On certification to the Superior Court, Appellate Division, whose opinion is reported 220 N.J. Super. 243 (1987).
For reversal and remandment -- Chief Justice Wilentz and Justices Clifford, Handler, Garibaldi, O'Hern and Stein. For affirmance -- None. The opinion of the Court was delivered by O'Hern, J.
[113 NJ Page 612] This appeal concerns the meaning of a standard clause in a New Jersey Blue Cross and Blue Shield hospital and surgical plan (Blue Cross/Blue Shield) that excludes from coverage certain claims covered by other medical reimbursement programs. Usually, the employer arranges such coverage and the
subscriber has little to do with the terms of the contract.*fn1 The clause at issue excludes coverage when there is an available workers' compensation remedy.
Workers' Compensation (workers' comp) provides a comprehensive system of reparation for people who suffer accidental, work-related injuries. Its theory and purposes have been reviewed in recent decisions, Eger v. E.I. du Pont deNemours Co., 110 N.J. 133 (1988); Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161 (1985). It provides coverage for the worker's lost income and medical expenses as well as damages for any permanent injuries suffered by the worker. For most workers, it is the only available remedy and therefore the exclusive remedy. Thus a worker who suffers an injury arising out of and in the course of employment will ordinarily be precluded from instituting a tort action against his employer, but will have hospital and doctor bills paid by the workers' comp carrier. Most employers purchase insurance to provide these benefits.
For minors, however, the Legislature has provided not an exclusive remedy in workers' comp but a choice of remedies. An injured minor can claim reimbursement from the employer either through a common-law tort action or through the Division of Workers' Compensation. N.J.S.A. 34:15-10. Each forum has advantages and disadvantages. The workers' comp program is a no-fault program -- all the minor need do is prove the extent of the injury and its connection to work. Under certain conditions a case may be reopened if the condition worsens. N.J.S.A. 34:15-27. But the benefits are limited to a prescribed schedule and are usually less generous than the awards possible in a common-law tort action.
In contrast, the potentially higher benefits available through the common-law tort action are conditioned on proof of the employer's fault or other misconduct. An injured minor (realistically the minor's lawyer) has to balance the certainty, security, and continuing nature of the workers' comp benefits with the riskier prospects for a one-shot, albeit dramatically greater, tort recovery.
In this case the minor was severely burned while working around a deep fat fryer. He had over $70,000 in medical expenses as a result of his injury. He would be covered for these expenses either under his father's Blue Cross/Blue Shield policy, absent the exclusionary clause, or under workers' comp. Workers' comp would have paid all necessary medical expenses plus a certain amount in compensation for his injuries, i.e., a scheduled award for lost wages and benefits calculated according to the injury sustained and any attendant neurological effect. See Poswiatowski v. Standard Chlorine Chem. Co., 96 N.J. 321 (1984).
The minor in this case instead chose to pursue the common-law tort remedy against his employer, Ponderosa Steak House (Ponderosa). Initially, his hospitalization benefits had been paid, as they generally are, by the employer's compensation carrier. Apparently this money was refunded to the compensation carrier before the conclusion of the civil litigation. While the civil litigation was still pending, the minor asked Blue Cross/Blue Shield to pay for his "medical, surgical and hospital bills and expenses." Blue Cross/Blue Shield refused and this suit ensued.
The trial court, on cross-motions for summary judgment, granted plaintiff's motion and denied Blue Cross/Blue Shield's motion for summary judgment. The court, quoting Hunt v. Hospital Service Plan of New Jersey, 33 N.J. 98, 102-03 (1960), reasoned that the clause excluding Blue Cross/Blue Shield coverage was "of doubtful import [and should be] strictly construed against the insurer," because it was unclear whether
the minor may be forced to elect either a tort claim or medical compensation. The court ruled that the minor's claim did not fall within the exclusionary clause and that the expenses were covered under the Blue Cross/Blue Shield policy. On appeal, the Appellate Division affirmed, also reasoning that the language of the exclusionary clause was ambiguous in not clarifying its relationship to the "injured person's primary remedy" in workers' comp. 220 N.J. Super. 243, 248 (1987). The Appellate Division concluded that "a subscriber would be objectively reasonable in not expecting that the Blue Cross/Blue Shield benefits would be lost under the exclusionary clause by the election of the common-law remedy or that the right of election would be burdened by that loss." Id. at 249. The Appellate Division, observing that the special status given to working minors by the Legislature under N.J.S.A. ...