Calalpa v. Dae Ryung Co.1/31/2003
ed to be responsible for the injuries sustained." Johns-Manville Prods. Corp. v. Dronebarger, 211 N.J. Super. 520, 524 (Law Div. 1986). Hence, an employee who recovered against a liable third party was entitled to keep 100% of the workers' compensation benefits, as well as 100% of any third-party recovery. "Thus, an injured employee was in some instances permitted a double recovery." Ibid.
To overcome the inequity of double recovery, the Legislature amended the Workers' Compensation Act in 1913 by adding N.J.S.A. 34:15-40 (section 40), (L. 1913, c. 174, § 8). Newark Paving Co. v. Klotz, 85 N.J.L. 432 (Sup. Ct.), aff'd, 86 N.J.L. 690 (E. & A. 1914). With minor changes in 1931 (L. 1931, c. 279, § 3), 1936 (L. 1936, c. 162, § 1), 1951 (L. 1951, c. 169, § 1), and 1956 (L. 1956, c. 141, § 6), the 1913 amendment became codified in N.J.S.A. 34:15-40 . . . .
section 40 provides that an employee will be "guaranteed recovery for his common-law damages against contributing third-party tortfeasors or for his [workers'] compensation award, whichever is greater, but he may not duplicate these recoveries." [Emphasis added.]
That is to say, while an employee may pursue both compensation benefits and common-law tort damages, he may not keep both.
Allowing equitable considerations to permit an employee to retain all or a part of both his or her compensation benefits and tort proceeds would allow recovery of both. Further, the "to the extent" language in Millison probably reflects the Court's recognition that employer intentional wrong is difficult to prove and a plaintiff, therefore, may well not obtain any monies at all in the tort litigation.
Second, we agree with the motion judge's characterization of the tort litigation as the equivalent of a "third person" action. In this respect, the "third person" concept in N.J.S.A. 34:15-40 has been broadly applied to both true third person tortfeasors and tortfeasors who are the "functional equivalent." Frazier v. New Jersey Mfrs. Ins., supra, 142 at 598 (statutory lien applied to attorney malpractice damages); Midland Ins. Co. v. Colatrella, 102 N.J. 612, 618 (1986) (statutory lien applied to uninsured motorist insurance recovery). We are convinced the intentional wrong civil tort litigation against defendants is the functional equivalent of a "third person" tortfeasor suit. Where an employee has pierced the threshold of the compensation bar, he or she has established that the employer's conduct is beyond the "natural risk of" employment and does not "arise out of" the employment relationship. Laidlow v. Hariton Machinery Co., Inc. 170 N.J. 602, 606 (2002). In effect, the employer has stepped out of its employer shoes into those of an actionable tortfeasor. See N.J. Practice Series, Workers' Compensation Law, § 17.13 "Third-Party Liens" ("The lien of the employer may be asserted upon any third party including those that involve intentional wrong" (citing Millison v. E.I. du Pont de Nemours, supra, 101 N.J. 161)); 6 Arthur Larson and Lex K. Larson, Larson's Workers' Compensation Law, supra, § 103.02 at 103-07.
Other states that have considered the issue, usually in the context of whether the employee must elect one or the other remedy, have required an offset or lien. For instance, the Supreme Court of Connecticut, in holding that an employee may seek both workers' compensation benefits and civil tort damages where the employer commits an intentional tort, also held that the employer must be entitled to an offset for the compensation benefits paid to avoid double recovery, observing:
This approach is not without precedent. See, e.g., Whitney-Fidalgo Seafood, Inc. v. Beukers, 554 P.2d 250, 254 (A
Page 1 2 3 4 5 6 New Jersey Personal Injury Attorneys
Personal Injury Lawyers
|