On appeal from Superior Court, Appellate Division.
For reversal and remandment -- Chief Justice Hughes and Justices Mountain, Sullivan, Pashman, Clifford, Schreiber and Handler. For affirmance -- None. The opinion of the court was delivered by Sullivan, J.
This appeal poses the question of whether a county welfare board which has furnished financial aid on behalf of a dependent child pursuant to an Act concerning assistance for dependent children etc., N.J.S.A. 44:10-1 et seq., can obtain reimbursement from a tort recovery by the child for personal injuries under an agreement to repay signed by the child's mother. Resolution of the question involves, inter alia, the interpretation of the statute under which the assistance was furnished, N.J.S.A. 44:10-1 et seq., particularly section 4(a) which deals with repayment of assistance. The Act was passed to take advantage of federal funding available under the program of Aid to Families with Dependent Children (AFDC) established by 42 U.S.C.A. § 601 et seq. See Essex Cty. Welf. Bd. v. Dept. of Inst. & Agencies, 75 N.J. 232 (1978).
Lisa Jackson, the infant here involved, was three years old when on May 4, 1972 she suffered severe burns on her left leg after it became wedged between a wall and a steampipe in the Newark Housing Authority apartment where she lived with her mother Wanda Jackson. The child was hospitalized for 35 days as a result of her injuries and underwent skin grafts on her left leg. At the time, she was a dependent child within the meaning of the Act and her mother was receiving benefits on her behalf.
The record does not indicate when suit was started by the mother individually and on behalf of the child for damages. However, a written "Agreement to Repay" dated August 10, 1973 was executed by Wanda Jackson referring to the anticipated receipt of funds by virtue of a claim against the Newark Housing Authority. The agreement stated that it was for the purpose of receiving Assistance for Dependent Children under N.J.S.A. 44:10-1 et seq. and included a
promise "to repay the County Welfare Board for that portion of any assistance so granted which may be paid during the period pending my receipt" of the anticipated funds.
The suit involving the burn injuries was tried in December 1974 and, based on a jury verdict, judgment dated December 18, 1974 was entered in favor of Lisa Jackson, the infant, for $20,000 plus interest and in favor of Wanda Jackson, her mother, for $8,626 plus interest.
An order for distribution of judgment was signed on April 25, 1975 fixing the amount of counsel fees and directing that $15,274, the net balance of the award to Lisa Jackson, be deposited in a guardianship bank account. The order also provided that outstanding medical liens amounting to $5,629 were to be satisfied out of the net balance ($6.050.18) of the award to Wanda Jackson.
On July 13, 1976 the Essex County Welfare Board filed a complaint alleging the execution of the written agreement to repay assistance furnished Lisa Jackson out of her claim against the Housing Authority. It also alleged "settlement" of the claim and that there had been received on behalf of Lisa Jackson a net sum of $15,274 which had been placed in an interest-bearing bank account. The complaint mistakenly indicated that the accident happened in May 1973 (it occurred on May 4, 1972) and alleged that the Welfare Board was entitled to reimbursement for assistance furnished on behalf of the child from May 1973 to date.
On November 1, 1976, the adjourned return day of an Order to Show Cause entered on the complaint, the trial court ruled that the Welfare Board was entitled to reimbursement for the assistance furnished on behalf of Lisa Jackson. Repayment, calculated to run from May 1973 and amounting to $2,833.86, was ordered, payment to be made from the bank funds on deposit for the benefit of Lisa Jackson. The Appellate Division, in an unreported opinion, affirmed the decision of the trial court. An appeal on behalf of the child was filed with this Court as a matter of right. R. 2:2-1(a)(1).
N.J.S.A. 44:10-4(a), the statutory section herein involved, provided as follows at the time the agreement to repay was executed and ...