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Bunk v. Port Authority of New York and New Jersey

May 22, 1996

JOHN R. BUNK, PETITIONER-RESPONDENT,
v.
THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY, RESPONDENT-APPELLANT, AND SECOND INJURY FUND, RESPONDENT-APPELLANT.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 279 N.J. Super. 613 (1995).

Chief Justice Wilentz and Justices Handler, Pollock, Garibaldi, Stein, and Coleman join in Justice O'HERN's opinion. The opinion of the Court was delivered by O'hern, J.

The opinion of the court was delivered by: O'hern

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

John R. Bunk v. The Port Authority of New York and New Jersey (A-53/54-95)

Argued January 2, 1996 -- Decided May 22, 1996

O'HERN, J., writing for a unanimous Court.

The question posed on this appeal is whether a worker entitled to receive workers' compensation benefits as an employee of one of the State's bi-state agencies receives those benefits on the same terms and under the same limitations as would other public employees in the State.

John Bunk is employed by the Port Authority of New York and New Jersey (the Port Authority). Bunk lives in New Jersey. On September 6, 1988, he was driving a Port Authority truck in New York City when the brakes failed and the truck struck a wall and several other vehicles, causing serious injuries to Bunk. Because of those injuries, Bunk was unable to resume his regular duties with the Port Authority. Bunk applied for an received Social Security disability benefits. He also applied for and received a disability retirement pension from the Port Authority. (The Port Authority funds its public employees' retirement through the New York State and Local Employees Retirement System.)

Bunk also sought compensation for his injuries under the New Jersey Workers' Compensation Act (Act). A Judge of Compensation, believing she was bound by N.J.S.A. 34:15-43 (Section 43) of the Act, denied any award for the permanent disability related to the accident. At the time, Section 43 provided that a former employee who had been retired on pension by reason of injury or disability was not entitled to compensation benefits for such injury or disability.

Bunk appealed the decision of the Judge of Compensation. The Appellate Division reversed, concluding that Hess v. Port Authority Trans-Hudson Corp. (Hess) had diminished the precedential value of Wright v. Port Authority of New York and New Jersey (Wright), which had applied Section 43 to Port Authority employees. The Hess court held that the Port Authority was not, for purposes of Eleventh Amendment immunity, a public body of the State.

The Supreme Court granted the Port Authority's petition for certification. The Attorney General intervenes on behalf of the Second Injury Fund because the combination of this injury and other occupational diseases may have left Bunk totally and permanently disabled.

HELD: N.J.S.A. 34:15-43 of the Workers' Compensation Act (Section 43), which limits workers' compensation benefits of public employees receiving a disability pension for the same injury, is applicable to an employee of the bi-state agency, Port Authority of New York and New Jersey.

1. In 1931, Section 43 was amended to prevent New Jersey state employees from simultaneously obtaining accidental disability pension benefits and workers' compensation benefits for the same injury. In 1951, New York and New Jersey agreed to waive the Port Authority's sovereign immunity and consented to suits, including workers' compensation suits, against the Port Authority. In 1971, the New Jersey Legislature amended various State retirement programs, the general effect of which was to allow New Jersey state employees to receive both workers' compensation and disability retirement benefits, with worker's compensation being offset against the retirement benefits. Against this backdrop, the Court looks to whether the Legislature intended that Section 43 apply to employees of the Port Authority. The Court also determines whether the application of section 43 to the Port Authority impermissibly infringes on the independence of that bi-state agency. (pp. 5-7)

2. The Port Authority is a public corporate instrumentality of New Jersey and New York. Neither New York nor New Jersey may unilaterally impose additional duties, powers, or responsibilities on the Port Authority. However, the Port Authority may be subject to complementary or parallel state legislation. (pp. 7-8)

3. There is evidence in the record that the provisions between the states are somewhat similar. The provisions in New York, like New Jersey, reflect a plan to coordinate disability benefits under public employee retirement and workers' compensation systems. Although a New Jersey state employee may have the advantage of being able to elect the greater of the benefits (retirement versus workers' compensation) Bunk may seek workers' compensation benefits under New York law. That opportunity for the exercise of parallel regulation suggests that each state's laws may be appropriately invoked. (pp. 8-9)

4. Bunk's reliance on Hess is misplaced. Whether the Port Authority enjoys Eleventh Amendment immunity is different from the question of whether the Port Authority exercises governmental functions as a state agency and whether Port Authority employees are covered by Section 43. A public body may be considered a hybrid institution; an agency of the state for some purposes but not for others. (pp. 9-11)

5. One of the central themes of the recent legislation is that there should not be double recovery from two sources for the same injury; that policy dominates the interpretation of Section 43. Given the mutual concerns of New York and New Jersey, the Court is satisfied that the Legislature would intend that the workers' compensation benefits afforded to Port Authority employees under New Jersey law should, at a minimum, be integrated with the disability retirement benefits afforded to the employee for the same injury. The injured worker should be able to receive the more advantageous of the benefits payable under the respective statutory provisions. The only way to integrate the statutory provisions is to apply Section 43 to this case. (pp. 12-17)

6. The recent amendments to Section 43 reaffirm the Legislature's intention to integrate workers' compensation and retirement-disability benefits. Because New Jersey cannot effectively control the New York retirement allowances granted to Port Authority employees, the practical method of integration of benefits is to reduce dollar-for-dollar the Jersey workers' compensation awards for Port Authority employees by the amount of the New York disability retirement allowances for the same injury. (pp. 17-19)

7. Because the Legislature intended the 1996 amendment apply to claims pending at the time of its enactment, Bunk is to continue the pending proceedings. He has the obligation to obtain the certified statement of benefits under New York law as a condition of any obligation for payment of workers' compensation benefits under New Jersey law. Those disability-retirement benefits shall be deducted from the workers' compensation award. (pp. 19-21)

The judgment of the Appellate Division is REVERSED. The matter is REMANDED to the Division of Workers' Compensation for further proceedings in accordance with this opinion.

CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, GARIBALDI, STEIN, and COLEMAN join in JUSTICE O'HERN's opinion.

The opinion of the Court was delivered by O'HERN, J.

The question in this appeal is whether a worker entitled to receive workers' compensation benefits as an employee of one of the State's bi-state agencies receives those benefits on the same terms and under the same limitations as would other public employees in the State. We hold applicable to an employee of the bi-state agency the provisions of N.J.S.A. 34:15-43 (Section 43) that limit workers' compensation benefits of public employees receiving a disability pension for the same injury.

I

Plaintiff, John Bunk, is an employee of the Port Authority of New York and New Jersey (the Port Authority or PA). We may also refer to him as he would be known in the compensation proceedings, as the "petitioner." Bunk is a resident of the State of New Jersey. On September 6, 1988, he was driving a Port Authority truck in New York City. The brakes of the truck failed. The truck struck a wall and several other vehicles, causing serious injuries to Mr. Bunk. The injuries left him unable to resume his regular employment with the Port Authority. Bunk applied for and received Social Security disability benefits. He also applied for and received a disability retirement pension from the Port Authority. (The Port Authority has elected to fund its public employees' retirement system through the New York State and Local Employees Retirement System.) The petitioner has also sought compensation for his injuries under the New Jersey workers' compensation system, N.J.S.A. 34:15-1 to -128. As a resident of New Jersey, Bunk can bring his action in New Jersey. See Parks v. Johnson Motor Lines,156 N.J. Super. 177, 181, 383 A.2d 734 (App. Div. ...


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