On appeal from the Division of Workers' Compensation.
Michels and Baime. The opinion of the court was delivered by Michels, P.J.A.D.
Respondent-employer Joseph Savino & Son, Inc. appeals from a judgment of the Division of Workers' Compensation (Division) that awarded petitioner-employee Roscoe Miller attorney fees of $11,500. The pivotal issue raised by this appeal is whether respondent's offer of compensation for 100% of the right eye and tender of the amount then due to petitioner was made within a reasonable time within the scope and intendment of N.J.S.A. 34:15-64, and, therefore, whether the Division Judge erred in awarding fees on that component of the judgment.
On June 20, 1989, petitioner was injured when a piece of cardboard tubing struck his right eye during the course of his employment with respondent. Petitioner immediately left work and did not return until October 25, 1989. Respondent was notified of the accident on the day it occurred. Public Service Mutual Insurance Company, the workers' compensation carrier
for respondent, paid petitioner temporary disability benefits to November 8, 1989, which were deemed to be adequate. On December 18, 1989, petitioner filed a claim petition, seeking benefits for the injuries he sustained. On February 27, 1990, respondent answered the claim petition and by letter of even date requested that petitioner's attorney arrange for petitioner to be examined by the Eye Clinic. By letter dated March 15, 1990, petitioner's attorney forwarded petitioner's medical information to respondent. Thereafter, on April 26, 1990, petitioner was examined by Dr. Herbert F. Hein of the Eye Clinic. By letter dated May 10, 1990, Dr. Hein reported to respondent that petitioner had sustained 100% disability of his right eye and that petitioner did not require any further medical treatment.
On May 24, 1990, petitioner, through his attorney, advised respondent that he "need[ed] additional treatment" and requested authorization for the same. On June 5, 1990, petitioner's attorney informed the Division Judge that petitioner "[was] returning to his eye surgeon to determine if any further treatment [was] needed" and, therefore, requested that the pretrial hearings scheduled for June 19, 1990 "be adjourned for three cycles." On June 16, 1990, respondent authorized further treatment and advised petitioner to make an appointment with Dr. Hein. On July 31, 1990, Dr. Hein reexamined petitioner and by letter dated August 2, 1990, advised respondent that petitioner still had and would continue to have 100% permanent disability in the right eye by virtue of the marked decrease in central vision in the eye secondary to his work-connected injury. Dr. Hein also reaffirmed his prior opinion that there was no medical or surgical treatment that would further improve vision in petitioner's right eye, that petitioner did not require any surgery, and that petitioner would not benefit from any such surgery. On August 2, 1990, respondent offered petitioner compensation benefits for 100% of the right eye, which amounted to 200 weeks at $600 per week for a total of $32,000. At the same time, respondent tendered to petitioner its check in the amount of $6240, representing 39 weeks of the 200 weeks and
informed petitioner that checks will be issued every 4 weeks until the direct settlement offer is completed.
On February 5, 1991, the matter was pretried. On May 21, 1991, trial commenced and continued into July 1991. At the Conclusion of the testimony, the Division Judge awarded petitioner compensation benefits for 100% of the right eye and 15% of partial total for the residuals of the structural changes to that eye and for a post-traumatic stress disorder. The total compensation award to petitioner was $66,120, against which respondent was to receive a credit for the payment of $32,000. The Division Judge also awarded attorney fees of $6500, $4000 of which was to be paid by respondent and $2500 by petitioner. Subsequently, the Division Judge increased the award of attorney fees to $11,500, concluding that "respondent's offer of 100 percent of the eye was not made within a reasonable time." Respondent appealed the increased award of attorney fees, contending that the offer of compensation for 100% of the right eye and the tender of payment of the amount then due were made within a reasonable time as required by N.J.S.A. 34:15-64. We agree and reverse.
N.J.S.A. 34:15-64 empowers a Division Judge to award petitioner attorney fees not to exceed 20% of the judgment. The statute also, in pertinent part, provides:
When, however, at a reasonable time, prior to any hearing compensation has been offered and the amount then due has been tendered in good faith or paid within 26 weeks from the date of the notification to the employer of an accident or an occupational disease or the employee's final active medical treatment or within 26 weeks after the employee's return to work whichever is later or within 26 weeks after employer's notification of the employee's death, the reasonable allowance for attorney fee shall be based upon only that part of the judgment or award in excess of the amount of compensation, theretofore offered, tendered in good faith or paid. When the amount of the judgment, or when that part of the judgment of award in excess of compensation, offered, tendered in good faith or paid as aforesaid, is less than $200.00, an attorney fee may be allowed not in excess of $50.00.
N.J.S.A. 34:15-64, as it now reads, clearly was enacted to encourage employers to offer compensation at a reasonable time prior to a hearing by reducing the amount of attorney fees that may ...