y
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in
the interests of brevity, portions of any opinion may not have been summarized).
(NOTE: The Court wrote no full opinion in this case. Rather, the Court's affirmance is based substantially for the reasons expressed in Judge Baime's opinion below.)
Argued September 28, 1998 -- Decided December 11, 1998
PER CURIAM
The issue in this appeal is whether one who has collected a lump settlement of his workers' compensation
claim under N.J.S.A. 34:15-20 is barred from receiving temporary disability benefits for those same injuries.
Mark Sperling was injured in an automobile accident on November 2, 1992, while driving to a prospective
customer's office. As a result of those injuries, Sperling left work on December 9, 1992, and remained out through
July 1, 1993, when he was medically approved to return to work. In the interim, however, he had been terminated
from his employment.
Sperling filed a petition for workers' compensation, which was ultimately settled for a lump sum of $1,500
under N.J.S.A. 34:15-20. He subsequently applied to the Division of Temporary Disability Insurance for disability
benefits. However, the Division found him ineligible to receive disability benefits because he had received a
workers' compensation award for the same disability during the same period.
On appeal, a majority of the Appellate Division found that the Legislature clearly intended a lump sum
settlement to preclude a claim for temporary disability benefits. It therefore affirmed the Division's denial of
disability benefits to Sperling. The Appellate Division further found that the language in N.J.S.A. 43:31-30 of the
Temporary Disability Benefits Law limiting consideration of lump sum settlements to insurance rating purposes
pertains only to the calculation of premium rates and was not intended to contravene the strong legislative policy
against duplication of benefits set forth in both the Temporary Disability Benefits Law and the Workers'
Compensation Act.
The dissenting member of the Appellate Division considered Sperling's lump sum settlement to represent
a nuisance settlement for a non-work related accident and believed that if a claimant proves his disability and
entitlement to benefits for a period that is longer than the compensation he received would cover, he is then
entitled to State Temporary Disability for the additional period not covered by Workers' Compensation.
The appeal is before the Supreme Court as of right because of the dissent.
HELD: The judgment of the Appellate Division is affirmed, substantially for the reasons expressed in the opinion
below. Sperling's settlement under the Workers' Compensation Act constituted an implied acknowledgment that
his disability was work-related and therefore compensable under that Act. His claim for temporary disability
benefits is therefore barred.
JUSTICE STEIN filed a separate opinion concurring in the Court's decision, viewing that decision as not
resolving the question whether a worker whose workers' compensation settlement is less than the amount of
temporary disability benefits received prior to the settlement nevertheless is obligated to reimburse the Division in
full.
JUSTICE O'HERN filed a separate dissenting opinion in which he essentially agreed with the Appellate
Division dissent. Justice O'Hern further believed that the Court incorrectly dismissed a meritorious claim on the
basis of the sequence of the claims filed by Sperling.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, GARIBALDI and COLEMAN join in
the Court's opinion. JUSTICE STEIN filed a separate concurring opinion. JUSTICE O'HERN filed a separate
dissenting opinion.
SUPREME COURT OF NEW JERSEY
A-
153 September Term 1997
MARK SPERLING,
Claimant-Appellant,
v.
BOARD OF REVIEW,
Respondent-Respondent.
Argued September 28, 1998 -- Decided December 11, 1998
On appeal from the Superior Court, Appellate
Division, whose opinion is reported at
301 N.J. Super. 1 (1997).
Antranig Aslanian, Jr., argued the cause for
appellant (Aslanian & Khorozian, attorneys;
Mark Sperling, pro se on the brief).
Andrea R. Grundfest, Deputy Attorney General,
argued the cause for respondent (Peter
Verniero, Attorney General of New Jersey,
attorney; Joseph L. Yannotti, Assistant
Attorney General, of counsel).
PER CURIAM
The judgment is affirmed, substantially for the reasons
expressed in Judge Baime's opinion of the Appellate Division,
reported at
301 N.J. Super. 1 (1997).
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK,
GARIBALDI and COLEMAN join in the Court's opinion. JUSTICE STEIN
filed a separate concurring opinion. JUSTICE O'HERN filed a
separate dissenting opinion.
SUPREME COURT OF NEW JERSEY
A-
153 September Term 1997
MARK SPERLING,
Claimant-Appellant,
v.
BOARD OF REVIEW,
Respondent-Respondent.
STEIN, J., concurring.
The Court affirms the judgment below on the basis of the
Appellate Division's majority opinion. ___ N.J. Super. ___
(1998). I join in the Court's disposition but write briefly to
identify a collateral issue, raised at oral argument, that the
Court's disposition does not purport to resolve.
Petitioner sustained personal injuries under circumstances
in which his right to compensation under the Workers'
Compensation Act, N.J.S.A. 34:15-1 to -128, was "in a twilight
zone, with liability under the compensation law doubtful and
dependent on the outcome of contested proceedings." Janovsky v.
American Motorists Ins. Co.,
11 N.J. 1, 5 (1952). In such
circumstances, petitioner would have been entitled to receive
temporary disability benefits pending resolution of his workers'
compensation claim. See N.J.S.A. 43:21-30; Janovsky, supra, 11
N.J. at 5.
Petitioner testified that he applied to the Division of
Temporary Disability Insurance (Division) for disability
benefits, but the Division had no record of his claim and so
informed him. Subsequently, he settled his compensation claim
pursuant to N.J.S.A. 34:15-20 for $1500, of which $500 was
allocated to counsel fees. Thereafter, he reapplied to the
Division for temporary disability benefits, but the Division
determined that he was ineligible because he had received a
workers' compensation award for the same disability. A divided
panel of the Appellate Division affirmed the Division's denial of
benefits, holding that the receipt of benefits under the Workers'
Compensation Act and the Temporary Disability Benefits Law,
N.J.S.A. 43:21-25 to -56, for the same injury is impermissible.
Before us, petitioner's counsel argued for reversal on the
theory that if petitioner had in fact received temporary
disability benefits from May 1993, when he allegedly applied,
until October 1994 when his workers' compensation claim was
settled for a nominal sum, the Division's right of subrogation
would be limited to the amount of the compensation award. In
that circumstance, because petitioner's temporary disability
benefits would substantially exceed the compensation award,
petitioner would receive benefits under both statutes for the
same injury. Accordingly, petitioner argued that an award
subsequent to the compensation settlement of temporary disability
benefits for the same period in which petitioner would have been
eligible to receive them prior to the settlement would not
contravene the legislative plan. Petitioner emphasized that
where the compensation settlement is nominal, reflecting the
weakness of the compensation claim, a requirement that the worker
fully reimburse the Division for temporary disability benefits
substantially in excess of the compensation settlement would be
self-defeating, because workers would be reluctant to agree to
settle compensation claims if the settlement would generate a
liability in excess of the amount received.
The Attorney General, representing the Board of Review,
disagreed, contending that the statute required full
reimbursement of temporary disability benefits by a worker who
settles a compensation claim irrespective of the disparity
between the benefits paid and the amount of the workers'
compensation settlement. Subsequent to oral argument the
Attorney General informed the Court that the Division has issued
an Administrative Instruction directing that claimants be
permitted to retain temporary disability benefits paid prior to a
Section 20 settlement of a workers' compensation claim, to the
extent such benefits exceed the settlement. The Attorney General
has advised the Division to withdraw that portion of the
Administrative Instruction, believing it to be contrary to law.
Because petitioner had not received temporary disability
benefits prior to settling his workers' compensation claim, my
view of the Court's disposition is that it does not resolve the
question whether a worker whose workers' compensation settlement
is less than the amount of temporary disability benefits received
prior to the settlement nevertheless is obligated to reimburse
the Division in full. Without expressing any final view on that
issue, I note that there appears to be a substantial basis for
the view that the Division's right of recovery would be limited
to the amount of the compensation settlement. See N.J.S.A.
43:21-30 ("In the event that workmen's compensation benefits . .
. are subsequently awarded for weeks with respect to which the
claimant has received disability benefits . . . , the State fund
. . . shall be entitled to be subrogated to such claimant's
rights in such award to the extent of the amount of disability
payments made hereunder.")(emphasis added). See also Statement
to A. 216 (L. 1967, c. 306) ("There is ample provision under this
section . . . for subrogation and repayment from a subsequent
workmen's compensation award to preclude double benefits.").
Based on my understanding of the limited scope of the
Court's affirmance, I concur in the Court's disposition of this
appeal.
SUPREME COURT OF NEW JERSEY
A-
153 September Term 1997
MARK SPERLING,
Claimant-Appellant,
v.
BOARD OF REVIEW,
Respondent-Respondent.
O'HERN, J., concurring in part and dissenting in part.
I concur with Justice Stein's understanding of the limited
breadth of the Court's judgment. Ante at ___ (slip op. at 4).
One who suffers an injury between work and everyday affairs may seek temporary disability benefits while recovering from the injury under either the Workers' Compensation Act, N.J.S.A. 34:15-1 to -128 (comp), or the Temporary Disability Benefits Law, N.J.S.A. 43:21-25 to -56 (benefits law). If a workers' compensation carrier denies coverage on the basis that the injury is not work related, a claimant may commence an action immediately to receive benefits under the benefits law. The Department of Labor's appeal tribunal in this case quoted Janovsky v. American Motorists Insurance Co., 11 N.J. 1, 5 (1952), in which the Court explained:
If . . . the occurrence is in a twilight zone, with liability under the compensation law doubtful and dependent on the outcome of contested proceedings . . . , immediate payment to help tide the worker over during his inability to work should be permissible and, indeed, readily available, under the benefits law, with full reimbursement from any award subsequently rendered in the compensation proceeding.
Let us assume that such a "twilight zone" dispute continues
for six months or more in the Workers' Compensation court, during
which time the worker has recovered temporary disability
benefits. Assume, further, that in a contested proceeding the
Workers' Compensation court decided that the worker was entitled
to only one month of temporary disability benefits on account of
a work-related injury, and that any other disability was
attributable to other causes that were not work related. In that
setting, N.J.S.A. 43:21-30 provides that the benefits plan would
be entitled "to such claimant's rights in such award." Because
the "claimant's rights" in workers' comp were less than the
temporary disability award, the benefits plan would simply
recover to the extent of the comp award, but not recover in full
from the worker all the disability benefits received. The Court
does not disagree with that interpretation of N.J.S.A. 43:21-30.
My disagreement with the Court concerns its conclusion that because of the timing of events in this case, the result should be different. It is most unusual for this Court to dismiss a meritorious claim on the basis of the sequence of claims. Heretofore, we have molded the procedures governing management of two parallel benefit programs to the requirements of fairness and justice with the overarching goal that there should be no double recovery. See Riccio v. Prudential Property & Cas. Ins. Co., 108 N.J. 493, 504 (1987) (discussing pursuit of tort claims in court and insurance claims in arbitration and observing that the essential purpose of the relevant laws is "to make the victim whole, but not provide a windfall or to allow a double recovery"); see also Parks v. Colonial Penn Ins. Co., 98 N.J. 42, 49-51 (1984) (molding procedures for management of automobile-reparation claims in two forums, judicial and arbitral). Each forum must respect the rights of the claimant in the other forum. See Hetherington v. Briarwood Coachlight, 253 N.J. Super. 484, 489-90 (App. Div. 1992) (holding workers' compensation judge was without authority to force PIP carrier to accept settlement of its own right to be reimbursed for disability benefits claimed for automobile accident injury).
In its disposition, the Court makes no reference to the fairness of the procedures. No one could have foreseen that the settlement of a patently unmeritorious workers' compensation claim would translate into a settlement of the meritorious temporary disability claim. This is an example of a "trap for the unsuspecting," a school of jurisprudence so recently condemned by Justice Stein in his dissent in Oliver v. Ambrose, 152 N.J. 387, 407 (1998) (quoting Cafferata v. Peyser, 251 N.J. Super. 256, 263 (App. Div. 1991)).
The language of neither governing statute supports the position taken by the Court. N.J.S.A. 34:15-20 states that when parties have consented to a comp settlement, the settlement
shall have the force and effect of a dismissal of the claim petition and shall be final and conclusive . . . and shall be a complete surrender of any right to compensation or other benefits arising out of such claim under the statute. Any payments made under this section shall be recognized as payments of workers' compensation benefits for insurance rating purposes only.
The Court converts that adjudication of "dismissal" into an
adjudication that the disabled person's only benefits are in
workers' comp, a paradox to say the least. After settlement,
N.J.S.A. 43:21-30 simply entitles the benefits plan to
reimbursement for the "claimant's rights" in the award. It does
not disqualify one for having sought benefits that proved to be
unavailable. Because there was no determination that the injury
was work related (in fact, there was an adjudication of
"dismissal"), this disabled claimant is entitled to disability
benefits attributable to his non-work-related injury.
A close analogy is to the judicial administration of
parallel claims for automobile accident reparations under tort
and underinsured motorist (UIM) regimes. In that setting we have
ruled that subject to Longworth noticeSee footnote 1 being given, the UIM
benefits provider is bound by judicial disposition of the tort
claim. Zirger v. General Accident Ins. Co.,
144 N.J. 327, 342
(1996). Although the procedures here lack the formality of
Longworth notice, the Division was aware that a comp claim was
pending. If the Court finds the procedures for notice lacking,
we should explain, as we did in Rutgers Casualty Insurance Co. v.
Vassas,
139 N.J. 163, 171-74 (1995), how the procedures may be
improved. The Division seems to insist that the injured party
engage in an exercise in futility. The Division would require
full pursuit of the comp claim before it will pay disability
benefits. This reasoning is flawed for two reasons. First, this
requirement is inconsistent with Janovsky, which advocates
payment of temporary disability payments to a worker while a comp
claim is pending. Janovsky, supra, 11 N.J. at 5. Second, the
Division's position fails to recognize that an injury or illness
may not be clearly work related. For the Division there is only
night or day, not twilight.
Finally, the Court fails to explain what point there is in
forcing one such as Sperling to try his case to an unsuccessful
conclusion. He was on a purely personal errand when the accident
occurred. We generally try to avoid "unnecessary court events."
State v. Shaw,
131 N.J. 1, 13 (1993).
To read the transcripts of the hearings at which the injured worker first represented himself is to experience the same futile "Kafkaesque journey" as does a citizen who encounters an unreasoning bureaucracy. Rosen v. New Jersey Div. of Dev'l Disability, 256 N.J. Super. 629, 631 (App. Div. 1992). The Division misunderstands the legislative provisions. At the first hearing, the Division representative interpreted N.J.S.A. 43:21-30 to mean that no temporary disability benefits may be paid if the injured party receives any other disability or sickness benefits. It is quite obvious to even the most casual reader of its title that N.J.S.A. 43:21-30 intends to avoid double recovery, not full recovery. Although no specific offset provision exists, the purpose of the law demonstrates that recovery for temporary disability and workers' comp is not mutually exclusive. The title to N.J.S.A. 43:21-30 is "Nonduplication of benefits," not "Election of benefits."
The historical notes to N.J.S.A. 43:21-25 recite that the benefits law is designed "to provide for the payment of disability benefits to certain persons with respect to accident and sickness not compensable under the [comp] law." The purpose of the act includes "fill[ing] the gap in existing provisions for protection against the loss of earnings caused by involuntary unemployment, by extending such protection to meet the hazard of earnings loss due to inability to work caused by nonoccupational sickness or accident." N.J.S.A. 43:21-26.
When a Division representative was asked to explain at the second hearing why Sperling's disability claim was denied, he responded as follows:
A. We issued our denial because the State has no legal basis to pay the claimant since there is no claim petition for us to file a lien against.
Q. Okay, just a minute. And that's why you
made the determination that you made?
A. That is correct.
A. We must go by what we had on the claim
form originally.
It does not matter to the Division what the settlement
represents once a claimant has indicated that there might be a
"twilight zone" claim. Paradoxically, the Division acknowledged
that if the worker had tried his case and received no award, he
would have received the benefits. "Under those circumstances, we
would have paid him without a lien since it would not be
considered [w]orkers' [c]ompensation." Better, the Division
reasons, that it should receive nothing, than to receive a
partial reimbursement for that part of the disability that is
work related.
In addition to misinterpreting the statute, the Division has
also misinterpreted this Court's decision in Janovsky, supra.
The appeal tribunal believes that The Court in Janovsky "clearly
states that 'any award' from [worker's] [c]ompensation negates
payment of State disability." Nothing could be further from the
truth. In Janovsky, the Court simply explained "the overriding
legislative plan and its practical operation." Janovsky, supra,
11 N.J. at 5. The Court's reference to "any award" simply
signifies that when the benefits are paid to a worker there
should be "full reimbursement [to the plan] from any award
subsequently rendered in the compensation proceeding." Ibid.
(emphasis added). That is not a disqualification from benefits.
N.J.S.A. 41:21-30 prohibits duplication of benefits but does not
mandate that receipt of workers' comp and temporary disability
benefits is mutually exclusive.
Prudential Insurance Co. v. New Jersey Division of
Employment Security,
75 N.J. Super. 430, 431 (1962), does not
dictate a contrary result. In that case an award was erroneously
made under the Title 43 benefits plan for a period of temporary
disability during which a comp award was paid for an increase in
permanent disability. The two plans were "mutually exclusive,"
id. at 435, only in the sense that one is not entitled to Title
43 disability benefits for periods of disability for which Title
34 comp awards are payable. That, however, is not the case here.
This Court once said that "justice is the polestar of our
system" and that "our procedures must ever be moulded and applied
with that in mind." New Jersey Highway Auth. v. Renner,
18 N.J. 485, 495 (1955). Like the Division, the Court appears to be
indifferent to whether justice is done or whether the procedures
are fair. Instead, the Court accepts the unfounded reasoning of
the Division that the Division cannot pay benefits unless "there
is [a] claim petition for us to file a lien again[st]."
When Sperling entered into the $1500 settlement under
N.J.S.A. 34:15-20, he gave up forever his rights in comp to
reopen his case for two years if his condition worsened. It is
unfair to assume that Sperling intended to waive between $6000
and $8000 in temporary disability benefits in favor of the $1500
settlement. Sperling explained that his counsel in the
proceedings was misinformed about the status of his case.
Sperling stated that his attorney "was under the impression that
[he] had already received [temporary] disability payments for the
time that [he] was out of work." As noted by Judge Shebell in
his dissent, the $1500 "represents only a nuisance settlement for
a non-work-related accident with the claimant receiving only
$1000 after counsel fees."
301 N.J. Super. 1, 6 (1997). Judge
Shebell correctly characterizes the spirit and letter of N.J.S.A.
43:21-30 in stating, "[i]f the claimant proves his disability and
entitlement to benefits for a period that is longer than the
compensation he received would cover, he is then entitled to
[temporary disability benefits] for the additional period not
covered by [comp]." Ibid.
At oral argument, counsel for the Board of Review candidly
acknowledged that the procedures in each forum should be
improved. She said, "There does need to be, whether from this
Court or from an administrative source, such as on the form of
the [comp] order itself, some kind of declaration" that a worker
who makes any settlement of a comp claim not only is disqualified
from temporary disability benefits under Title 43, but also must
reimburse the disability benefits fund even though the disability
may be non-work-related. The Division's counsel favored a
requirement that the worker receive a clear explanation to that
effect. Such, she said, is an "excellent idea" and one that
should be "endorsed by the Court." At least that procedural
improvement would eliminate a "trap for the unsuspecting" worker.
NO. A-153 SEPTEMBER TERM 1997
ON APPEAL FROM Appellate Division, Superior Court
ON CERTIFICATION TO
MARK SPERLING,
Claimant-Appellant,
v.
BOARD OF REVIEW,
Respondent-Respondent.
DECIDED December 11, 1998
Chief Justice Poritz PRESIDING
OPINION BY PER CURIAM
CONCURRING OPINION BY Justice Stein
CONCURRING/DISSENTING OPINION BY Justice O'Hern
Footnote: 1Under Longworth v. Van Houten, 223 N.J. Super. 174, 194 (App. Div. 1988), upon receiving an acceptable settlement offer from the tortfeasor, the insured must notify the carrier. The carrier may promptly (presumptively within 30 days) offer its insured the amount in exchange for the insured assigning the claim against the tortfeasor to the carrier. Ibid.