Lambert v. Travelers Indem. Co. of Am.
| Decision Date | 24 August 2016 |
| Parties | Jennifer Lambert and Gary Lambert, Plaintiffs-Respondents, v. Travelers Indemnity Company of America, Defendant-Appellant. Paul Reed, Plaintiff-Respondent, v. Qual-Lynx and Township of Marlboro, Defendants, and Monmouth Municipal Joint Insurance Fund,Defendant-Appellant. |
| Court | New Jersey Superior Court — Appellate Division |
Jeffrey W. Mazzola argued the cause for appellant Travelers Indemnity Company of America (Law Offices of William E. Staehle, attorneys; Mr. Mazzola, on the brief).
Danielle Pantaleo argued the cause for appellant Monmouth Municipal Joint Insurance Fund (Cleary Giacobbe Alfieri Jacobs, LLC, attorneys; Ms. Pantaleo, on the brief).
Richard N. Schibell argued the cause for respondents Jennifer Lambert and Gary Lambert (Schibell Mennie & Kentos, LLC, attorneys; John G. Mennie, on the brief).
Michael J. Hanus argued the cause for respondents Paul Reed and William Agar (Mr. Hanus, attorney; Richard T. Smith, on the brief).
Daniel A. Levy argued the cause for amicus curiae New Jersey Association for Justice-New Jersey (Raff & Raff, LLP, attorneys; Mr. Levy, on the brief).
Gibson Kolb, attorneys for amicus curiae The National Association of Subrogation Professionals (Rachael E. Banks, of counsel and on the brief).
Before Judges Koblitz, Kennedy and Gilson.
The opinion of the court was delivered by
GILSON
, J.A.D.
These appeals2 present the same legal questions: Is a worker, who is injured in a work-related motor vehicle accident, permitted to recover medical expenses from a tortfeasor if those medical expenses are paid by the workers' compensation insurer as distinguished from personal injury protection (PIP) benefits paid by the worker's automobile liability insurer? If so, is the workers' compensation insurer entitled to recover the medical expenses from the proceeds of any recovery the worker obtains from the third-party tortfeasor?
The motion judge ruled that the workers' compensation insurers were not entitled to recover the medical expenses because the injured workers were not entitled to recover such expenses from the tortfeasors under N.J.S.A. 39:6A–12
, which bars evidence in an action against the tortfeasor of amounts “collectible or paid” under PIP coverage. Thus, the motion judge reasoned that the injured workers were limited by the no-fault system established by the Automobile Insurance Cost Reduction Act (AICRA), N.J.S.A. 39:6A–1.1 to - 35, that the workers' compensation insurer effectively stepped into the shoes of the automobile insurer, and that the normal recovery provisions of the Workers' Compensation Act (WCA), N.J.S.A. 34:15–1 to -142, did not apply.
does not apply. The workers' compensation insurer, in turn, has a right to be reimbursed for the appropriate portion of the medical expenses it has already paid under N.J.S.A. 34:15–40 (Section 40).
The three cases that give rise to these appeals all present similar material facts. First, each plaintiff was injured in a motor vehicle accident while working. Second, the applicable automobile insurance provided PIP coverage. Third, the medical expenses of each plaintiff were paid by his or her employer's workers' compensation insurer. Plaintiffs were also paid compensation benefits (also referred to as indemnity benefits) for such things as lost wages. Fourth, plaintiffs all sued the tortfeasors, and each of those suits was settled. In each case, plaintiff's recovery from the tortfeasor exceeded the payments he or she had received from the workers' compensation insurer. The settlements, however, apparently did not disclose whether the settlement payment included a payment for medical expenses. Fifth, each plaintiff offered to reimburse the workers' compensation insurer for the appropriate portion of the compensation benefits, but refused to reimburse the workers' compensation insurer for the medical expenses arguing he or she had not recovered medical expenses from the tortfeasor.
To put these similar material facts in context, we summarize the circumstances of the three plaintiffs involved in these appeals.
Plaintiff Jennifer Lambert worked for the Howell Township Board of Education as a school bus aid. On August 6, 2010, Lambert was injured when an automobile driven by Kaitlin Antonaccio collided with the rear of the school bus in which Lambert was working. The Travelers Indemnity Company of America (Travelers) provided workers' compensation insurance to Lambert's employer. As a result of her injuries, Lambert filed a workers' compensation claim, and Travelers paid Lambert $94,705.22 for medical expenses and $54,695.87 for compensation benefits.
Thereafter, Lambert sued Antonaccio. Ultimately that lawsuit settled, with Antonaccio paying Lambert $300,000. Following the settlement, Lambert's counsel offered to pay Travelers $35,713.91, which represented two-thirds of the compensation benefits of $54,695.87, minus statutory costs of $750. Counsel for Lambert, however, refused to pay any reimbursement for medical expenses. Travelers rejected that offer, and Lambert filed a complaint and an order to show cause seeking to extinguish Travelers' lien for medical expenses.
Plaintiff Paul Reed worked for the Township of Marlboro as a police officer. On August 19, 2011, Reed, while in the course of his employment, was redirecting traffic when he was struck by a car driven by Vladen Futernik. Marlboro has workers' compensation insurance through Monmouth Municipal Joint Insurance Fund (MMJIF), which is a joint insurance fund for municipalities of Monmouth County organized under N.J.S.A. 40A:10–36
. Defendant Qual-Lynx is MMJIF's third-party administrator for certain claims. Accordingly, Reed filed a workers' compensation claim, and MMJIF paid him $60,430.48 for medical expenses and $44,578.29 in compensation benefits.
Reed also filed a negligence action against Futernik, which later settled for $100,000. Reed also brought an underinsured motorist (UIM) claim against New Jersey Manufacturers Insurance Company, and that suit settled for $199,000. Thus, Reed's total recoveries against the third-party tortfeasor were $299,000.3
Counsel for Reed offered to reimburse MMJIF for its proportional share of the compensation benefits, but refused to reimburse any of the medical expenses. When MMJIF refused that offer, Reed filed a complaint and an order to show cause seeking to extinguish the medical portion of MMJIF's workers' compensation lien.
Plaintiff William Agar worked as a police officer for the Township of Hazlet. On June 26, 2011, Agar was sitting in his patrol car overseeing road construction when his vehicle was rear-ended by a car driven by Ethel McCaffrey. MMJIF provides insurance for Hazlet, including workers' compensation insurance. Agar filed a claim for workers' compensation and was paid $4331.02 for medical expenses and $15,693 in compensation benefits.
Agar also filed a suit against McCaffrey and settled that action for a payment of $60,000. MMJIF asserted a lien against Agar's settlement and sought reimbursement for both the amounts it paid for compensation benefits and medical expenses. Counsel for Agar offered to reimburse MMJIF for the compensation benefits, but refused to make any reimbursement for medical expenses. When the parties could not reach an accord, Agar filed a complaint and an order to show cause seeking to extinguish the portion of the lien that sought to recover the medical expenses.
The orders to show cause filed by the three plaintiffs were all heard by the same motion judge. In all three matters, the judge entered orders granting plaintiffs' applications to extinguish the portion of the workers' compensation lien seeking reimbursement of the medical expenses, relying on an unpublished case.4 The judge reasoned that when a worker is injured in a motor vehicle accident during the course of employment, the worker is treated as a no-fault insured and, therefore, under N.J.S.A. 39:6A–12
, any recovery from the tortfeasor cannot include medical expenses that had been paid by an insurer. The judge also reasoned that since the injured worker had no right to recover paid medical expenses from the tortfeasor, the workers' compensation insurer could not seek reimbursement of those medical expenses under Section 40 of the WCA.
The workers' compensation insurers (Travelers and MMJIF) appeal the orders that extinguished the medical expense portion of their liens under Section 40 of the WCA. Amicus curiae National Association of Subrogation Professionals filed a brief in support of the position of the workers' compensation insurers. Amicus Curiae New Jersey Association for Justice-New Jersey filed a brief in support of plaintiffs' position. We granted MMJIF's motion to consolidate the appeals filed in the Reed and Agar cases. We denied a motion to consolidate the Lambert appeal because that appeal had already been fully briefed when the motion was filed. We now issue this consolidated opinion to address the legal issues raised in all three appeals.
The issues raised by these appeals concern the interpretation of the interplay between AICRA and the WCA. Therefore, we review these issues of law de novo.
.
We hold that because workers' compensation benefits are the primary source of recovery for injuries suffered by employees in a...
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