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Midland Insurance Co. v. Colatrella

Decided: June 11, 1986.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 200 N.J. Super. 101 (1985).

For affirmance -- Chief Justice Wilentz and Justices Pollock, Clifford, Handler, O'Hern, and Garibaldi. For reversal -- Justice Stein. The opinion of the Court was delivered by Pollock, J. Stein, J., dissenting.


This case requires us to determine whether a workers' compensation lien applies against the proceeds of an uninsured motorist provision of an injured worker's personal automobile insurance policy. The trial court ruled that the lien applied and that the worker must reimburse the compensation carrier from the proceeds of his uninsured motorist insurance. The Appellate Division agreed. 200 N.J. Super. 101 (1985). We granted certification, 101 N.J. 278 (1985), and now affirm the judgment of the Appellate Division.


While working for the New Jersey Highway Authority in July 1980, defendant Anthony Colatrella was struck by an unidentified hit-and-run motorist. Colatrella filed a workers' compensation claim and was paid $9270.52 by Midland Insurance Company (Midland), the workers' compensation carrier for his employer. Colatrella also filed a claim under the uninsured motorist provision of his personal automobile liability insurance policy with Travelers Insurance Company (Travelers). This claim was submitted to arbitration and during the pendency of the arbitration proceeding, Midland asserted a lien, pursuant to N.J.S.A. 34:15-40, against the award. Colatrella and Travelers settled the uninsured motorist claim for $27,500, which was $2,500 less than the $30,000 policy limit, and Travelers paid the agreed sum to Colatrella in exchange for a hold-harmless agreement.

Midland sued Colatrella and Travelers for reimbursement, and Travelers cross-claimed against Colatrella for indemnification. All parties moved for summary judgment. The Law Division granted Midland's motion requiring Colatrella to reimburse Midland, and also granted Travelers' motion seeking indemnification from Colatrella.

On Colatrella's appeal, the Appellate Division adhered to its holding in Montedoro v. City of Asbury Park, 174 N.J. Super. 305

(1980), which held that the lien of the workers' compensation carrier attaches to the proceeds of uninsured motorist insurance purchased by the employer. The Court perceived no reason for reaching a different result merely because the uninsured motorist provision at stake in the present case was contained in the policy of the employee, not the employer. 200 N.J. Super. at 107. The court also found that the Legislature specifically intended N.J.S.A. 34:15-40 to prevent double recovery by an employee, id. at 104, and that N.J.S.A. 17:28-1.1, which requires uninsured motorist coverage, did not evince a contradictory legislative intent, id. at 106. Consequently, the Appellate Division held that Midland was entitled to reimbursement for its workers' compensation lien from the proceeds of Colatrella's uninsured motorist policy.


Generally speaking, the workers' compensation and uninsured motorist statutes apply to different risks. The Workers' Compensation Act provides prescribed benefits to an employee for work-related injuries, and the uninsured motorist statute provides a means for an automobile owner to recover for injuries caused by an uninsured motorist. Nonetheless, both statutes are implicated in the present case, which involves work-related injuries sustained by an employee caused by the negligence of an unidentified ("hit-and-run") motorist.

An injured party asserting a claim either in workers' compensation or under uninsured motorist coverage may recover lesser damages than would be allowed in a common-law action against a third-party tortfeasor. In some cases, the actual damages suffered by the employee may exceed the combined recovery under the Workers' Compensation Act and uninsured motorist coverage. Here, however, it is apparent that the workers' compensation benefits and the proceeds of Colatrella's uninsured

motorist coverage exceed the acknowledged value ...

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