On appeal from Superior Court, Appellate Division.
For modification and remandment -- Acting Chief Justice Jacobs, Justices Hall, Sullivan, Pashman and Clifford and Judge Conford. Opposed -- None. The opinion of the Court was delivered by Sullivan, J.
This appeal involves a workmen's compensation death case where there was a third-party tort recovery for the same death which was greater than the employer's compensation liability.
Petitioner's husband was killed in a work-connected accident which occurred on November 3, 1968. In addition to petitioner, the decedent left two dependent children. Immediately following the accident, the compensation carrier filed a notice of direct settlement admitting liability under the statute. Payments were commenced on the basis of full statutory exposure. The funeral allowance of $750 was also paid. As of January 14, 1970 the compensation carrier had paid in benefits a total of $2,010. On or about that date a tort claim against a third party for damages resulting from the workman's death was settled for $75,000. In a proceeding in the third party matter to distribute the settlement
money counsel was allowed a fee of $21,111.09, being 28.14% of the total recovery.*fn1
Counsel immediately notified the compensation carrier of the third-party recovery and, pursuant to N.J.S.A. 34:15-40(b), forwarded a check for $2,010 to the carrier to reimburse it for benefits theretofore paid. At the same time counsel inquired of the compensation carrier if it intended to pay "one-third of your gross exposure" as a legal fee. The carrier responded on April 14, 1970 by forwarding a check to counsel for $670 representing one-third of the $2,010 reimbursement.
A workmen's compensation claim petition was filed on October 30, 1970. Its ostensible purpose was to have a judgment entered establishing the employer's liability and, although poorly articulated at the hearing before the compensation judge, petitioner also sought an adjudication as to what obligation the employer had to reimburse petitioner for part of the attorney fee allowed in the third-party recovery.
When the matter came on for hearing before the compensation judge, he conceived that the only issue was the amount of counsel fee to be allowed in the compensation proceeding and that petitioner's counsel was contending that the fee allowed to him should be predicated on the full amount of the employer's compensation liability.
The judge stated that counsel had been compensated for his work in the third-party matter and that his services in the Division of Workmen's Compensation were minimal. Accordingly, after calculating the award in favor of petitioner and the dependent children to be $30,238.50, he allowed petitioner's counsel a fee of $1,000 "for the work effort rendered in the compensation proceeding."
Petitioner appealed to the Appellate Division which, in an unpublished opinion, held that the compensation judge had erred in failing to recognize the benefit the employer received from the third-party recovery. It ordered that the Division of Workmen's Compensation allow "counsel fees" based upon 28.14%*fn2 of the employer's total liability on the compensation claim, "subject to any further reimbursement in favor of petitioner as may be appropriate."
This Court granted certification, 65 N.J. 273 (1973), because the Appellate Division opinion also phrased the issue of the employer's obligation to pay some part of the attorney fee allowed in the third-party recovery in terms of "counsel fees" to be allowed in the compensation proceeding. Also, the ...