Montedoro v. City of Asbury Park

• Court: New Jersey Superior Court — Appellate Division
• Writing for the Court: MORGAN
• Citation: Montedoro v. City of Asbury Park, 174 N.J.Super. 305, 416 A.2d 433 (N.J. Super. App. Div. 1980)
• Decision Date: 30 May 1980
• Parties: Anthony MONTEDORO, Petitioner-Respondent, v. CITY OF ASBURY PARK, Respondent-Appellant.

Page 305

174 N.J.Super. 305

416 A.2d 433

Anthony MONTEDORO, Petitioner-Respondent, v. CITY OF ASBURY PARK, Respondent-Appellant.

Superior Court of New Jersey, Appellate Division.

Argued April 21, 1980.

Decided May 30, 1980.

Gerard D. Rotella, South Orange, for respondent-appellant (Cunneen & O'Gorman, South Orange, attorneys; Gerard D. Rotella, on the brief).

Raymond P. Shebell, Asbury Park, for petitioner-respondent (Shebell & Schibell, Asbury Park, attorneys; Raymond P. Shebell, on the brief).

Before Judges ALLCORN, MORGAN and FRANCIS.

The opinion of the court was delivered by

MORGAN, J. A. D.

In this appeal we must decide whether a worker's compensation lien, provided for by N.J.S.A. 34:15-40, attaches to the proceeds of an uninsured motorist's policy. The judge of compensation rejected the employer's carrier's lien claim. The employer appeals.

The relevant facts are not in dispute. The petitioner, a patrolman employed by appellant Asbury Park, was injured in a work-related automobile accident with an uninsured motorist. His claim filed against Asbury Park's uninsured motorist coverage (UMC) resulted, following arbitration, in an award of $14,500 exclusive of personal injury protection benefits. His claim petition seeking worker's compensation benefits for the same injuries resulted in a total compensation award of $2,750. It was during the worker's compensation hearing that the employer unsuccessfully asserted its lien against the UMC recovery in extinction of its adjudicated worker's compensation liability.

Walkowitz v. Royal Globe Ins. Co., 149 N.J.Super. 442, 374 A.2d 40 (App.Div.1977), and Sweeney v. Hartford Acc. & Indem. Co., 136 N.J.Super. 591, 347 A.2d 380 (Law Div. 1975), provided the principal predicate for the judge's ruling in this case. Both cases invalidated, because of repugnancy to statute and public policy, those provisions of a statutorily prescribed UMC policy which attempted to diminish liability thereon by the amount of worker's compensation received by the insured for his injuries. Neither, however, dealt with the issue involved here, whether N.J.S.A. 34:15-40 invests the employer or his carrier with a compensation lien on an injured employee's right to recover on a UMC policy provided by his employer. The reason given in Walkowitz and Sweeney for invalidating the policy provisions crediting the carrier with the amount of worker's compensation received by the insured underscore the distinction between the two issues.

. . . Consequently, any attempt by the insurer to limit its liability under this coverage by providing for a reduction in the amount due thereunder by the amount of worker's compensation benefits received by or awarded to the insured violates the clear mandate of the statute and is against the public policy of this State. . . .

The compensation lien, however, created by N.J.S.A. 34:15-40, is not in violation of statute, and having been enforced for well over 60 years is hardly against public policy. It was adopted to prevent what had been previously occurring an injured employee retaining worker's compensation benefits while also retaining the fruits of a common law recovery in damages from the third-party tortfeasor responsible for the injuries for which the employee recovered worker's compensation. New Amsterdam Cas. Co. v. Popovich, 18 N.J. 218, 225-226, 113 A.2d 666 (1955). N.J.S.A. 34:15-40 first preserves an employee's right of action against "a third person . . . liable to the employee or his dependents for an injury or death . . . ." The next portions, critical to this appeal, read as follows:

. . . In the event that the employee or his dependents shall recover and be paid from the said third person or his insurance carrier, any sum in release or in judgment on account of his or its liability to the injured employee . . . , the liability of the employer under this statute thereupon shall be only such as is hereinafter in this section provided.

(b) If the sum recovered by the employee . . . 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 for the medical expenses incurred and compensation payments theretofore paid to the injured employee . . . .

First, we note that, with one exception which we view as minor, the given facts fall precisely within the statutory language. A "third party" (uninsured motorist) has been found liable to the employee for the employee's injury and the sum recovered by the employee from the UM carrier is greater than that the worker's compensation to which he has been adjudicated entitled. The one distinction is that the third-party recovery was not from "the third person or his insurance carrier" but rather from the employer's insurance carrier whose...