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Calalpa v. Dae Ryung Co.1/31/2003
tlement proceeds requires equitable considerations and matter was remanded for a hearing to determine whether plaintiff had been fully compensated for his damages before lien could attach); Charnecky v. American Reliance Ins. Co., 249 N.J. Super. 91 (App. Div. 1991), aff'd o.b., 127 N.J. 188 (1992) (where uninsured motorist settlement and workers' compensation benefits, combined, may not fully compensate injured employee, N.J.S.A. 34:15-40 does not apply, rather, equitable considerations required a determination of whether employee was made whole and lien could attach only to excess), overruled, Frazier v. New Jersey Mfrs. Ins., supra, 142 N.J. at 605.
Plaintiff's arguments are not entirely without merit. Defendants are plaintiff's employers. They are not "third person" entities, so to speak. The statutory lien, then, could reasonably be said not to apply to a recovery from them in the intentional tort litigation. And, while Millison did recognize that credit for the workers' compensation benefits would be appropriate, the credit the court envisioned was to be accorded "to the extent that the civil damages award [or monies received by plaintiff employee in settlement ] would serve as a double recovery." Millison v. E.I. du Pont de Nemours, supra, 101 N.J. at 187 (emphasis added). The use of the phrases "to the extent" and "would serve as a double recovery" could be construed as calling for an equitable lien because, if the monies received in the tort litigation and the workers' compensation benefits do not fully compensate plaintiff, as is contended here, how can there be a double recovery?
Moreover, the "double recovery" that a workers' compensation lien is intended to prevent does not neatly fit the circumstances here. As explained in 6 Arthur Larson and Lex K. Larson, Larson's Workers' Compensation Law, ยง 110.02 at 110-3 to -4 (2002):
It is equally elementary that the claimant should not be allowed to keep the entire amount both of his or her compensation award and of the common-law damage recovery. The obvious disposition of the matter is to give the employer so much of the negligence recovery as is necessary to reimburse it for its compensation outlay, and to give the employee the excess. This is fair to everyone concerned: the employer, who, in a fault sense, is neutral, comes out even; the third person pays exactly the damages he or she would ordinarily pay, which is correct since to reduce the third party's burden because of the relation between the employer and the employee would be a windfall that the third party has done nothing to deserve; and the employee gets a fuller reimbursement for actual damages sustained than is possible under the compensation system alone. [Emphasis added.]
Where, however the tortfeasor is the employer, the employer is not "neutral" and, if entitled to a lien, would not in the tort litigation "pay exactly the damages he or she ordinarily pay . . . ," or "come out even." This is so because, facially, the employer has paid damages from its tort pocket, but took some of that payment back from its workers' compensation pocket. Nonetheless, we think the workers' compensation carrier was properly accorded a dollar for dollar lien here for two reasons. First, the "double recovery" referred to by the Millison Court within the context of an injured employee's receipt of both workers' compensation benefits and civil damages for the same injuries focuses upon the notion that an employee cannot have both. As the Court observed in Frazier v. New Jersey Mfrs. Ins., supra, 142 N.J. at 596-98:
"The Workmen's Compensation Act, as enacted in 1911 [L. 1911, c. 95], did not provide for the employer's recovery from the third person alleg
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