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Kazala v. Prudential Insurance Co.

Decided: March 30, 1953.

JOSEPH J. KAZALA, CLAIMANT-RESPONDENT,
v.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, RESPONDENT-APPELLANT



On appeal from Department of Labor and Industry of New Jersey, Division of Employment Security.

For vacation of order -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. Opposed -- None. The opinion of the court was delivered by Burling, J.

Burling

This is an appeal from an order of the State Department of Labor and Industry, Division of Employment Security, Disability Insurance Service (hereinafter referred to as the Division) whereby the claimant-respondent Joseph J. Kazala (hereinafter called Kazala) was awarded disability benefits from October 24, 1951 to March 6, 1952 for alleged disability under a private disability plan of the defendant-appellant, the Prudential Insurance Company of America (hereinafter called Prudential). The appeal was addressed to the Superior Court, Appellate Division, under Rule 3:81. Prior to hearing there, certification was allowed upon our own motion.

Kazala, on January 7, 1952, through his attorneys filed with the Division a complaint, later formally reasserted, against Prudential, alleging that Prudential had denied him disability benefits from October 22, 1951 under Prudential's disability insurance benefit plan (Group Policy GD-9600 effective January 1, 1949) approved by the Division on December 23, 1948 and an amendment thereto effective January 1, 1950, approved by the Division on January 6, 1950, collectively designated by the Division as "Private Plan No.

111-4750." Kazala alleged that he was "totally disabled from performing the duties of my job since October 22, 1951." The award for compensation was made to March 6, 1952, and from this he did not appeal. Hearings on Kazala's claim were held before a hearing officer of the Division on March 28, 1952 and April 8, 1952. The Division hearing officer determined the matter in favor of Kazala, and on September 4, 1952 an order was entered awarding him disability benefits from October 24, 1951 to March 6, 1952 "in accordance with the provisions of Private Plan No. 111-4750," counsel fee of $90 and a medical witness fee of $15 for each of the two physicians who testified for Kazala. It was from this order of September 4, 1952 that Prudential appealed.

The Temporary Disability Benefits Law, L. 1948, c. 110, p. 586, sec. 1 et seq., N.J.S.A. 43:21-25 et seq., provides for the establishment by employers of private plans for the payment of disability benefits in lieu of the benefits of the state plan established by the statute. It provided that such a private plan should be approved by the Division if it should find that, inter alia, eligibility requirements for benefits under such private plan are no more restrictive than as provided in the statute for benefits payable by the state plan and the weekly benefits payable under such private plan for any week of disability are at least equal to the weekly benefit amount payable by the state plan (L. 1948, c. 110, p. 590, sec. 8, as amended L. 1950, c. 173, sec. 2; N.J.S.A. 43:21-32). This situation is provided for under part II, section 2 (e) of the hereinbefore mentioned policy defining the Prudential private plan.

The provisions in part I of the policy are more liberal in respect to amounts,*fn* but more restrictive in respect to eligibility requirements, than the state plan.

The questions involved in this appeal are within a narrow scope and may be pithily expressed as follows:

(a) Under the facts of this case does Kazala qualify for disability benefits under part II, section 2(e) of the private plan? If so, in what amount?

(b) Does Kazala qualify for benefits under part I of the private plan, which is more liberal in payments but more restrictive as to eligibility requirements than the state plan?

Our conclusions are that:

(a) Under the facts of this case Kazala is not entitled to recover benefits under part I of the Prudential private plan;

(b) Under the facts of this case Kazala is entitled under part II of the Prudential private plan to recover benefits under the statutory formula (i.e., the state plan) for the period of October 31, 1951 to November 15, 1951.

The provisions of Private Plan No. 111-4750 (namely Prudential's Group Policy GD-9600, amended as approved

by the Division) directly involved are part I, section 2(a); part I, section 2(g); and part II, section 2(e). ...


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