NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-1407-99T2
HEIDI DELANE, Individually and
as Administratrix of the Estate
of MICHAEL DELANE,
Plaintiff-Respondent/
Cross-Appellant,
and
THE NEWARK FIREMEN'S UNION,
Plaintiff,
v.
THE CITY OF NEWARK; STANLEY
KOSSUP and BRUCE PAYNTER,
Defendants-Appellants/
Cross-Respondents,
and
PUBLIC SERVICE ELECTRIC and
GAS COMPANY,
Defendant.
_______________________________________
Submitted: January 9, 2001 - Decided:
July 24, 2001
Before Judges Stern, A. A. Rodríguez and Fall.
On appeal from the Superior Court of New
Jersey, Law Division, Essex County, L-12926-
95.
Michelle Hollar-Gregory, Corporate Counsel,
attorney for appellants/cross-respondents
(Hugh Gallagher, Assistant Corporate Counsel,
on the brief; Mr. Gallagher and Susan S.
Singer, Assistant Corporation Counsel, on the
reply brief).
Lowenstein Sandler and Wright, Pindulic &
Hamelsky, attorneys for respondent/cross-
appellant Heidi DeLane, as Administratrix of
the Estate of Michael DeLane (Patrick J.
Whalen and Kimberly Espinales, on the brief;
Amy R. Bitterman, on the reply brief).
Purcell, Ries, Shannon, Mulcahy & O'Neill,
attorneys for respondent Heidi DeLane,
individually (Kevin Kovacs, on the brief).
The opinion of the court was delivered by:
RODRÍGUEZ, A. A., J.A.D.
Three novel issues are presented in this appeal and cross
appeal: (1) whether a workers' compensation lien, arising by
operation of N.J.S.A. 34:15-40, attaches to the full amount of a
wrongful death recovery from a third party or only to that portion
of the recovery which is deemed "lost wages damages;" (2) whether
the workers' compensation lien should attach to a survival action
recovery from a third party when the injured worker did not file a
claim petition nor receive any workers' compensation benefits; and
(3) whether the "intentional wrong" exception to the exclusive
remedy provision set forth by N.J.S.A. 34:15-8 applies to an
employer whose past and present practices have recklessly exposed
its employees to substantial risks of death or injury. We hold
that the workers' compensation lien attaches to any amount
recovered in a wrongful death action, but that it does not attach
to the proceeds of a survival claim for pain and suffering when the
injured employee had not filed a claim petition nor received any
workers' compensation benefits. We also hold that the facts
presented here do not implicate the "intentional wrong" exception.
I
The relevant facts are undisputed. Michael DeLane, a
firefighter with the Newark Fire Department, died from
electrocution while fighting a fire. He was thirty-three years
old. A fellow firefighter, Juan Ramos, was also electrocuted while
fighting the same fire. Fortunately, Ramos survived.
The events leading up to this accident can be summarized as
follows. In the early morning hours of October 29, 1994, the
Newark Fire Department responded to a fire at Chester Avenue in
Newark. The firefighters were organized into four engine
companies, two ladder truck companies and one rescue company.
Captain Bruce Paynter was the commander of one of the ladder truck
companies. Ramos, a probationary firefighter in Paynter's
company, positioned an aerial ladder on the roof of the burning
building between overhead primary electrical supply wires conveying
1,300 volts and secondary electrical supply wires conveying
approximately 600 volts. The wires were six to twelve inches above
and below the top of the ladder. Once in place, four firefighters,
including Paynter and Ramos, climbed the ladder to cut ventilation
holes in the roof. A power saw was brought atop the roof to cut
the holes.
DeLane, a member of the rescue company, climbed the ladder to
the roof to aid the others. Heavy fire and smoke bellowed from
every opening of the building. The roof began to show signs of
deterioration. Paynter ordered all firefighters off the roof.
Ramos and DeLane were the first and second, respectively, to
descend the ladder.
After Ramos had reached ground level, DeLane requested his
assistance to remove the power saw from the roof. Ramos climbed
the ladder again but stayed below the level of the power lines.
DeLane passed the saw to Ramos under the wires. While both men
were holding the saw, it struck a primary wire. Ramos was
electrocuted and became unconscious. DeLane was electrocuted but
remained conscious. He called out for someone to help Ramos. He
told a fellow firefighter, Ron Ballew, that his left side was numb.
Ballew tried to crawl under the wires, but DeLane stopped him to
prevent him, too, from coming in contact with the wires. Paynter
called for assistance. Ramos was removed from the ladder. The
injured DeLane slid towards the wire and came in contact with it a
second time. He was pronounced dead at the hospital about one hour
later.
DeLane's wife, Heidi DeLane, acting individually and as
Administratrix of his Estate (plaintiff), and the Newark Firemen's
Union sued the City of Newark, its fire department, its Fire
Director and Fire Chief (Stanley Kossup), and Captain Paynter
(collectively "the City"), as well as Public Service Electric and
Gas (PSE&G). The complaint alleged several causes of action,
including a claim for DeLane's pain and suffering prior to his
death (the survival claim) and a claim for his wrongful death.
Ramos and his wife also filed a lawsuit against the same
defendants. The two lawsuits were consolidated.
The City answered and cross-claimed against the State of New
Jersey and PSE&G. After a period of discovery, the City and its
employees moved for summary judgment pursuant to the exclusive
remedy provisions set by
N.J.S.A. 34:15-8. The judge issued a
written opinion granting summary judgment, dismissing all claims by
plaintiff and Ramos against the City, its fire department, and its
employees. The Ramos settled with the remaining defendants.
PSE&G offered plaintiff $500,000 to settle the claims against
it. At the time of DeLane's death, his wife and his parents, Jude
and Carmela DeLane, were economically dependent on him. As such,
the DeLanes agreed to the following allocation of the $500,000
settlement. First, the amount of the settlement was split evenly
between the survival and wrongful death claims. From the $250,000
settlement allocated to the survival claim, $110,000 would be paid
to Heidi, $60,000 to the parents, and $80,000 to satisfy costs and
attorney's fees. From the $250,000 settlement allocated to the
wrongful death claim, $96,080 would be paid to Heidi, $75,200 to
the Estate's attorney as costs and fees, $10,200 to the parents,
$4,800 to the parents' attorney, and $63,720 to the City to
satisfy, in full, its workers' compensation lien.See footnote 11 This allocation
was based on a comprehensive study by Frank D. Tinari, Ph. D., an
economist, which was submitted to the trial court. Dr. Tinari
projected that the wrongful death damages sustained by the DeLanes
totaled $1,438,166.
The DeLanes accepted the offer subject to two conditions: (1)
the judge's approval of a limitation on the workers' compensation
lien to $62,466, to be paid only from Heidi's share of the lost
wages damages; and (2) any appellate reversal of the proposed
allocation would void the entire settlement. The judge granted
plaintiff's motion and approved the settlement against PSE&G,
allocated the settlement as proposed by the DeLanes and ordered
that the City's workers' compensation lien attach only to the
amount of damages attributable to lost wages payable to Heidi, not
to exceed $62,466.
The City appeals contending that: (1) its lien attaches to
all wrongful death damages and not just lost wages; and (2) its
lien for dependency benefits should attach to the survival claim
settlement. Plaintiff, as Administratrix of the Estate, cross-
appeals contending that: (1) the judge erred in granting the
City's motion for summary judgment because the judge misapplied the
"substantial certainty" exception to the workers' compensation
exclusive remedy provision; and (2) the City has waived any claim
or defense as to the reasonableness of the allocation of the
settlement funds.
II
The City first contends that its lien should attach to all of
the DeLane's wrongful death recovery from PSE&G and not just to
that allocated to lost wages. We agree.
Plaintiff contends that the workers' compensation lien should
be limited to the amount of lost wages. Plaintiff argues that
because she did not receive any workers' compensation benefits for
the loss of DeLane's companionship and society, there is no double
recovery for these damages in the PSE&G wrongful death settlement.
Plaintiff offers no controlling authority for this argument.
The argument has some superficial appeal. However, upon
closer analysis, we reject it. It is true that the intent of the
workers' compensation lien provision is to avoid double recoveries
which may occur when a beneficiary of workers' compensation
benefits also receives, from a third party, damages that match
those benefits.
Frazier v. N.J. Mfr. Ins. Co.,
142 N.J. 590, 597
(1995). However, there are other considerations. First, we note
that damages for loss of companionship and society are really
economic dependency damages.
See Green v. Bittner,
85 N.J. 1
(1980). The measure of these sorts of damages is the monetary
value of those services which the dead companion used to provide
and for which the dependent must now pay.
Id. at 11. Here, the
workers' compensation dependency benefits paid to Heidi are, in
part, to redress her monetary loss of DeLane's companionship and
society.
Second, a wrongful death claim is a single claim, not a
collection of separate causes of action. In
DeFelice v. Beall,
274 N.J. Super. 592, 598 (App. Div.),
certif. denied,
138 N.J. Super. 268 (1994), we held that:
where one person is injured and dies from
injuries sustained in an automobile accident,
the loss of care, guidance, advice and
services claims of the dependents are subsumed
in a
single action under the Wrongful Death
Act, and are components of a
single pecuniary
loss claim. The claim of the administrator ad
Prosequendum or the executor is subject to the
per-person limit of the policy.
[
Id. at 598 (emphasis added).]
See also,
MacMullen v. Maryland Cas. Co.,
127 N.J. Super. 231, 238
(App. Div. 1974),
aff'd,
67 N.J. 416 (1975) (stating that a
recovery from wrongful death is one lump sum representing all
economic losses, past and future).
Third, the language of
N.J.S.A. 34:15-40 supports the
conclusion that the entire wrongful death recovery is subject to
the lien.
N.J.S.A. 34:15-40 provides as follows in pertinent part:
Liability of third party
Where a third person is liable to the
employee or his dependents for an injury or
death, the existence of a right of
compensation from the employer or insurance
carrier under this statute shall not operate
as a bar to the action of the employee or his
dependents, nor be regarded as establishing a
measure of damage therein. 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 or his dependents, the
liability of the employer under this statute
thereupon shall be only such as is hereinafter
in this section provided. . . .
[
N.J.S.A. 34:15-40 (emphasis added).]
The language of the statute does not exempt any portion of the
recovery from the lien. Rather, the lien attaches to "any sum"
recovered from the third party. It is well-settled that if the
language of a statute is clear on its face, the sole function of
the court is enforce it according to its terms.
Hubbard v. Reed,
___ N.J. ___, ___ (June 21, 2001).
In
Bello v. Comm'r, Dept. of Labor and Indus.,
56 N.J. 41
(1970), the Supreme Court construed this statutory language. The
Court considered whether the Two Percent Fund was entitled to
reimbursement and credit out of a third party recovery by an
injured worker.
Id. at 43. Part of the damages in the third party
recovery were for pain and suffering. The Supreme Court held that
the Two Percent Fund was not limited to items which were identified
as being compensable.
Id. at 50. Rather, the lien should attach
to the entire recovery.
Id. at 50-51. The Court reasoned that the
Legislature intended that the reimbursement be drawn from the
entire third party recovery because of the use of the term "in any
amount."
Id. at 47. Otherwise, the Court concluded, the
Legislature would have used more limiting language in describing
the type of recovery to which a lien would attach.
Ibid.
As such, the trial court was erroneous to limit the City's
lien to the amount of the wrongful death recovery allocated to lost
wages damages. Accordingly, we conclude that the City's lien
attaches to the entire amount of the wrongful death award paid to
Heidi.
III
The City also contends that its lien should attach to the
survival claim settlement. We disagree. It is clear, pursuant to
N.J.S.A. 34:15-4, that an employer's lien for dependency benefits
is limited to third party recoveries in wrongful death actions.
That section of the statute provides that:
Death of employee
The provisions of this article shall
apply to any claim for the death of an
employee arising under sections 2A:31-1 to
2A:31-6 of the New Jersey Statutes.
[
N.J.S.A. 34:15-4.]
A survival action claim clearly does not arise under
N.J.S.A.
2A:31-1
to -6.
Moreover, a survival claim is the decedent's own for "damages
accrued during the lifetime of the decedent," which is prosecuted
by a personal representative.
N.J.S.A. 2A:15-3. Here, the
survival claim is for the pain and suffering that DeLane
experienced from the time of the first electrocution until his
death.
Ryan v Pub. Serv. R.R. Co.,
103 N.J.L. 145 (1926).
Obviously, DeLane did not file a workers' compensation claim
petition for his injury nor did he receive any temporary or
permanent disability benefits himself. If he had survived and
received such benefits, there is no doubt that, pursuant to
N.J.S.A. 34:15-40, the City's lien for such benefits would attach
to his recovery for his pain and suffering. However, that is not
the case. DeLane did not receive any such benefits. Therefore,
the City has no lien against his estate.
Roberts v. All Am. Eng'g
Co.,
104 N.J. Super. 1, 9 (App. Div. 1968),
certif. denied,
53 N.J. 531 (1969). There is one exception to this holding, in the event
that DeLane's emergency room expenses were paid by the City, as a
workers' compensation medical payment benefit, then the City has a
lien for such medical payment only. This lien would attach to the
survival claim settlement.
In
Roberts, the decedent had received workers' compensation
benefits from his employer for an injury sustained on the job.
Id.
at 4. He also recovered a settlement from a third party
tortfeasor.
Id. at 5. The employer's lien was paid from the third
party recovery.
Ibid. Several years later, after decedent's death
as a result of a worsening of the work-related injury, his widow
and children sought dependency benefits from the employer pursuant
to
N.J.S.A. 34:15-13.
Ibid. The employer asserted full discharge
from liability to the widow because the decedent's third party
recovery exceeded the dependency benefits.
Id. at 5-6. We held
that because the widow had no legal rights in the fund created by
her husband's individual third party action, the employer had no
right to be subrogated to this fund for reimbursement of the
dependancy benefits.
Id. at 9. The employer's lien was limited to
the benefits paid to the decedent in his claim petition.
Ibid.
Here, no benefits were paid to DeLane. The City argues that
Heidi is in the shoes of her deceased husband by virtue of
N.J.S.A.
2A:15-3 and that, therefore, the City's lien should to attach to
the survival claim recovery. Not so. It is a mere coincidence
that DeLane's personal representative and heir is also the
recipient of the dependency workers' compensation benefits. That
coincidence has no legal significance in the context of
N.J.S.A.
34:15-40. Heidi, as an individual, has not recovered any damages
for DeLane's pain and suffering. Accordingly, we conclude that
the City's lien does not attach to the survival claim recovery.
IV
On cross-appeal, plaintiff, as Administratrix of the Estate,
contends that the judge's "decision to grant [the City's] summary
judgment motion was based on an erroneous reading of the
substantial certainty exception to the workers' compensation
exclusive remedy." We disagree. At the outset, we note that there
is no "substantial certainty" exception.
New Jersey's workers' compensation statute contains an
exclusive remedy provision that precludes employees from
maintaining separate tort actions against their employers.
N.J.S.A. 34:15-8 provides:
[i]f an injury or death is compensable under
this article, a person shall not be liable to
anyone at common law or otherwise on account
of such injury or death for any act or
omission occurring while such person was in
the same employ as the person injured or
killed, except for intentional wrong.
Therefore, a separate tort action is allowed only when the employer
committed an intentional wrong which requires actual intent or a
"substantial certainty" that injury will occur as a result of its
actions.
Millison v. E.I. du Pont de Nemours & Co.,
101 N.J. 161,
177-78 (1985). Plaintiff is not arguing that the City acted
intentionally, but rather, that its deliberate disregard of a known
harm created a substantial certainty that DeLane would be
electrocuted. For this reason, she contends that the City's
conduct falls within the intentional wrong exception and,
therefore, summary judgment was improperly granted.
Plaintiff points to a number of facts to demonstrate that the
City deliberately disregarded a known harm which, in turn, would
create a substantial certainty that DeLane would be electrocuted.
Plaintiff asserts that it was common practice within the City's
Fire Department to violate federal and state laws governing
electrical hazards. Captain Paynter testified that ladders were
raised "even if not needed" and in close proximity to high voltage
wires hundreds of times. In training, the City's firefighters are
not informed of the "10 foot rule," a federal law regarding
proximity limitations to high voltage wires. Further, the Division
of Fire Safety Investigation concluded that the City had violated
safety statutes including: (1) the non-production of written,
standard operating procedures concerning electrical hazards which
constitutes a violation of New Jersey's Public Employees
Occupational Safety and Health Administration (PEOSHA) and federal
Occupational Safety and Health Administration (OSHA) regulations;
(2) lack of specialized training for electrical hazards; and (3)
non-availability of information about crucial safety regulations.
For these reasons, plaintiff argues that the City made a deliberate
decision to ignore a known harm in the face of a substantial
certainty of DeLane's electrocution.
In
Millison, the Supreme Court defined intentional wrong as a
deliberate intent to injure, provable either by evidence of an
actual subjective intent to injure or by proof of circumstances
making it substantially certain to the actor that deleterious
consequences will result from his action.
Millison,
supra, 101
N.J. at 178;
see also N.J. Mfrs. Ins. v. Joseph Oat Corp.,
287 N.J.
Super. 190, 194-197 (App. Div. 1995). We stress that
Millison did
not change the intentional wrong standard, it merely clarified the
manners in which it could be proven.
The Supreme Court stated that [i]n order to satisfy the
Compensation Act's definition of 'intentional wrong', claimants
have heretofore been required to show a deliberate intent to
injure."
Id. at 170 (citing
Bryan v. Jeffers,
103 N.J. Super. 522,
523-24 (App. Div. 1968),
certif. denied,
53 N.J. 581 (1969)(holding
that 'intentional wrong' in the compensation statute means
"deliberate intention" and is not equitable with gross negligence
or similar concepts importing constructive intent)). The Supreme
Court went on to emphasize how narrowly limited the exception is to
be construed by citing Professor Larson's treatise on Workers'
Compensation Law:
Even if the alleged conduct goes beyond
aggravated negligence, and includes such
elements as knowingly permitting a hazardous
work condition to exist, knowingly ordering
claimant to perform an extremely dangerous
job, willfully failing to furnish a safe place
to work, or even willfully and unlawfully
violating a safety statute, this still falls
short of the kind of actual intention to
injure that robs the injury of accidental
character.
[
Id. at 171; (citing, 2A
A. Larson, The Law of
Workmen's Compensation, § 68.13 at 13-22 to
13-27 (1983)).]
The Court in
Millison sought to delineate a standard by which
it may be determined what exactly amounted to an 'intentional
wrong' to overcome the exclusivity provision. The Court adopted a
'substantial certainty' test which requires, in an intentional
wrong case, a virtual certainty that the consequences would occur.
Id. at 178. The Supreme Court pointed to two factors that further
define the meaning of "deliberate intention to injure;" namely,
conduct and context.
Millison,
supra, 101
N.J. at 178-79. For
"conduct," the Court adopted a "substantial certainty" test.
Id.
at 178. There is only one level of intent sufficient to meet the
"substantial certainty" test to overcome the exclusivity provision,
and "[b]oth subjective intent and substantial certainty of harm are
expressive of the same standard,
i.e. deliberate intent to harm."
N.J. Mfrs. Ins. Co.,
supra, 287
N.J. Super. at 197. In considering
"context," the
Millison Court posed this query: "may the resulting
injury or disease, and the circumstances in which it is inflicted
on the worker, fairly be viewed as a fact of life of industrial
employment, or is it rather plainly beyond anything the Legislature
could have contemplated as entitling the employee to recover
only
under the Compensation Act?"
Millison,
supra, 101
N.J. at 179.
Compare
McGovern v. Resorts Int'l Hotel,
306 N.J. Super. 174,
176 (App. Div. 1997), wherein a casino employee was shot while
trying to prevent the robbery of money from a cart she was
transferring to an armored car. Defendant employer had received
multiple complaints and was, therefore, well aware of the danger
implicit in removing the money through the public area.
Ibid.
Plaintiff argued, against defendant's motion for summary judgment,
that defendant had knowledge of a substantial likelihood of injury.
Ibid. In granting summary judgment to defendant, the trial court
stated that the plaintiff failed to satisfy
N.J.S.A. 34:15-8's
definition of "intentional wrong".
Id. at 179. We affirmed. No
"deliberate intent to injure" had been demonstrated -- awareness of
a substantial likelihood of injury was insufficient.
Ibid. The
facts indicate[d] negligence or, at most, recklessness on the part
of [the defendant], and not a deliberate intention to harm its
employees. An employer's knowledge and appreciation of a
significant risk does not constitute the requisite intent needed to
circumvent the Workers' Compensation statute."
Id. at 181.
Further, in
Marinelli v. Mitts & Merrill,
303 N.J. Super. 61
(App. Div. 1997), it was held that the employer's failure to inform
its employees of the explosive nature of its hair spray product,
demonstrated only negligence, not an intentional act, in causing a
workplace explosion. The court refused to find an intentional act
despite the employer's alleged awareness that punctured hair spray
cans had caused an explosion at another facility, and despite
warnings from workers and the Occupational Safety and Health
Administration about the dangers of shredding hair spray cans.
Therefore, the personal injury claims brought by employees injured
in the explosion did not fall within the intentional injury
exception to workers' compensation immunity.
Here, viewing the record in the light most favorable to
plaintiff, we agree with the judge that the conduct of some of the
City's employees, albeit reckless, does not satisfy the intentional
wrong standard. Summary judgment was properly granted to the City
on this issue. Moreover, assuming that the conduct of the City's
employees were deemed an intentional wrong, we agree with the trial
judge that the City would be immune from liability pursuant to
N.J.S.A. 59:2-10.
We also conclude that plaintiff's other contention on cross-
appeal that the City waived any claim or defense as to the
reasonableness of the settlement allocation is clearly without
merit and an opinion would have no precedential value.
R. 2:11-
3(e)(1)(E).
In summary, the October 7, 1998 order that granted summary
judgment to the City is affirmed. The portion of the November 16,
1999 order limiting the City's lien to $64,466 to be paid only from
the lost wages portion of the wrongful death settlement is
reversed. The portion of the November 16, 1999 order which
provides that the City "shall have no right to assert a lien and/or
any right of repayment under
N.J.S.A. 34:15-40" against the
survival claim recovery is affirmed.
Footnote: 1 1The workers' compensation lien is substantially larger.
Heidi will receive a dependency benefit for 450 weeks at $447.90
per week, an estimated total of approximately $201,555 plus
$47.90 per week, throughout the rest of the period of her
widowhood, pursuant to N.J.S.A. 34:15-13.