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Calalpa v. Dae Ryung Co.



Argued January 15, 2003

This appeal arises in the context of a workers' compensation benefitted employee's settled intentional wrong tort litigation against defendants, one of whom is unquestionably his employer and the other an apparent, but not dispositively determined, joint employer. The workers' compensation carrier successfully obtained an order from the trial judge according it the benefit of the workers' compensation lien pursuant to N.J.S.A. 34:15-40 and, thus, directing that "plaintiff shall reimburse [the workers' compensation carrier] its compensation lien out of the settlement proceeds in the amount of $39,020.00." Plaintiff appeals, arguing that the $200,000 settlement proceeds for his injury, three amputated fingers, hardly reflects his full damages, that he has not received a prohibited "double recovery" and, further, that the intentional wrong tort litigation settlement proceeds are not a "third person" recovery triggering the statutory lien.

In Millison v. E.I. du Pont de Nemours, 101 N.J. 161 (1985), the Supreme Court had this to say about the subject:

If, however, a plaintiff should prevail in his suit based on intentional wrong, he would not be entitled to keep the entire amount of his compensation award as well as his civil suit remedy. That double recovery is to be avoided is evident from so much of the Compensation Act as demands that compensation claimants who have recovered from third parties be required to reimburse their employer or its insurance carrier for compensation payments already made. N.J.S.A. 34:15-40. Thus if the trier-of-fact determines that [the employer or co- employees] have been guilty of an intentional wrong . . . [the employer] or its insurance carrier will be able to offset compensation benefits previously paid to the extent that the civil damage award would serve as a double recovery. [Id. at 187 (emphasis added).] See also Kristiansen v. Morgan, 153 N.J. 298, 312 (1998), opinion modified on other grounds, 158 N.J. 681 (1999).

Thus, the motion judge here found:

that Millison v. E.I. DuPont, 101 N.J. 161 (1985), is dispositive of this motion. Therein, the Supreme Court acknowledged an employee's right to maintain a separate [intentional wrong] tort action against his employer where the employer [committed an intentional wrong].

At the same time, the Court upheld the reimbursement to the comp carrier for amounts paid in workers['] compensation. The plaintiff is not entitled to keep the entire amount of the comp award as well as his civil suit remedy because as I find the Millison Court held, this would amount to a double recovery.

The Supreme Court in several opinions has held that the Legislature's reference to a third person in title 34:15-40 is not to be confined to just third party tortfeasors, but also applies to recoveries that are the "functional equivalent of a recovery from a third party," such as here.

In that regard, the Court reviewed the Supreme Court cases in Frazier v. New Jersey Manufacturers, 142 N.J. 590 (1995), and Utica Mut. Ins. v. Maran & Maran, 142 N.J. 609 (1995).

Further, in the Appellate Division decision in Montedoro v. City of Asbury Park, 174 N.J. Super. 305 (App. Div. 1980), the Appellate Division came to a similar conclusion. These cases recognize that the legislative intent [of N.J.S.A. 34:15-40] to integrate the sources of recovery and prevent a double recovery is paramount regardless of whether the cumulative awards are sufficient to compensate the plaintiff fully for his injuries.

Under the circumstances, I can app

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