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Pullen v. Travelers Insurance Co.

Decided: December 13, 1985.

LEONARD A. PULLEN, PLAINTIFF-APPELLANT,
v.
TRAVELERS INSURANCE COMPANY, DEFENDANT-RESPONDENT



On appeal from the Superior Court, Law Division, Morris County.

Antell, Shebell and Muir. The opinion of the Court was delivered by Shebell, J.A.D.

Shebell

Plaintiff Leonard A. Pullen was a passenger in an automobile struck head-on by an uninsured vehicle which was traveling on the wrong side of the road in Boston, Massachusetts. Plaintiff was on the business of his employer at the time and was awarded workers' compensation benefits in the sum of $36,479.23 from defendant Travelers Insurance Company.

Plaintiff also recovered $225,000 through uninsured motorist coverage with the United Services Automobile Association which he had obtained and paid for himself. Defendant asserted a lien pursuant to N.J.S.A. 34:15-40 et seq. against that recovery. Plaintiff disputed defendant's entitlement and brought this declaratory judgment action seeking to bar defendant's claim.

Cross-motions for summary judgment resulted in the motion judge holding defendant's claim for reimbursement to be proper.

The court also resolved a dispute as to the amount of counsel fee to be charged before payment of the net amount to defendant.

Plaintiff appeals, alleging the court improperly ruled in favor of the workers' compensation insurance company. He also claims the court impermissibly pro rated the counsel fee paid on the total recovery instead of charging the workers' compensation carrier for the greater counsel fee paid on the up-front portion of the recovery against which the lien attaches. We need not consider this second issue.

The motion judge in ordering payment to the workers' compensation insurance carrier relied upon the Appellate Division decision of Montedoro v. Asbury Park, 174 N.J. Super. 305 (App.Div.1980) which was recently adhered to by another Part of this court in Midland Ins. Co. v. Colatrella, 200 N.J. Super. 101 (App.Div.1985). We respectfully decline to follow the holdings in Montedoro and Colatrella.

In the original enactment of the Workers' Compensation Act (L. 1911, c. 95) there was no provision for reimbursement to the employer from the proceeds of a recovery from a liable third party or his insurance carrier. Danesi v. American Mfrs. Mut. Ins. Co., 189 N.J. Super. 160, 162 (App.Div.1983), certif. den. 94 N.J. 544 (1983); United States Cas. Co. v. Hercules Powder Co., 4 N.J. 157, 163 (1950); Henry Steers, Inc. v. Turner, etc., Co., 104 N.J.L. 189, 193 (E. & A. 1927). In 1913 the act was amended (L. 1913, c. 174, ยง 8) to provide for extinguishing of the employer's obligation to pay further compensation in the event of a recovery against a third-party tortfeasor, a right of reimbursement for workers' compensation benefits paid and a lien to secure reimbursement. Danesi, supra.

Various refinements in the statutory language and procedures resulted in the present N.J.S.A. 34:15-40 which provides as follows:

Where a third person is liable to the employee or his dependents for an injury or death, the existence of a right of ...


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