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Williams v. Department of Public Welfare

Decided: February 1, 1957.


On appeal from the Division of Workmen's Compensation, Department of Labor and Industry.

Gaulkin, J.c.c.


[43 NJSuper Page 474] On February 16, 1954 Louise Williams was awarded $4,125 by the Division of Workmen's Compensation against her employer, the City of Newark, for injuries sustained in an accident which occurred in the course of her employment. Periodic payments were made to her by the city upon this award until all but $545 had been paid, when

the city discovered that she had embezzled from it a large sum, stipulated to be "far in excess of $4,125.00." The city thereupon made application to the Division of Workmen's Compensation for an order adjudging the then unpaid balance of $545 to be "fully paid and satisfied." The Division denied the application on the ground that a workmen's compensation award is "exempt from all claims of creditors" and from "levy, execution or attachment" by virtue of R.S. 34:15-29. The city appeals.

The argument of the city is that (1) it is not a "creditor" nor is it making a "levy, execution or attachment" within the meaning of the statute; (2) even if it is, Mrs. Williams should be denied the balance "on the theory of equitable estoppel" or because it would be immoral, unjust, and therefore against public policy to permit her to collect that balance after having stolen so much more from her employer.

The Division has no jurisdiction to declare an award "paid" because the employee owes the employer a sum, liquidated or unliquidated, upon an independent claim. The Division has only the jurisdiction given it by the Workmen's Compensation Act, Goldmann v. Johanna Farms, Inc. , 26 N.J. Super. 550 (Cty. Ct. 1953); Phillips v. Allbright , 126 N.J.L. 14, 15 (Sup. Ct. 1940); Tortoriello v. Toohey , 121 N.J.L. 604 (Sup. Ct. 1939), affirmed 123 N.J.L. 202 (E. & A. 1939), and that act contains no provision for counterclaim, recoupment or set off. Dikovich v. American Steel & Wire Co. , 36 N.J.L. 304 (Com. Pl. 1913); Newark Paving Co. v. Klotz , 85 N.J.L. 432 (Sup. Ct. 1914), affirmed 86 N.J.L. 690 (E. & A. 1914); Rumbolo v. Erb , 19 N.J. Misc. 311 (Com. Pl. 1941); R.S. 34:15-25. The decision of the Division can be affirmed on the ground it had no jurisdiction to do what the city asked, but since the matter was presented below and here on the merits without objection to the jurisdiction, it will be so decided.

The city concedes that no sum due from the employee to the employer arising out of tort or contract may be set off or counterclaimed against an award. This is so even when the result may be to compensate the employee doubly

for his injury. Dikovich v. American Steel & Wire Co., supra; Newark Paving Co. v. Klotz, supra. See also Beattyville Co. v. Sizemore , 203 Ky. 7, 261 S.W. 620 (Ky. Ct. App. 1924).

In the Dikovich case the employee sustained an eye injury. Without waiting for the employee to institute any proceedings, the employer immediately expended certain sums for a specialist, a private room and a private nurse, and for other medical treatment and services. A portion of this was admittedly essential, the remainder desirable. The employer asked that these disbursements be deducted from the amount of the employee's award. The employee objected, insisting among other things "that the expenditure * * * cannot be * * * allowed as a set off in this proceeding." The court agreed, saying:

"The respondent contends that the amount was expended for the petitioner's medical needs; that for want of treatment the petitioner was in danger of losing the sight of both eyes, and possibly, of losing his life. Instead of standing on its legal rights, and refusing to supply medical treatment beyond the $50 provided for by the statute, the respondent generously furnished medical assistance far beyond that amount. By doing so the petitioner was undoubtedly benefited, and the respondent avoided a possible claim for increased damages. The contention is, therefore * * * that the petitioner, having accepted the benefits, is liable for repayment.

If these expenditures were made at the request or with the consent, express or implied, of the petitioner, the respondent may possibly have a remedy in a suit at law. In my opinion, however * * * the amount cannot be deducted from the weekly compensation payments provided for by this Act.

By the statute, the petitioner, if entitled to anything, is entitled to a specific amount. No setoff or deduction is provided for by the Act, and to permit an employer to expend the whole or a considerable portion of the compensation for medical attendance, or for any other purpose, would seriously interfere with the legislative intent, and would practically ...

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