NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1073-14T3

 A-3040-14T1

 A-3107-14T1

JENNIFER LAMBERT and

GARY LAMBERT,

Plaintiffs-Respondents,

v.

TRAVELERS INDEMNITY COMPANY OF

AMERICA,

Defendant-Appellant.

_______________________________

PAUL REED,

Plaintiff-Respondent,

v. 

QUAL-LYNX and TOWNSHIP OF 

MARLBORO,

Defendants,

and

MONMOUTH MUNICIPAL JOINT 

INSURANCE FUND,

1

Defendant-Appellant.

_______________________________

 

1 This party was incorrectly designated as "Monmouth County Joint

Insurance Fund" in both the Reed and Agar complaints.

APPROVED FOR PUBLICATION

August 24, 2016

APPELLATE DIVISION
2 A-1073-14T3

WILLIAM AGAR,

Plaintiff-Respondent,

v. 

QUAL-LYNX and TOWNSHIP OF 

HAZLET, 

Defendants,

and

MONMOUTH MUNICIPAL JOINT 

INSURANCE FUND,

Defendant-Appellant.

_______________________________

Argued June 2, 2016 - Decided

Before Judges Koblitz, Kennedy and Gilson.

On appeal from Superior Court of New Jersey, 

Law Division, Monmouth County, Docket Nos. 

L-2702-14, L-4610-14, and L-4911-14.

Jeffrey W. Mazzola argued the cause for 

appellant Travelers Indemnity Company of 

America (Law Offices of William E. Staehle, 

attorneys; Mr. Mazzola, on the brief).

Danielle Pantaleo argued the cause for 

appellant Monmouth Municipal Joint Insurance 

Fund (Cleary Giacobbe Alfieri Jacobs, LLC, 

attorneys; Ms. Pantaleo, on the brief). 

Richard N. Schibell argued the cause for 

respondents Jennifer Lambert and Gary 

Lambert (Schibell Mennie & Kentos, LLC,

attorneys; John G. Mennie, on the brief).

Michael J. Hanus argued the cause for

respondents Paul Reed and William Agar (Mr. 

August 24, 2016
3 A-1073-14T3

Hanus, attorney; Richard T. Smith, on the 

brief).

Daniel A. Levy argued the cause for amicus 

curiae New Jersey Association for JusticeNew Jersey (Raff & Raff, LLP, attorneys; Mr. 

Levy, on the brief).

Gibson Kolb, attorneys for amicus curiae The 

National Association of Subrogation 

Professionals (Rachael E. Banks, of counsel 

and on the brief).

The opinion of the court was delivered by

GILSON, J.A.D.

These appeals2 present the same legal questions: Is a 

worker, who is injured in a work-related motor vehicle accident, 

permitted to recover medical expenses from a tortfeasor if those 

medical expenses are paid by the workers' compensation insurer 

as distinguished from personal injury protection (PIP) benefits 

paid by the worker's automobile liability insurer? If so, is 

the workers' compensation insurer entitled to recover the 

medical expenses from the proceeds of any recovery the worker 

obtains from the third-party tortfeasor?

The motion judge ruled that the workers' compensation 

insurers were not entitled to recover the medical expenses 

because the injured workers were not entitled to recover such 

 

2 We write one opinion to dispose of both the consolidated 

appeal, A-3040-14 and A-3107-14, and the separate appeal, A1073-14.
4 A-1073-14T3

expenses from the tortfeasors under N.J.S.A. 39:6A-12, which 

bars evidence in an action against the tortfeasor of amounts 

"collectible or paid" under PIP coverage. Thus, the motion 

judge reasoned that the injured workers were limited by the nofault system established by the Automobile Insurance Cost 

Reduction Act (AICRA), N.J.S.A. 39:6A-1.1 to -35, that the 

workers' compensation insurer effectively stepped into the shoes 

of the automobile insurer, and that the normal recovery 

provisions of the Workers' Compensation Act (WCA), N.J.S.A.

34:15-1 to -142, did not apply.

We reject that interpretation of the interplay between 

AICRA and the WCA, and hold that when a worker is injured in the 

course of his or her employment in a motor vehicle accident and 

workers' compensation coverage is available, the right of the 

injured worker to pursue claims against the third-party 

tortfeasor and the right of the workers' compensation insurer to 

be reimbursed are governed by the WCA and not AICRA. 

Accordingly, the injured worker may recover medical expenses 

from the third-party tortfeasor and N.J.S.A. 39:6A-12 does not 

apply. The workers' compensation insurer, in turn, has a right 

to be reimbursed for the appropriate portion of the medical 

expenses it has already paid under N.J.S.A. 34:15-40 (Section 

40).
5 A-1073-14T3

I.

The three cases that give rise to these appeals all present 

similar material facts. First, each plaintiff was injured in a 

motor vehicle accident while working. Second, the applicable 

automobile insurance provided PIP coverage. Third, the medical 

expenses of each plaintiff were paid by his or her employer's 

workers' compensation insurer. Plaintiffs were also paid 

compensation benefits (also referred to as indemnity benefits) 

for such things as lost wages. Fourth, plaintiffs all sued the 

tortfeasors, and each of those suits was settled. In each case, 

plaintiff's recovery from the tortfeasor exceeded the payments 

he or she had received from the workers' compensation insurer. 

The settlements, however, apparently did not disclose whether 

the settlement payment included a payment for medical expenses. 

Fifth, each plaintiff offered to reimburse the workers' 

compensation insurer for the appropriate portion of the 

compensation benefits, but refused to reimburse the workers' 

compensation insurer for the medical expenses arguing he or she 

had not recovered medical expenses from the tortfeasor.

To put these similar material facts in context, we 

summarize the circumstances of the three plaintiffs involved in 

these appeals.
6 A-1073-14T3

Plaintiff Jennifer Lambert worked for the Howell Township 

Board of Education as a school bus aid. On August 6, 2010, 

Lambert was injured when an automobile driven by Kaitlin 

Antonaccio collided with the rear of the school bus in which 

Lambert was working. The Travelers Indemnity Company of America 

(Travelers) provided workers' compensation insurance to 

Lambert's employer. As a result of her injuries, Lambert filed 

a workers' compensation claim, and Travelers paid Lambert 

$94,705.22 for medical expenses and $54,695.87 for compensation 

benefits. 

Thereafter, Lambert sued Antonaccio. Ultimately that 

lawsuit settled, with Antonaccio paying Lambert $300,000. 

Following the settlement, Lambert's counsel offered to pay 

Travelers $35,713.91, which represented two-thirds of the 

compensation benefits of $54,695.87, minus statutory costs of 

$750. Counsel for Lambert, however, refused to pay any 

reimbursement for medical expenses. Travelers rejected that 

offer, and Lambert filed a complaint and an order to show cause 

seeking to extinguish Travelers' lien for medical expenses.

Plaintiff Paul Reed worked for the Township of Marlboro as 

a police officer. On August 19, 2011, Reed, while in the course 

of his employment, was redirecting traffic when he was struck by 

a car driven by Vladen Futernik. Marlboro has workers' 
7 A-1073-14T3

compensation insurance through Monmouth Municipal Joint 

Insurance Fund (MMJIF), which is a joint insurance fund for 

municipalities of Monmouth County organized under N.J.S.A.

40A:10-36. Defendant Qual-Lynx is MMJIF's third-party 

administrator for certain claims. Accordingly, Reed filed a 

workers' compensation claim, and MMJIF paid him $60,430.48 for 

medical expenses and $44,578.29 in compensation benefits.

Reed also filed a negligence action against Futernik, which 

later settled for $100,000. Reed also brought an underinsured 

motorist (UIM) claim against New Jersey Manufacturers Insurance 

Company, and that suit settled for $199,000. Thus, Reed's total 

recoveries against the third-party tortfeasor were $299,000.3

Counsel for Reed offered to reimburse MMJIF for its 

proportional share of the compensation benefits, but refused to 

reimburse any of the medical expenses. When MMJIF refused that 

offer, Reed filed a complaint and an order to show cause seeking 

to extinguish the medical portion of MMJIF's workers' 

compensation lien.

Plaintiff William Agar worked as a police officer for the 

Township of Hazlet. On June 26, 2011, Agar was sitting in his 

 

3 A recovery from an insurer that provides UIM coverage is "the 

functional equivalent of a recovery from the actual third-party 

tortfeasor." Frazier v. N.J. Mfrs. Ins. Co., 142 N.J. 590, 598 

(1995).
8 A-1073-14T3

patrol car overseeing road construction when his vehicle was 

rear-ended by a car driven by Ethel McCaffrey. MMJIF provides 

insurance for Hazlet, including workers' compensation insurance. 

Agar filed a claim for workers' compensation and was paid 

$4331.02 for medical expenses and $15,693 in compensation

benefits. 

Agar also filed a suit against McCaffrey and settled that 

action for a payment of $60,000. MMJIF asserted a lien against 

Agar's settlement and sought reimbursement for both the amounts 

it paid for compensation benefits and medical expenses. Counsel 

for Agar offered to reimburse MMJIF for the compensation

benefits, but refused to make any reimbursement for medical 

expenses. When the parties could not reach an accord, Agar 

filed a complaint and an order to show cause seeking to 

extinguish the portion of the lien that sought to recover the 

medical expenses.

The orders to show cause filed by the three plaintiffs were 

all heard by the same motion judge. In all three matters, the 

judge entered orders granting plaintiffs' applications to 

extinguish the portion of the workers' compensation lien seeking 

reimbursement of the medical expenses, relying on an unpublished 
9 A-1073-14T3

case.4 The judge reasoned that when a worker is injured in a 

motor vehicle accident during the course of employment, the 

worker is treated as a no-fault insured and, therefore, under 

N.J.S.A. 39:6A-12, any recovery from the tortfeasor cannot 

include medical expenses that had been paid by an insurer. The 

judge also reasoned that since the injured worker had no right 

to recover paid medical expenses from the tortfeasor, the 

workers' compensation insurer could not seek reimbursement of 

those medical expenses under Section 40 of the WCA.

The workers' compensation insurers (Travelers and MMJIF) 

appeal the orders that extinguished the medical expense portion 

of their liens under Section 40 of the WCA. Amicus curiae 

National Association of Subrogation Professionals filed a brief 

in support of the position of the workers' compensation 

insurers. Amicus Curiae New Jersey Association for Justice-New 

Jersey filed a brief in support of plaintiffs' position. We 

granted MMJIF's motion to consolidate the appeals filed in the 

Reed and Agar cases. We denied a motion to consolidate the 

Lambert appeal because that appeal had already been fully 

briefed when the motion was filed. We now issue this 

 

4 As the judge acknowledged, Rule 1:36-3 provides that, except 

for reasons which do not apply here, "no unpublished opinion 

shall be cited by any court." 
10 A-1073-14T3

consolidated opinion to address the legal issues raised in all 

three appeals. 

II.

The issues raised by these appeals concern the 

interpretation of the interplay between AICRA and the WCA. 

Therefore, we review these issues of law de novo. Farmers Mut. 

Fire Ins. Co. of Salem v. N.J. Prop.-Liab. Ins. Guar. Ass'n, 215 

N.J. 522, 535-36 (2013).

We hold that because workers' compensation benefits are the 

primary source of recovery for injuries suffered by employees in 

a work-related automobile accident, and PIP insurers are 

relieved from the obligation to pay medical expenses under 

N.J.S.A 39:6A-6, any recovery obtained by employees from thirdparty tortfeasors, whether through settlement, trial or 

otherwise, is subject to Section 40 liens under the WCA. We 

further hold that in any action by such employees against thirdparty tortfeasors, the evidential bar of N.J.S.A. 39:6A-12 does 

not apply. 

The statutes and case law support this holding. We 

therefore examine AICRA, the WCA, and the interplay between 

those two statutes. We also review the existing case law.
11 A-1073-14T3

A. AICRA

Since 1972, New Jersey has made "legislative efforts to 

control the rising cost of automobile insurance by placing 

restrictions on an accident victim's right to sue for 

noneconomic damages." DiProspero v. Penn, 183 N.J. 477, 485 

(2005). In 1998, the Legislature enacted AICRA "with a multipronged approach aimed at achieving the goals of containing

[automobile insurance] costs." Id. at 488. The goal of AICRA 

was to reduce the cost of automobile insurance by reducing the 

number of litigated claims. See James v. Torres, 354 N.J. 

Super. 586, 594 (App. Div. 2002), certif. denied, 175 N.J. 547 

(2003). AICRA expanded New Jersey's no-fault automobile 

insurance system by, among other things, requiring every 

automobile insurance policy to provide PIP benefits, "which 

guarantee 'without regard to fault,' medical expense coverage 

for the named insured" who suffers bodily injury in an 

automobile accident. Perrelli v. Pastorelle, 206 N.J. 193, 201 

(2011) (quoting Caviglia v. Royal Tours of Am., 178 N.J. 460, 

466 (2004)). AICRA accordingly prohibits an injured person from 

seeking to recover from a tortfeasor medical expenses already 

paid under PIP coverage from the injured person's own automobile 

insurer. N.J.S.A. 39:6A-12; see Bardis v. First Trenton Ins. 

Co., 199 N.J. 265, 279 (2009) (stating that the "injured person 
12 A-1073-14T3

who was the beneficiary of the PIP payments could not and should 

not recover from the tortfeasor the medical, hospital and other 

losses for which he [or she] had already been reimbursed" 

(quoting Cirelli v. Ohio Cas. Ins. Co., 72 N.J. 380, 387 

(1977))). Thus, N.J.S.A. 39:6A-12, which pre-dated AICRA, 

continues to preclude the introduction of "evidence of the 

amounts collectible or paid" by an automobile insurer under PIP 

coverage. In other words, N.J.S.A. 39:6A-12 precludes a 

plaintiff from recovering medical expenses already paid by a PIP

insurer.

B. The WCA

The WCA provides a "system of compensation for workers" 

injured in the course of their employment. Estate of Kotsovska 

ex rel. Kotsovska v. Liebman, 221 N.J. 568, 583-84 (2015) 

(quoting Fitzgerald v. Tom Coddington Stables, 186 N.J. 21, 31

(2006)). The WCA represents a "historic 'trade-off' whereby 

employees relinquish their right to pursue common-law remedies 

[against their employers] in exchange for prompt and automatic 

entitlement to benefits for work-related injuries." Laidlow v. 

Hariton Mach. Co., 170 N.J. 602, 605 (quoting Millison v. E.I. 

du Pont de Nemours & Co., 101 N.J. 161, 174 (1985)); see Tlumac 

v. High Bridge Stone, 187 N.J. 567, 573 (2006) (explaining that 

the WCA's "remedial purpose" is "to make benefits readily and 
13 A-1073-14T3

broadly available to injured workers through a non-complicated 

process"). While the WCA limits injured workers from suing 

their employers, it does not preclude suits against thirdpersons responsible for their injuries. See N.J.S.A. 34:15-40; 

Danesi v. Am. Mfrs. Mut. Ins. Co., 189 N.J. Super. 160, 162-66 

(App. Div.), certif. denied, 94 N.J. 544 (1983). 

N.J.S.A. 34:15-40 was enacted as a means of "regulating and 

marshaling the rights and responsibilities of the several 

parties concerned in compensation payments where" a worker's 

injuries are caused by a third-party. U.S. Cas. Co. v. Hercules 

Powder Co., 4 N.J. 157, 165 (1950). To overcome the inequity of 

a double recovery, the WCA provides that a workers' compensation 

insurer is entitled to repayment of "medical expenses incurred 

and compensation payments theretofore paid to the injured 

employee . . . less [the] employee's expenses of suit and 

attorney's fee." N.J.S.A. 34:15-40(b); see also Frazier, supra, 

142 N.J. at 597. N.J.S.A. 34:15-40(b) "imposes a lien in favor 

of the workers compensation carrier against the proceeds of a 

third-party recovery obtained by an injured worker." Raso v. 

Ross Steel Erectors, Inc., 319 N.J. Super. 373, 381 (App. Div.),

certif. denied, 161 N.J. 148 (1999). "The compensation lien is 

statutorily created and generally attaches to 'any sum'

recovered by the injured worker from a third-party, without 
14 A-1073-14T3

regard to such equitable considerations as whether the worker 

has been fully compensated." Primus v. Alfred Sanzari Enters., 

372 N.J. Super. 392, 400 (App. Div. 2004), certif. denied, 182 

N.J. 430 (2005).

C. The Interplay between AICRA and the WCA

When a worker suffers a work-related injury in a motor 

vehicle accident, workers' compensation coverage is the primary 

source of insurance under the collateral source rule. See

N.J.S.A. 39:6A-6. N.J.S.A. 39:6A-6 provides that "medical 

expense benefits . . . shall be payable as loss accrues, upon 

written notice of such loss and without regard to collateral 

sources, except that benefits, collectible under workers' 

compensation insurance . . . shall be deducted from the benefits 

collectible under [PIP]." N.J.S.A. 39:6A-6 "relieves the PIP 

carrier from the obligation of making payments for expenses 

incurred by the insured[, including medical expenses] which are 

covered by workers' compensation benefits." Lefkin v. 

Venturini, 229 N.J. Super. 1, 7 (App. Div. 1988).

The issues on these appeals turn on the interpretation of 

the interplay between AICRA and WCA. The question is: Did the 

Legislature intend N.J.S.A. 39:6A-6 to treat workers' 

compensation insurance like PIP automobile insurance or, did the 

Legislature intend that a worker injured in an automobile 
15 A-1073-14T3

accident be covered under the workers' compensation system

without regard to the no-fault provisions of AICRA? Given the 

language used in AICRA we conclude that AICRA did not displace 

the workers' compensation system.

The collateral source rule does not make workers' 

compensation insurance part of the PIP no-fault system; rather 

it shifts the burden of providing insurance from the automobile 

insurance system to the workers' compensation system. Thus, the 

collateral source rule states that "benefits[] collectible under 

workers' compensation insurance . . . shall be deducted from the 

benefits collectible under [N.J.S.A. 39:6A-4 and 39:6A-10], the 

medical expense benefits provided in [N.J.S.A. 39:6A-3.1] and 

the benefits provided in [N.J.S.A. 39:6A-3.3]." N.J.S.A. 39:6A6. Nothing in that language suggests that the Legislature 

intended to treat a worker injured in an automobile accident in 

a different manner than a worker injured in a non-automobile 

work-related accident. Just as important, nothing in that

statutory language suggests that the Legislature intended to 

treat a workers' compensation insurer as if it were an 

automobile insurer. 

Indeed, the statutory words "deducted from" are most 

clearly understood as shifting the insurance coverage from 

automobile insurance to workers' compensation insurance. 
16 A-1073-14T3

Moreover, such statutory language reflects "a legislative policy 

determination that losses resulting from work-related automobile 

accidents should be borne by the 'ultimate consumers of the 

goods and services in whose production they are incurred.'" 

Portnoff v. N.J. Mfrs. Ins. Co., 392 N.J. Super. 377, 383 (App. 

Div.) (quoting Lefkin, supra, 229 N.J. Super. at 12), certif. 

denied, 192 N.J. 477 (2007). 

In addition, nothing in the legislative history of AICRA 

suggests the Legislature meant to treat workers, who are injured 

in a work-related automobile accident, as if they were limited 

by AICRA's no-fault system. Nor is there any suggestion that 

the Legislature intended to treat workers' compensation insurers 

as if they were PIP insurers. Indeed, there is simply no 

discussion of such an incorporation. It is fair to assume that 

had the Legislature intended to effectuate such a major change,

it would have used express language in the statute and discussed 

that incorporation in AICRA's legislative history. 

D. The Case Law

Our holding is also consistent with existing case law. Two 

opinions have addressed these issues. See Lefkin, supra, 229 

N.J. Super. at 7; Talmadge v. Burn, ___ N.J. Super. ___, ___

(App. Div. 2016) (slip op. at 1). 
17 A-1073-14T3

In Lefkin, this court found no bar against a worker, 

injured in an automobile accident, from recovering from a thirdparty tortfeasor medical expenses collected in workers' 

compensation. Lefkin, supra, 229 N.J. Super. at 9. We 

explained that "PIP benefits are not available to an insured if 

workers' compensation benefits are also available to him [or 

her]." Ibid. We also noted that the recovery of the medical 

expenses from the third-party tortfeasor would be subject to 

reimbursement to the workers' compensation insurer under the 

"compensation lien." Ibid. 

Lefkin involved a claim by a worker injured in a workrelated automobile accident. Id. at 5-6. The worker's medical 

expenses were paid by the workers' compensation insurer and, 

thus, the PIP automobile insurer did not pay those medical 

expenses. Id. at 6. The worker sued his PIP automobile 

insurer, Aetna Insurance Company, and the tortfeasors who caused 

the automobile accident. Id. at 5. The claims against the 

tortfeasors were settled and the worker sought to have Aetna pay 

the portion of his workers' compensation lien related to medical 

expenses. Id. at 6-7. In that regard, the worker argued that,

because such a recovery was barred by N.J.S.A. 39:6A-12, his 

settlement with the tortfeasors could not have included his 
18 A-1073-14T3

medical expenses. This court rejected that argument. Lefkin, 

supra, 229 N.J. Super. at 9.

We explained that there are "three potential sources of 

reimbursement of [the worker's] medical expenses . . . : 

workers' compensation benefits, PIP benefits, and recovery from 

the tortfeasor." Id. at 7. When all three potential payment 

sources "conjoin," the worker can recover his medical expenses 

from the tortfeasor. The workers' compensation insurer, in 

turn, is entitled to reimbursement for the medical expenses 

previously paid, less attorney's fees and costs of suit. Id. at 

9. 

While Lefkin, which was issued in 1988, pre-dated AICRA, 

which was enacted in 1998, see L. 1998, c. 21, nothing in AICRA 

changed the statutory provisions on which Lefkin relied. 

Importantly, both N.J.S.A. 39:6A-12 and N.J.S.A. 39:6A-6 predated AICRA and neither of those provisions were substantively 

changed by AICRA so as to require a result different from the 

conclusion reached in Lefkin.

In Talmadge, this court recently reached a conclusion 

consistent with Lefkin. Talmadge, supra, slip op. at 6. We 

held that a workers' compensation insurer was entitled to be 

reimbursed for medical expenses when a worker, injured in an 

automobile accident, made a subsequent recovery from the third-
19 A-1073-14T3

party tortfeasor. Ibid. The plaintiff in Talmadge was injured 

while driving her personal car on work-related business. Id. at 

2. Her employer's workers' compensation insurer, The Hartford, 

paid over $127,000 in medical expenses and compensation 

benefits. Ibid. The plaintiff then sued the driver of the car 

that caused the accident and that case settled with the

plaintiff receiving $250,000. Ibid.

The Hartford asserted a workers' compensation lien of 

$84,510.78 against that third-party recovery. Ibid. The 

plaintiff moved to reduce the workers' compensation lien to 

exclude the medical expenses. Ibid. The Law Division denied 

that motion, and we affirmed. In affirming, we explained that 

"[t]he [Workers' Compensation Act] clearly permits an employee 

who received workers' compensation benefits to seek recovery 

against the third-party for those benefits, including paid 

medical expenses. The statute also expressly entitles the 

workers' compensation carrier to repayment of all benefits paid 

to the employee." Id. at 6-7 (citing Greene v. AIG Cas. Co., 

433 N.J. Super. 59, 68 (App. Div. 2013)).

The motion judge here relied on the "rationale" of an 

unpublished opinion and ruled that workers' compensation 

insurers were not entitled to recover medical expenses they paid 

because injured workers were not entitled to recover such 
20 A-1073-14T3

expenses from the tortfeasor under AICRA. We reject such an 

interpretation of AICRA. For the reasons we have already 

explained, we hold that when a worker is injured in the course 

of his or her employment in a motor vehicle accident and 

workers' compensation benefits have been paid or are payable on 

behalf of the worker, the right of the injured worker to pursue 

claims against the tortfeasor and the right of the workers' 

compensation insurer to be reimbursed are governed by the WCA 

and not AICRA.

Accordingly, the orders extinguishing the portion of the 

workers' compensation liens related to medical expenses are 

reversed in all three cases on appeal. All three matters are 

remanded for entry of appropriate orders enforcing the workers' 

compensation liens.

Reversed and remanded. We do not retain jurisdiction.