On appeal from the Division of Workmen's Compensation, Department of Labor and Industry.
[50 NJSuper Page 318] This is an appeal from a denial of a motion to increase a counsel fee entered January 7, 1958 by the referee in the Division of Workmen's Compensation. The controversy as to the amount of the counsel fee awarded
the petitioner's attorney arises from the following fact situation: The petitioner was injured by accident arising out of and in the course of his employment with the respondent on September 18, 1956. Subsequent to this injury, medical treatment was supplied by the respondent and temporary disability at the rate of $30 weekly was paid from September 18, 1956 to July 15, 1957, a period of some 43 weeks. (On June 18, 1957 the respondent caused Dr. Saul I. Firtel, an orthopedist, to examine the petitioner). A formal claim petition alleging orthopedic disability was filed on July 23, 1957 and was served upon the carrier on August 7, 1957. On this latter date the respondent executed an answer which stated that the resultant permanent disability to the petitioner's right arm was 60%. Upon the cessation of temporary disability payments the respondent commenced the payment of permanent compensation; the first of these checks was issued July 19, 1957, and regular monthly checks were sent thereafter. The petitioner returned to work on August 5, 1957.
The case was originally set down for pretrial on October 27, 1957, at which time the petitioner sought to amend the claim petition to include neurological disability, which was informally allowed. On November 14, 1957 the petitioner was examined by the respondent's neurologist and for that reason the matter was then rescheduled for pretrial on November 22, 1957. At the time of this pretrial a consent judgment pursuant to N.J.S.A. 34:15-22 was entered. Accordingly, there was a determination that the petitioner sustained a partial permanent disability of 70% of the right arm and 7 1/2% of total permanent disability, of which 2 1/2% represented an orthopedic disability as a result of scarring of the abdomen caused by a skin grafting operation, and 5% on a neurological basis. Therefore, the petitioner was awarded by the referee $30 per week for 251 1/4 weeks, which totaled $7,537.50. A counsel fee of $375 was awarded to the petitioner's attorney, of which $200 was to be paid by the respondent and $175 by the petitioner. At this hearing it was determined that the petitioner was entitled
to two additional weeks of temporary compensation. While the transcript of the pretrial proceeding does not expressly delineate the basis upon which this allowance of a counsel fee was made, it is manifest that it was based upon that part of the petitioner's recovery which exceeded the 60% of partial permanent disability admitted by the respondent in its answer of August 7, 1957. The petitioner's attorney then moved for an order increasing the counsel fee allowance, and argument on this motion was heard on January 7, 1958 by the same referee.
The making of an offer to pay compensation under N.J.S.A. 34:15-64 so as to limit the award of a fee to the petitioner's attorney to the amount of compensation in excess of the offer has been the subject of much judicial scrutiny. The language of the section of the statute which is the storm center of controversy reads, inter alia , as follows:
"* * * When, however, at a reasonable time, prior to any hearing compensation has been offered and the amount then due has been tendered in good faith or paid, the reasonable allowance for attorney fee shall be based upon only that part of the judgment or award in excess of the amount of compensation, theretofore offered, tendered in good faith or paid. * * *"
In Seitz v. Singer Mfg. Co. , 36 N.J. Super. 546 (App. Div. 1955), it was held that the tender of a check in the amount representing the first week of permanent disability compensation to the petitioner four days prior to the hearing could not be "deemed a bona fide offer to settle the matter within a reasonable time." Id. , 36 N.J. Super. at page 551. The purpose of the statute was clearly enunciated in Davala v. American Bridge Co. , 36 N.J. Super. 274 (App. Div. 1955), in which the court stated that the purpose of the 1952 amendment was "to afford greater protection to attorneys representing compensation claimants who may have invested substantial time and effort in a matter prior to the making of an offer by a respondent. * * *." Id. , 36 N.J. Super. at page 279.
The most recent case to concern itself with this problem is that of Moore v. Magor Car Corp. , 47 N.J. Super. 425
(App. Div. 1957), affirmed 25 N.J. 539 (1958). In that case the petitioner was injured on October 10, 1955. The respondent's eye specialist performed an operation on the injured eye of the petitioner in October of 1955 and, on December 16, 1955, the doctor reported to the respondent that the petitioner had a "100% schedule loss of vision and the prognosis for the return of vision is very poor." 47 N.J. Super. at page 428. The petitioner then filed a claim petition on February 10, 1956, which was served on the respondent on March 14 of that year. The respondent having received a report from its examining ophthalmologist ascribing loss of vision to the petitioner's eye at 100%, filed its answer on March 26, 1956 admitting that there was 100% loss of vision in the petitioner's eye. On March 21, 1956 the respondent, without any accompanying explanation, sent a check in the amount of $360 to the petitioner. The respondent contended that the admission in its answer and the sending of the check to the petitioner was a good ...