Title: Sperling v. Board of Review

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(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). 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. 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. 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). 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. 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). 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 MARK SPERLING, Claimant-Appellant, v. BOARD OF REVIEW, Respondent-Respondent. DECIDED