Greene v. AIG Casualty Company, (N.J. Superior Court, App. Div. 2013; Decided 10/16/2013).
The issue presented in this case is whether the respondent, AIG, who paid workers’ compensation benefits to the petitioner, Kelly Greene, was entitled to subrogation lien reimbursement pursuant to Section 40 of the New Jersey Act despite the fact that the injury was ultimately denied as non-compensable by AIG. The Workers’ Compensation Judge ruled that the Section 40 Lien was inapplicable to a claim that the carrier deemed to be non-compensable. The Appellate Division disagreed and reversed applying the Section 40 Lien.
The facts of the claim reveal that on June 5, 2009, Ms. Greene, an account analyst for AIG, slipped in the lobby of the building where she worked because the floor was wet from rain. Ms. Greene immediately reported the claim. Since AIG did not own the building where petitioner worked but only leased a portion of the premises, AIG initially denied the claim and advised the petitioner to submit any bills to her health insurance carrier. Nevertheless, within days of that denial letter, AIG did authorize treatment without prejudice pursuant to N.J.S.A. 34: 15-15 of the Act.
Ten weeks after the accident, AIG’s carrier wrote to the petitioner placing her on notice of the carrier’s intention to pursue Section 40 Lien Rights. The petitioner did subsequently file a Claim Petition in the Division of Workers’ Compensation against AIG as well as a third-party tort action presumably against the building’s landlord. AIG answered the claim indicating that the determination of whether petitioner’s injuries were compensable was still under investigation. Nevertheless, AIG continued to pay not only medical benefits but also temporary disability benefits pursuant to Section 15, i.e., without prejudice, to subsequently deny the claim. AIG did subsequently file an Amended Answer denying that petitioner’s injuries arose out of and during the course of employment.
Petitioner filed two motions in order to compel AIG to provide medical treatment under the Workers’ Compensation policy and another motion to bar any claim by AIG for Section 40 Lien reimbursement for payments made.
Petitioner received a settlement in the amount of $225,000.00 relative to the third-party claim. She also received workers’ compensation benefits from AIG totaling approximately $119,000.00.
Despite the payment of benefits, the Workers’ Compensation Judge ruled that AIG was not entitled to subrogation lien reimbursement since they had intended to escape the obligation and ultimate conclusion that petitioner’s injuries were compensable by denying the claim. The Judge concluded that Section 40 Lien Rights only apply if the claim is determined to be compensable.
The Appellate Division noted that payments can be made pursuant to Section 15 of the statute without admitting liability. The Court reviewed the provisions of Section 40 and noted the clear intention to prevent an injured employee from recovering and retaining workers’ compensation benefits while at the same time recovering and retaining full damages from a third-party law suit. The Court noted that nothing in either Section 15 or Section 40 required an ultimate conclusion that benefits provided were ultimately owed in order for reimbursement to apply. Allowing the reimbursement encourages the employer to provide prompt voluntary payments (even if under Section 15) thereby providing the employee with needed funds for medical treatment and, in this case, also wage replacement.
It is surprising that the petitioner/plaintiff felt justified in arguing that despite the fact that AIG provided $119,000.00 in benefits they were not entitled to any reimbursement out of the third-party funds simply because those benefits were paid “without prejudice”. The Judge’s decision was equally perplexing. The benefits for medical and temporary total disability benefits were, in fact, paid to the petitioner and would clearly have represented a double recovery had AIG been unable to assert reimbursement rights. It was interesting that there was no case on point.
Chalmers v. Swartz, No. A-1472-12T4
The Appellate Division was faced with determining whether a plaintiff was a joint employee of the defendant whom she was suing for personal injuries as owner and operator of the medical facility where she was injured. Her boss (the son of the defendant) was not named in lawsuit. In the case of joint employment, the indicia of employment must be evaluated in order to determine liability for workers’ compensation benefits. Of all inquiries considered, of most importance is the determination of “whose interest the employee was furthering at the time of accident.”
The plaintiff was employed to clean the medical facility. She injured herself when she tripped on a piece of pipe while taking out the trash. The facility was owned by defendant, who also maintained a medical practice at the facility with his son, who the plaintiff identified as her boss. Both doctors submitted that they were engaged in a joint medical practice. The plaintiff was paid from a joint checking account, covered by a workers’ compensation policy which listed both doctors as her employers, and serviced both doctors’ interest in cleaning the medical facility. The court found the undisputed facts yielded the conclusion that the plaintiff was an employee of both doctors and, therefore, her civil suit could not proceed as both doctors were immune from suit as her employers.
The plaintiff, made an application that the matter be transferred to the Division of Workers’ Compensation pursuant to Rule 1:13-4(a) and same was granted. The court found that notice had been provided to the workers’ compensation carrier within the two year statute of limitation for filing a claim and as such, in the interest of justice, the case should be transferred to the Division of Workers’ Compensation.
For more information regarding Greene v. AIG Casualty Company, please contact Jeffrey Newby at jnewby@wglaw.com or 856.667.5804.