Miller, J.c.c., Temporarily Assigned.
Three motions for turnover orders seek to determine the respective right, inter sese , of a county welfare board and persons obtaining monies in their own names or to their use as the result of personal injury claims. In one case the individuals are recipients of monies under the Aid to Dependent Children Program, N.J.S.A. 44:10-1 et seq. , and two cases involve the proceeds of personal injury claims approved, on behalf of children, by this court and deposited with the surrogate pursuant to N.J.S.A. 3A:7-14.1.
By order of the court all three were consolidated for argument. A guardian ad litem was appointed for the infants. The court also invited the Public Advocate and Camden Regional Legal Services to participate amici curiae. The Public Advocate thereupon requested Legal Services to act for him.
While the three cases are interrelated and may be discussed within the same frame of reference, each set of facts must be taken separately since the facts in each case present separate facets of the same problem.
In the Rodriquez case the parents were recipients of $15,877 in assistance under the Aid to Dependent Children program from July 1970 to June 1972. On October 9, 1971
an automobile accident occurred wherein the father was injured. On October 14, 1971 the Rodriquezes signed an "agreement to repay" furnished by the welfare board. They then retained an attorney and made a claim under an uninsured motorist coverage, by virtue of which they were awarded $10,000. These funds are presently held in escrow by the attorney retained in the negligence case. Medical expenses in excess of $4,000 were paid by Medicaid, which has a lien for that amount. On July 21, 1976 an order was entered for the Rodriquezes and their attorney to show cause why the welfare board should not be repaid the sum of $5,877.
N.J.S.A. 44:7-19 authorizes county welfare boards to bring court actions to recover money due for assistance to aged persons, from either that person himself or another person responsible for his support. N.J.S.A. 44:10-2 provides that aid to dependent children is to be administered in accordance with "requirements, conditions, limitations and procedures" similar to those in certain sections of N.J.S.A. 44:7-1 et seq. , including N.J.S.A. 44:7-19. The section which specifically applies to situations which public assistance is given to dependent children who recover money judgments is as follows:
Whenever any parent or relative with whom a child is living applies for or is receiving assistance for such child pursuant to this act, and it appears that there is pending a payment to the child or to either or both his parents of funds arising from a claim or interest legally or equitably owned by such child or by either or both his parents, the county welfare board may, as a condition of eligibility or continuation of eligibility for such assistance, require such parent or parents to execute a written promise to repay, from the funds anticipated, the amount of assistance to be granted. Upon any refusal to make repayment in accordance with such promise, the county welfare board may take all necessary and proper action under the laws of this State to enforce such promise, and the granting or continuing of assistance, as the case may be, shall be deemed due consideration therefor. [ N.J.S.A. 44:10-4(a)]
It should be noted that this statute applies only to situations affecting assistance to dependent children. Any funds
received under other programs, such as Aid to Working Poor, are not covered by this statute.
In Francis v. Harris , 100 N.J. Super. 313 (Law Div. 1968), aff'd 103 N.J. Super. 440 (App. Div. 1968), there was a discussion of the validity of this statute. In Francis a minor was hit by an automobile and thereafter was awarded a judgment for $8,000 which was paid from the Unsatisfied Claim and Judgment Fund. The child's attorney was appointed "guardian for the limited purpose of preserving, maintaining and disbursing the funds." The accident occurred on September 21, 1962. On November 21, 1962 his grandmother, as his guardian, signed an agreement to repay to the county welfare board the funds anticipated from the claim arising from the accident. On December 1, 1962 the child began to receive public assistance under the statute. The court discussed the validity of the repayment statute, pointing out that while there are certain guidelines for the receipt of federal funds for such programs, the states are given wide latitude in the organization and administration of the programs. Differences exist among the states' requirements for repayment. Our New Jersey Legislature adopted a policy calling for repayment of funds and establishing the procedure to be followed. Administrative regulations have been promulgated in accordance with statutory authority granted by N.J.S.A. 44:10-3. These regulations require that a pending uncollected tort claim vested in a dependent child should not affect the amount of assistance a child receives, but when the claim is collected it should be regarded as a source of repayment for public assistance granted during the pendency of the claim. Any funds remaining are to be considered in determining the child's need for public assistance. The court determined that reimbursement was the legislative policy and found that reimbursement subsequent to a valid repayment agreement was proper.
The Appellate Division has also considered whether an infant can be required to repay welfare funds when no repayment agreement has been signed. In Essex Cty. Welfare Bd.
v. Hellams , 98 N.J. Super. 181 (Law Div. 1967), aff'd 103 N.J. Super. 438 (App. Div. 1968), the court held that when no repayment agreement had been signed, the county welfare board could not recover funds received by a minor as a result of settlement of a personal injury claim.
The Rodriquez case involves an adult signing a repayment agreement under N.J.S.A. 44:10-4. Under Francis, supra , it seems clear that such agreements are valid, and under the statutory policy set forth by the Legislature, repayment agreements should be enforced by the courts. However, the Appellate Division in Essex Cty. Welfare Bd. v. Hellams , 103 N.J. Super. 438, 439 (App. Div. 1968), stated that "The provisions of N.J.S.A. 44:7-19 authorizing the Welfare Board to bring appropriate action to recover moneys due for assistance given any person, insofar as assistance given a dependent child is concerned, must be read with the provisions of N.J.S.A. 44:10-4." N.J.S.A. 44:10-4 requires that a repayment agreement be signed. If such agreement is not signed, there can be no recovery by the welfare board for assistance granted while the claim is pending.
In the Rodriquez case, they signed on a repayment agreement October 14, 1971, in which they promised "to repay the county welfare board for that portion of any assistance so granted which may be paid during the period pending my/our receipt of certain funds which are anticipated by the virtue of a claim or other action against Jerry Spall arising out of accident which occurred 10/9/71."
It should first be noted that the agreement covers only funds received pending the outcome of the action. This is in accordance with the provision of N.J.S.A. 44:10-4(a) regarding a promise to repay "from the funds anticipated, the amount of assistance to be granted." Therefore, if the validity of the agreement be assumed, the only money which could be recovered by the welfare board would be that money received by the parents subsequent to October 14, 1971 and prior to June 1972, when the parent stopped receiving assistance under the Aid to Dependent Children program.
Doubts present themselves as to the validity of the repayment agreement. In Francis v. Harris, supra , the agreement included specific references to the claim "against State of New Jersey Unsatisfied Claim and Judgment Fund, A.S.R. 25225-N, Code W, arising out of an accident involving Vernon Witt who was hit by an automobile on 9/21/62," 100 N.J. Super. at 315. There was no claim that the accident was incorrectly identified or that the child's grandmother did not understand the substance of what she was signing. The facts differ in this case. Here the statement was made by completing a form produced by the county welfare board. The completed form incorrectly identified the defendant in the potential claim as "Jerry Spall" while the defendant in fact was Domingo Cortez. The body of the agreement refers only to the male plaintiff, although both plaintiffs signed the paper. Singular and plural alternative wordings were not crossed out to make the form read correctly. There are serious questions about the parents' ability to understand English, and the court cannot determine whether ...