On a motion for summary judgment, this Court is presented with a novel question of statutory construction involving the Workers' Compensation Act, N.J.S.A. 34:15-1, et seq. The issue is whether a workers' compensation insurance carrier that paid a lump-sum settlement pursuant to N.J.S.A. 34:15-20 should be reimbursed pursuant to N.J.S.A. 34:15-40 from the proceeds of a third-party tort recovery. Consideration of the interplay between these statutory sections leads the Court to conclude that a carrier cannot recoup any part of a settlement which it previously paid under N.J.S.A. 34:15-20. This opinion is intended to supplement the reasons given in open court.
The salient facts are not disputed. On August 18, 1981, David Engard sustained fatal injuries while operating a tractor in the course of his employment with George Brauninger ("Brauninger"). Kathleen Engard, although not married to the decedent, had cohabited with him as his common-law wife in New Hope, Pennsylvania.*fn1 Ms. Engard retained the law firm of Joseph D. Kaplan & Sons, P.C. ("Kaplan") to bring a workers' compensation claim against Brauninger, as well as a third-party tort action against Massey-Ferguson, Inc. ("Massey"), which manufactured the tractor involved in the incident.
Through counsel, Ms. Engard filed a dependency claim petition in the Division of Workers' Compensation. Aetna Life & Casualty ("Aetna"), as workers' compensation carrier for Brauninger, filed an answer specifically denying Ms. Engard's dependency.
Neil M. Rednor, Esq. ("Rednor"), a member of the Kaplan firm, represented Ms. Engard on the dependency petition, which was heard on July 14, 1982 before Compensation Judge Stanley E. Rutkowski. Rather than litigate the dependency issue, the parties disposed of the petition pursuant to N.J.S.A. 34:15-20, by entering into a lump-sum settlement of $5,000. After finding the settlement to be fair and just, Judge Rutkowski entered an order approving it.*fn2
In June 1985, the tort action against Massey was settled by Ms. Engard for $64,000 and the proceeds of that settlement
were paid to the Estate of David Engard ("Estate").*fn3 By letter dated May 10, 1982, Aetna had notified Kaplan that it had provided benefits under the compensation law and would look to the firm, as counsel for the Estate, for reimbursement on its lien claim. A second letter from Aetna on September 10, 1982 itemized its expenditures as $5,000 based on the settlement paid to Ms. Engard, and $7,468.82 based on medical benefits paid on behalf of the Estate.
Acting on behalf of the Estate, Kaplan issued a check to Aetna on July 18, 1985 for $4,845.88 in purported satisfaction of Aetna's asserted lien. The amount tendered represented reimbursement for Aetna's prior medical expenditures, after crediting expenses of suit and the maximum 33 1/3 attorney's fee provided for in N.J.S.A. 34:15-40(e). Kaplan did not tender reimbursement for the dependency settlement, thus prompting the present lawsuit.
Kaplan and Rednor dispute Aetna's entitlement to recovery of the $5,000 dependency settlement. They bring this motion for summary judgment seeking dismissal of Aetna's Complaint.*fn4 In light of the absence of any genuine dispute as to the material facts, the case is ripe for summary determination as a matter of law. R. 4:46-2.
Several challenging questions are presented for resolution: Does the Superior Court of New Jersey, Law Division, have jurisdiction to determine the ...