per cent of the medical and funeral expenses, which amounts form the basis of this suit, it being defendant's contention that medical aid and funeral expenses are no part of ‘total compensation paid out’.

There is no dispute as to these facts. The real issue is; does the term ‘total compensation paid out’ as set forth in R.S. 34:15-94, N.J.S.A., include medical and funeral expenses. If it does, the plaintiff is entitled to judgment for the amount as claimed. If the answer to the question is in the negative, there must be judgment for the defendant and against the plaintiff of no cause of action.

This ‘one per cent fund’ was constituted by the legislature to provide aid to ‘persons totally disabled, as a result of experiencing a subsequent permanent injury under conditions entitling such persons to compensations therefor, when such persons had previously been permanently and partially disabled from some other cause’. R.S. 34:15-95, N.J.S.A. To provide a fund for this purpose, the legislature required insurance carriers to pay to the Commissioners of Labor, ‘a sum equal to one per centum (1%) of the total compensation paid out’.

The parties, during the time of trial, recognizing the difficulty of presenting proof of payment to each and every individual receiving medical aid, stipulated the following: ‘For the limited purpose of agreeing on a figure to guide the Court in the event that it decides that medical and funeral expenses are included in the term, ‘total compensation’, as stated in R.S. 34:15-94 [N.J.S.A.] so as to make such payments subject to an assessment of one per centum (1%), the Defendant stipulates the amount of $717,703.84 as the total of its medical expenses paid out in the calendar year 1945, and $5,250.00 as the total of its funeral expenses paid out in the same year'. This stipulation, as entered, for the first time makes this matter one of statutory interpretation.

The legislature, in the year 1923, first established this ‘one per cent fund’, or ‘second injury fund’. There were amendments by the legislature in 1931, 1936, 1938 and in 1945, but the pertinent phrase involved in this litigation namely, ‘* * * a sum equal to one per centum (1%) of the total compensation paid out’, has remained constant and unchanged up until the present time.

In 1945 the legislature removed the ceiling of $200,000.00 and increased the amount in this fund to $1,500,000. It did not change the language as to the basis of calculation that the carriers or self insurers were to use when required to make payments to the Commissioner of Labor.

Beginning in 1923 and up and until 1946, all personnel in authority connected with the Department of Labor never construed this assessment to include payments for medical aid and funeral expenses.

For the first time, in 1946 demand was made for this additional assessment based on the expenditure made by the defendant for medical and funeral expenses. What is it that has caused this change of position by those assigned to the plaintiff's office? It can not be fairly said that it was the action of the legislature in the year 1945, because, the only pertinent change was to increase the amount of the fund. No change in the language of the Act since its inception can therefore be the moving cause.

Plaintiff contends that the term ‘compensation’, under the Act, includes medical and funeral expenses and that our courts have heretofore so determined this question. R. pages 95 and 96. In support of this contention, plaintiff cites Grief v. Betsy Ross Ice Cream Co., 20 A.2d 597, 19 N.J.Misc. 397, affirmed 127 N.J.L. 323, 22 A.2d 571. In the Pleas the Court said, 20 A.2d at page 599, 19 N.J.Misc. at page 400:

‘It is the opinion of this court that the rendition of medical treatment is an integral part of the humane intention of the legislature to give to employees the protection required under the exigencies. Medical treatment is as much a part of the compensation as the monetary award and a contrary interpretation would be inimicable to the whole theory of this social legislation.’

In the Supreme Court opinion (127 N.J.L. at page 324, 22 A.2d 571, 572) it was said:

‘We think the following words of the statute are significant: ‘Any payment made in accordance with the provisions of Article...