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. WILLIAM AGAR, Plaintiff-Respondent, v. QUAL-LYNX and TOWNSHIP OF HAZLET, Defendants, and MONMOUTH MUNICIPAL JOINT INSURANCE FUND, Defendant-Appellant.
DOCKET NO. A-1073-14T3, A-3040-14T1, A-3107-14T1
SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION
August 24, 2016
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION; APPROVED FOR PUBLICATION August 24, 2016
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1073-14T3 A-3040-14T1 A-3107-14T1
JENNIFER LAMBERT and GARY LAMBERT, Plaintiffs-Respondents, v. TRAVELERS INDEMNITY COMPANY OF AMERICA, Defendant-Appellant.
APPROVED FOR PUBLICATION August 24, 2016 APPELLATE DIVISION
PAUL REED, Plaintiff-Respondent, v. QUAL-LYNX and TOWNSHIP OF MARLBORO, Defendants, and MONMOUTH MUNICIPAL JOINT INSURANCE FUND,1 Defendant-Appellant.
Argued June 2, 2016 - Decided August 24, 2016
Before Judges Koblitz, Kennedy and Gilson.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket Nos. L-2702-14, L-4610-14, and L-4911-14.
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.
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).
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
We reject that interpretation of the interplay between AICRA and the WCA, and hold that when a worker is injured in the course of his or her employment in a motor vehicle accident and workers’ compensation coverage is available, the right of the injured worker to pursue claims against the third-party tortfeasor and the right of the workers’ compensation insurer to be reimbursed are governed by the WCA and not AICRA. Accordingly, the injured worker may recover medical expenses from the third-party tortfeasor and
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.
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’
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
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
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
II.
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. Farmers Mut. Fire Ins. Co. of Salem v. N.J. Prop.-Liab. Ins. Guar. Ass‘n, 215 N.J. 522, 535-36 (2013).
We hold that because workers’ compensation benefits are the primary source of recovery for injuries suffered by employees in a work-related automobile accident, and PIP insurers are relieved from the obligation to pay medical expenses under
The statutes and case law support this holding. We therefore examine AICRA, the WCA, and the interplay between those two statutes. We also review the existing case law.
Since 1972, New Jersey has made “legislative efforts to control the rising cost of automobile insurance by placing restrictions on an accident victim‘s right to sue for noneconomic damages.” DiProspero v. Penn, 183 N.J. 477, 485 (2005). In 1998, the Legislature enacted AICRA “with a multi-pronged approach aimed at achieving the goals of containing [automobile insurance] costs.” Id. at 488. The goal of AICRA was to reduce the cost of automobile insurance by reducing the number of litigated claims. See James v. Torres, 354 N.J. Super. 586, 594 (App. Div. 2002), certif. denied, 175 N.J. 547 (2003).
AICRA expanded New Jersey‘s no-fault automobile insurance system by, among other things, requiring every automobile insurance policy to provide PIP benefits, “which guarantee ‘without regard to fault,’ medical expense coverage for the named insured” who suffers bodily injury in an automobile accident. Perrelli v. Pastorelle, 206 N.J. 193, 201 (2011) (quoting Caviglia v. Royal Tours of Am., 178 N.J. 460, 466 (2004)). AICRA accordingly prohibits an injured person from seeking to recover from a tortfeasor medical expenses already paid under PIP coverage from the injured person‘s own automobile insurer.
B. The WCA
The WCA provides a “system of compensation for workers” injured in the course of their employment. Estate of Kotsovska ex rel. Kotsovska v. Liebman, 221 N.J. 568, 583-84 (2015) (quoting Fitzgerald v. Tom Coddington Stables, 186 N.J. 21, 31 (2006)). The WCA represents a “historic ‘trade-off’ whereby employees relinquish their right to pursue common-law remedies [against their employers] in exchange for prompt and automatic entitlement to benefits for work-related injuries.” Laidlow v. Hariton Mach. Co., 170 N.J. 602, 605 (2002) (quoting Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161, 174 (1985)); see Tlumac v. High Bridge Stone, 187 N.J. 567, 573 (2006) (explaining that the WCA‘s “remedial purpose” is “to make benefits readily and
C. The Interplay between AICRA and the WCA
When a worker suffers a work-related injury in a motor vehicle accident, workers’ compensation coverage is the primary source of insurance under the collateral source rule. See
The issues on these appeals turn on the interpretation of the interplay between AICRA and WCA. The question is: Did the Legislature intend
The collateral source rule does not make workers’ compensation insurance part of the PIP no-fault system; rather it shifts the burden of providing insurance from the automobile insurance system to the workers’ compensation system. Thus, the collateral source rule states that “benefits[] collectible under workers’ compensation insurance . . . shall be deducted from the benefits collectible under [
Indeed, the statutory words “collateral source rule” are most clearly understood as shifting the insurance coverage from automobile insurance to workers’ compensation insurance.
In addition, nothing in the legislative history of AICRA suggests the Legislature meant to treat workers, who are injured in a work-related automobile accident, as if they were limited by AICRA‘s no-fault system. Nor is there any suggestion that the Legislature intended to treat workers’ compensation insurers as if they were PIP insurers. Indeed, there is simply no discussion of such an incorporation. It is fair to assume that had the Legislature intended to effectuate such a major change, it would have used express language in the statute and discussed that incorporation in AICRA‘s legislative history.
D. The Case Law
Our holding is also consistent with existing case law. Two opinions have addressed these issues. See Lefkin, supra, 229 N.J. Super. at 7; Talmadge v. Burn, ___ N.J. Super. ___ (App. Div. 2016) (slip op. at 1).
Lefkin involved a claim by a worker injured in a work-related automobile accident. Id. at 5-6. The worker‘s medical expenses were paid by the workers’ compensation insurer and, thus, the PIP automobile insurer did not pay those medical expenses. Id. at 6. The worker sued his PIP automobile insurer, Aetna Insurance Company, and the tortfeasors who caused the automobile accident. Id. at 5. The claims against the tortfeasors were settled and the worker sought to have Aetna pay the portion of his workers’ compensation lien related to medical expenses. Id. at 6-7. In that regard, the worker argued that, because such a recovery was barred by
We explained that there are “three potential sources of reimbursement of [the worker‘s] medical expenses . . . : workers’ compensation benefits, PIP benefits, and recovery from the tortfeasor.” Id. at 7. When all three potential payment sources “conjoin,” the worker can recover his medical expenses from the tortfeasor. The workers’ compensation insurer, in turn, is entitled to reimbursement for the medical expenses previously paid, less attorney‘s fees and costs of suit. Id. at 9.
While Lefkin, which was issued in 1988, pre-dated AICRA, which was enacted in 1998, see L. 1998, c. 21, nothing in AICRA changed the statutory provisions on which Lefkin relied. Importantly, both
In Talmadge, this court recently reached a conclusion consistent with Lefkin. Talmadge, supra, slip op. at 6. We held that a workers’ compensation insurer was entitled to be reimbursed for medical expenses when a worker, injured in an automobile accident, made a subsequent recovery from the third-
The Hartford asserted a workers’ compensation lien of $84,510.78 against that third-party recovery. Ibid. The plaintiff moved to reduce the workers’ compensation lien to exclude the medical expenses. Ibid. The Law Division denied that motion, and we affirmed. In affirming, we explained that “[t]he [Workers’ Compensation Act] clearly permits an employee who received workers’ compensation benefits to seek recovery against the third-party for those benefits, including paid medical expenses. The statute also expressly entitles the workers’ compensation carrier to repayment of all benefits paid to the employee.” Id. at 6-7 (citing Greene v. AIG Cas. Co., 433 N.J. Super. 59, 68 (App. Div. 2013)).
The motion judge here relied on the “rationale” of an unpublished opinion and ruled that workers’ compensation insurers were not entitled to recover medical expenses they paid because injured workers were not entitled to recover such
Accordingly, the orders extinguishing the portion of the workers’ compensation liens related to medical expenses are reversed in all three cases on appeal. All three matters are remanded for entry of appropriate orders enforcing the workers’ compensation liens.
Reversed and remanded. We do not retain jurisdiction.
CLERK OF THE APPELLATE DIVISION