Drewen, J.c.c. (temporarily assigned).
[39 NJSuper Page 508] The question is whether settlement of a third-party action brought by an injured workman under the provisions of N.J.S.A. 34:15-40 may, on the workman's part, be carried out upon his own
authority and right as sui juris plaintiff in the cause; or whether acceptance of a settlement proffered the workman requires, under the statute mentioned, approval by a compensation insurance carrier having a lien for compensation payments and the payment of medical expenses under the compensation award.
The facts are fully stipulated. One Antoinette Schmidt suffered a compensable injury while in the employ of Victory Bar & Grill, Inc. Claim petition was filed and such proceedings were had thereunder that an award and allowances were made to claim-petitioner. Defendant Massachusetts Bonding and Insurance Company, as the employer's insurance carrier, made payments on the award aggregating $2,816.07. Some time prior to the making of the award and pending determination of the claim therefor, the claim-petitioner instituted a third-party action at common law, within the provisions of the statute, supra , against one Bernson, as owner of the premises upon which the workman's injury had occurred. The defendant Commercial Insurance Company was insurance carrier for the third-party defendant.
Plaintiff herein was attorney for the claim-petitioner in the compensation proceedings and also for the plaintiffs (husband and wife) in the third-party action. While the latter cause was at issue plaintiffs and the aforementioned Commercial Insurance Company had arrived at an agreement that the action be terminated and releases given upon the payment to plaintiffs of the sum of $1,750. Conclusion of the settlement was prevented solely by the refusal of the Massachusetts Bonding and Insurance Company to release its lien, that company taking the position that no settlement of the third-party action was acceptable to it unless for an amount at least equal to that of its lien claim for the sum first aforementioned.
Plaintiff herein asks the payment of the proposed settlement fund into court; that his fees and costs be paid therefrom within the allowances fixed by the statute, supra; and that the balance remaining after the payment of such additional sums as may be allowed to defendant Commercial
Insurance Company of Newark, be paid to Massachusetts Bonding and Insurance Company for the release of its lien upon the third-party cause pursuant to the provisions of the statute.
It is pertinent for present purposes to quote the statute in part as follows (italics supplied):
"In the event that the employee * * * shall recover and be paid from the said third person or corporation, any sum in release * * * on account of his or its liability to the injured employee, the liability of the employer under this statute thereupon shall be only such as is hereinafter in this section provided.
(c) If the sum recovered by the employee as aforesaid is less than the liability of the employer or his insurance carrier under this statute, the employer or his insurance carrier shall be liable for the difference, plus the employee's expenses of suit and attorney's fee as hereinafter defined, and shall be entitled to be reimbursed, as hereinafter provided for so much of the medical expenses incurred and compensation payments theretofore paid to the injured employee * * * as exceeds the amount of such difference plus such employee's expenses of suit and attorney's fee.
(d) If at any time prior to the payment by the third person or corporation to the injured employee * * *, the employer or his insurance carrier shall serve notice, as hereinafter provided, upon such third person or corporation that compensation has been applied for by the injured employee * * * it shall thereupon become the duty of such third person or corporation, before making any payment to the injured employee * * *, to inquire from such employer or his insurance carrier * * *. Where such notice shall have been served, it shall further become the duty of such third person or corporation, before making any payment as aforesaid, to inquire from such injured employee * * * the amount of the expenses of suit and attorney's fee, or either of them in the action or settlement of the claim against such third person or corporation. Thereafter, out of that part of any amount about to be paid in release * * * by such third person or corporation on account of his or its liability to the injured employee, the employer or his insurance carrier shall be entitled to receive from such third person or corporation so much thereof as may be due the ...