delivered the opinion of the Court.
The parents of a decedent-employee filed workers’ compensation claims against their son’s employer. The parents entered into a settlement of those claims with the employer without making any allowance for the payment of their son’s medical bills. The hospital and medical group that provided care and treatment to the decedent filed a collection action seeking payment of their bills because they had no advance knowledge of and did not participate in the settlement of the workers’ compensation claims. The Law Division found that the hospital and medical group were not bound by the settlement. The Appellate Division found differently and barred the collection action because the medical providers did not intervene timely in the compensation action. We reverse and hold that those medical providers are not bound by a settlement of which they had no notice and to which they were not a party.
I
We summarize the facts, as we must, in the light most favorable to plaintiffs to determine whether the grant of summary judgment
On or about September 28, 1996, Christodoulou’s father, Steve, filed with the New Jersey Division of Workers’ Compensation (the Division) an employee claim petition on behalf of his son’s estate
On April 2, 1997, Kent wrote to Goldberger and requested that Goldberger advise him when the workers’ compensation case was expected “to be heard or settled.” Kent also forwarded to Goldberger the medical bills related to the services rendered to Mario Christodoulou. By letter dated June 3, 1998, Goldberger informed Kent that plaintiffs’ “bills have been noted and will be presented to the Court at the time of the Hearing,” and that a representative of the hospital likely would have to appear at the hearing. On October 28, 1998, Kent made a follow-up inquiry with Goldberger concerning the status of the case. Two days later, Goldberger responded that the case would soon be listed for trial and that a representative of the medical providers would have to testify to the nature of the services rendered and the reasonableness of the bills. On November 2, 1998, the Christodoulous and Auto Auction signed a pretrial memorandum that listed plaintiffs’ outstanding medical bills.
On May 10, 1999, at a hearing before a workers’ compensation court judge pursuant to N.J.S.A 34:15-20 (Section 20), Steve Christodoulou settled both the employee and dependency claims in exchange for a $50,000 lump-sum payment from Auto Auction. The settlement was placed on the record. Steve Christodoulou acknowledged to the court that he was entering into the settlement because of the great difficulty he would face in proving his claims. He also acknowledged his understanding that after dismissal of the claims he would have no further recourse against Auto Auction except in one respect: to seek indemnification against Auto Auction for payment of his son’s medical bills. On the record, in the presence of Auto Auction’s lawyer, Goldberger assured his client, Steve Christodoulou, that, as part of the settlement, Auto Auction’s insurance carrier would “protect” him in the event of a lawsuit by a doctor or hospital seeking payment of medical bills for services rendered to his son as a result of the accident. The workers’ compensation court judge signed the
By letter dated August 9, 1999, Goldberger informed plaintiffs’ lawyer, Kent, of the Section 20 settlement and the dismissal of the Christodoulou compensation claims, stating:
Due to a serious question of liability, we entered into a Dismissal of the matter pursuant to Section 20 of the New Jersey Workers’ Compensation Act.
However, your clients^] rights have been preserved in that the Dismissal specifically provided that the AIG Claim Services would hold the Petitioner harmless, for any medical and hospital bill arising out of the accident in question.
Should you desire to proceed to collect any of the outstanding bills, I suggest that you immediately contact the AIG Claim Services.
Plaintiffs did as directed and forwarded their bills to AIG for payment. On March 29, 2000, counsel for AIG, James Supple, refused plaintiffs’ demand for payment. Supple claimed that AIG had agreed to hold Steve Christodoulou harmless — not his son’s estate — for payment of the medical bills, and because the father was not responsible to pay the bills of his son, AIG “decline[d] to reimburse” the medical providers. In August and October 2000, plaintiffs filed motions in the workers’ compensation court, seeking (1) permission to present their unpaid bills for payment, and (2) a Rule 4:50-1 vacation of the order approving the Section 20 settlement. On January 8, 2001, the court denied both motions because plaintiffs had not filed a timely petition for relief. In an unpublished decision, the Appellate Division affirmed. On July 16, 2002, we denied certification. 174 N.J. 191,
On March 16, 2001, plaintiffs filed a complaint in the Law Division against Mario S. Christodoulou (deceased), by his Guardian Ad Prosequendum, and Steve Christodoulou (collectively, the Christodoulous), Auto Auction, Granite State Insurance Company, and AIG Claim Services, Inc. to recover the cost of medical
On October 9, 2002, the Law Division dismissed without prejudice plaintiffs’ claims against the law firms representing the Christodoulous and Auto Auction, and denied all other motions for summary judgment and dismissal. The court concluded that genuine issues of material fact precluded summary judgment as to each party.
The Appellate Division granted the Christodoulous and Auto Auction leave to appeal from the denial of their summary judgment motions to dismiss plaintiffs’ common law collection action and found that the trial court had erred by denying those motions. Univ. of Mass. Mem’l Med. Ctr., Inc. v. Christodoulou, 360 N.J.Super. 313, 320,
The Appellate Division also determined that in the Section 20 agreement, Auto Auction and its compensation carriers agreed to hold harmless and, therefore, to indemnify both Steve and Despina Christodoulou and Mario Christodoulou’s estate in the event of a lawsuit or judgment arising from a collection action for the cost of Mario’s medical care. Id. at 321,
Plaintiffs petitioned for review of the Appellate Division’s dismissal of their collection action. We granted certification. 177 N.J. 571,
II.
A.
Under the New Jersey Workers’ Compensation Act, N.J.S.A. 34:15-1 to -128 (the Act), an employer is required to provide necessary medical treatment to a worker injured in the course of employment. N.J.S.A. 34:15-15; see also Med. Diagnostic Assocs. v. Hawryluk, 317 N.J.Super. 338, 343,
B.
The Workers’ Compensation Act also permits a health care provider to file a petition in order to assert its claim for payment for medical services rendered to an injured employee or to intervene in a pending workers’ compensation action. N.J.S.A. 34:15-15; N.J.A.C. 12:235-3.10(a)3. N.J.SA 34:15-15 provides that an employer is not liable for the costs of services rendered by a
With certain limited exceptions, the Workers’ Compensation Act is the exclusive remedy for an employee who suffers a work-related injury. N.J.S.A. 34:15-7, -8. The Act, however, does not purport to establish an exclusive remedy for a hospital or physician that, pursuant to a contract, has provided medical services to a patient who may or may not have suffered a job-related injury. See W. Jersey Health Sys. v. Croneberger, 275 N.J.Super. 303, 307-08,
Nothing in the Act suggests that a medical provider must file a petition in the Division of Workers’ Compensation or intervene in a pending action in order to preserve its right to a contractual remedy against a patient whose treatment arose from a work-related injury. Otherwise, every physician who rendered
C.
N.J.S.A 34:15-20 allows an employee and employer in a contested workers’ compensation ease to enter into a lump-sum settlement with the approval of the compensation court to resolve an “issue or issues involving] the question of jurisdiction, liability, causal relationship or dependency.” After considering the employees testimony and that of any other witness, along with any stipulation between the parties, the court must determine whether the “settlement is fair and just under all the circumstances.” N.J.S.A. 34:15-20. If it does so, the court enters an “order approving settlement.” Ibid. (internal quotation marks omitted). A Section 20 settlement has “the force and effect of a dismissal of the claim petition and shall be final and conclusive upon the employee and the employee’s dependents, and shall be a complete surrender of any right to compensation or other benefits arising out of such claim under the statute.” Ibid. Section 20 is a
There is no language in Section 20 or its legislative history that suggests that medical providers who do not participate in settlement negotiations or agree to a settlement surrender their contractual rights to payment for services rendered to an employee. See N.J.S.A. 34:15-20; see also L. 1979, c. 288, 8; Senate Labor, Industry and Professions Committee, Joint Statement to Senate Committee Substitute for Senate No. 802 and Assembly Committee Substitute for Assembly No. 8h0, at 2 (Nov. 13, 1979). The employee decides whether to negotiate towards a settlement and to the terms of any settlement. It is within the power of the employee either to provide for the payment of outstanding medical bills in a Section 20 settlement or to pursue a hearing to compel an employer to assume responsibility for those payments. The employer and the employee, however, cannot extinguish the rights of those who do not participate, or do not have the opportunity to participate, in a settlement. Cf. Kibble v. Weeks Dredging Constr. Co., 161 N.J. 178, 194-95,
III.
The Appellate Division concluded that plaintiffs were required to pursue an administrative remedy by either filing a petition to seek reimbursement or moving to intervene in the Christodoulou compensation action and that plaintiffs could not seek relief on a contract action in the Law Division. Christodoulou, supra, 360 N.J.Super. at 316, 320,
Plaintiffs relied on the repeated representations of the Christodoulous’ attorney that the bills for plaintiffs’ medical services would be presented to the compensation court. In light of those representations, we cannot find that plaintiffs acted unreasonably by not filing their own petition or by not intervening by motion in the compensation action. The Christodoulous did not advise plaintiffs of the settlement discussions or the date of the Section 20 hearing, and assigned no portion of the settlement to pay their son’s medical bills. Having lulled plaintiffs into believing that their bills would be presented for payment in the compensation court when they knew otherwise, the Christodoulous cannot now be heard to argue that plaintiffs’ only forum for relief was in the Division of Workers’ Compensation. Knorr v. Smeal, 178 N.J.
At the time of the Section 20 settlement, the parties to that agreement did not act under the belief that the contractual rights of plaintiffs were extinguished by the settlement. This is evident because in the “Order Approving Settlement,” Auto Auction agreed to hold Steve Christodoulou “harmless for any medical or hospital bill arising out of the accident.” Moreover, the Christodoulous’ attorney wrote to plaintiffs’ attorney, Kent, that plaintiffs’ “rights have been preserved” and that Kent should “proceed to collect” the outstanding bills from AIG, the claim processor for Auto Auction’s compensation carrier. When Kent sought to collect, AIG’s counsel took the position that the hold-harmless agreement extended only to Steve Christodoulou, not to his son’s estate, and refused to reimburse plaintiffs. At that time, no one posited that plaintiffs lost their contractual right to seek reimbursement for their medical bills as a result of the settlement. Not one word placed on the record at the Section 20 settlement hearing or in the settlement order suggested that plaintiffs’ contractual rights were extinguished. The Christodoulous and AIG basically pointed fingers at one another as to who was responsible for the medical bills.
We disapprove of language in lower court decisions stating that a common law collection action by a medical provider can be filed only after a judgment of non-compensability has been rendered in the compensation court. See, e.g., Christodoulou, supra, 360 N.J.Super. at 319,
The Appellate Division found that permitting plaintiffs to pursue a claim for payment in the Law Division “would render [the Section 20] settlement illusory for the parties to the compensation action, an outcome ... entirely inconsistent with our strong public policy favoring settlement of litigation.” Christodoulou, supra, 360 N.J.Super. at 320,
We find that the rule adopted by the Appellate Division that a medical provider may not maintain a collection action in the Law Division against an employee who has a pending workers’ compensation claim is consistent with the goal of handling claims efficiently and avoiding duplication of efforts. See, e.g., Med. Diagnostic Assocs., supra, 317 N.J.Super. at 347-49,
rv.
We reverse the Appellate Divisions holding that plaintiffs collection action is barred because of plaintiffs failure to intervene or file their own claim in the Division of Workers Compensation. We reinstate the complaint, and remand to the Law Division for further proceedings consistent with this opinion.
For reversal/reinstatement/remandment — Chief Justice PORITZ and Justices YERNIERO, LaVECCHIA, ZAZZALI, ALBIN and WALLACE — 6.
Opposed — None.
Notes
As the Appellate Division noted, "there is no evidence of the formal appointment of an administrator or executor of such estate as Mario might have had.” Univ. of Mass. Mem’l Med. Ctr., Inc. v. Christodoulou, 360 N.J.Super. 313, 319,
Plaintiffs also named Travelers Insurance Company, Auto Auction’s fleet/PIP carrier, as a defendant. The Law Division granted Travelers’ motion for summary judgment on statute-of-limitations grounds on March 15, 2002. That decision was not part of the appeal below.
We do not reach the issue of whether a medical provider, who has actual knowledge of a pending workers' compensation proceeding and that its bills will not be presented for payment, would have a duty to intervene or could wait until the compensation proceeding had concluded before pursuing a common law