On appeal from the Camden County Court, Probate Division.
Lora, Antell and Pressler. The opinion of the court was delivered by Pressler, J.A.D.
This is a welfare reimbursement case.
In February 1972 Jose Jones, then six years old and receiving welfare assistance from the Camden County Welfare Board (Board), was injured in an automobile accident. Upon the Board's request, his mother Janet Jones signed an agreement in June 1974 undertaking to repay the Board in the amount of its assistance out of the prospective proceeds of the child's still pending personal injury claim. The claim was settled by friendly judgment in December 1976 for a gross recovery of $25,000. The balance of some $13,000 remaining after payment of medical expenses, counsel fees and costs was deposited in a trust account with the Camden County Surrogate. The Board thereupon petitioned the court pursuant to N.J.S.A. 44:10-4(a) for an
order directing that it be reimbursed out of the trust account in the amount of assistance paid by it for Jose from and after the date of the accident.*fn1 The petition was resisted on various statutory and constitutional grounds by his mother and guardian, who argued in the alternative that if any reimbursement at all were to be allowed it should be limited to the assistance period commencing on December 16, 1976, the date of judicial approval of the settlement, and should, furthermore, be subject to charge for a pro rata share of counsel fees incurred by her and Jose in the negligence litigation.
The trial judge entered judgment in favor of the Board, allowing it reimbursement for assistance paid from the date of the friendly judgment and charging that amount with a pro rata share of counsel fees. The Board and the Division of Public Welfare, which intervened in this appeal by our leave, appeal both from the counsel fee provision of the order and from its directive respecting the commencement date for reimbursable assistance. Jose's guardian cross-appeals, continuing to assert the exemption of the personal injury claim proceeds from the Board's statutory and contractual right to reimbursement.
We deal with the cross-appeal first. Subsequent to the filing of this appeal the New Jersey Supreme Court decided In re Estate of Jackson , 79 N.J. 517 (1979). We are satisfied that all of the guardian's challenges to the general validity and
enforceability of such a reimbursement agreement as is here involved were carefully considered and rejected by the Supreme Court. More specifically, the Supreme Court in Jackson held that the Legislature did not intend to exempt personal injury recoveries from the scope of the applicable statute, N.J.S.A. 44:10-4(a), and further, that the statute is not unconstitutional by reason of its authorization to a parent to execute the repayment promise on behalf of his child or by reason of the coerciveness implicit in a Board's right to terminate welfare assistance unless the agreement is signed.
With respect to the two issues raised on the agencies' appeal, we are satisfied and indeed, the agencies so stipulate, that Jackson is dispositive of the question of the amount of assistance reimbursable. It is the holding of Jackson that in respect of repayment agreements which, as here, were executed prior to the amendment of N.J.S.A. 44:10-4(a) by L. 1977, c. 127, the reimbursement right of the Board extends to welfare assistance paid from and after the date of the agreement. Thus, the trial judge erred in prospectively applying the contrary provision of the 1977 amendment and ordering reimbursement from and after the date of the friendly judgment. We, therefore, reverse that portion of the judgment and remand to the trial court for recalculation based on the date the agreement was signed by the guardian.
We are, finally, constrained to reverse that portion of the judgment charging the reimbursement with a pro rata share of counsel fees. The trial court in so ordering relied exclusively on Hedgebeth v. Medford , 74 N.J. 360 (1977). The decision in Hedgebeth held that the exercise of the State's statutory right of reimbursement by way of subrogation in respect of Medicaid payments made by it to a recipient who subsequently succeeded in recovering the cost of those same medical expenses from a ...