For reversal -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Haneman, J.
This case concerns the question whether, where an employee obtains a cash settlement from a third-party tort-feasor in release of the latter's liability for the employee's injury which also gave rise to workmen's compensation liability, such funds should be employed as reimbursement to the Two Per Cent Fund (Fund), N.J.S.A. 34:15-94, for payments made under N.J.S.A. 34:15-95.
Bello filed a petition for compensation payments against Goodyear Tire and Rubber Company (Goodyear) for toxic encepholopathy resulting from work-connected exposure to deleterious gases. He amended his petition, joining the One Per Cent Fund (later increased to Two Per Cent, L. 1966, c. 65, § 1), from which he sought additional compensation for disability arising out of a condition which pre-existed his Goodyear employment. The Judge of Compensation found Bello to be totally and permanently disabled, with 75% of this disability being attributable to his Goodyear employment and another 25% to a pre-existing partial disability. He was awarded workmen's compensation benefits from Goodyear in the sum of $13,500, but the full amount of this award, except for the employer's share of attorney's fees and litigation costs, was abated on account of a $30,000 recovery obtained by Bello in settlement of a third-party action. In addition, the Judge of Compensation filed a report with the Commissioner of Labor and Industry, recommending that eligibility for benefits from the Fund had been established for the 25% attributable to a preexisting partial disability. This recommendation was accepted by the Commissioner, who further determined, also pursuant to the Judge of Compensation's recommendation, that the Fund could claim a credit for the balance of Bello's third-party recovery not already exhausted by the credit taken by the employer. Bello appealed to the County Court from
the determination of entitlement of the Fund to credit out of the above referred $30,000. The County Court held that the Fund was not entitled to such credit. The Fund appealed to the Appellate Division which affirmed the County Court. Bello v. Com'r of Dept. of Labor and Industry, 106 N.J. Super. 405 (App. Div. 1969). This Court granted the Fund's petition for certification. 54 N.J. 561 (1969).
The pertinent statutes which are brought into play on this appeal are N.J.S.A. 34:15-40 and N.J.S.A. 34:15-95.
"Where a third person is liable to the employee or his dependents for an injury * * *, the existence of a right of compensation from the employer or insurance carrier under this statute shall not operate as a bar to the action of the employee * * *, nor be regarded as establishing a measure of damage therein. In the event that the employee or his dependents shall recover and be paid from the said third person or his insurance carrier, any sum in release or in judgment on account of his or its liability to the injured employee or his dependents, the liability of the employer under this statute thereupon shall be only such as is hereinafter in this section provided. [Emphasis supplied]
"(b) If the sum recovered by the employee or his dependents from the third person or his insurance carrier is equivalent to or greater than the liability of the employer or his insurance carrier under this statute, the employer or his insurance carrier shall be released from such liability and shall be entitled to be reimbursed, as hereinafter provided, for the medical expenses incurred and compensation payments theretofore paid to the injured employee or his dependents less employee's expenses of suit and attorney's fee as hereinafter defined." [Emphasis supplied]
N.J.S.A. 34:15-95 reads in part:
"The sums collected under section 34:15-94 of this Title shall constitute a fund out of which a sum shall be set aside each year * * * from which compensation payments in accordance with the provisions of paragraph (b) of section 34:15-12 of this Title shall be made to persons totally disabled, as a result of experiencing a subsequent permanent injury under conditions entitling such persons to compensation therefor, when such persons had previously been permanently and partially disabled from some other cause; * * *."
We agree with the conclusion of the Appellate Division which reads ...