On appeal from a judgment of the Division of Workers' Compensation.
Before Judges Dreier, D'Annunzio and Costello. The opinion of the court was delivered by Costello, J.
The opinion of the court was delivered by: Costello
The opinion of the court was delivered by
COSTELLO, J.S.C., (temporarily assigned).
Respondent-employer appeals from a decision by a Judge of Compensation granting petitioner-employee's application for commutation of benefits. We affirm.
On August 25, 1992, Avelino M. Vieira fell and was impaled on a stake in an employment related accident. Vieira is a paraplegic as a result of his injury and is totally and permanently disabled. He was awarded 450 weeks of disability at the rate of $339.56 per week, beginning January 28,1993. In the normal course, the benefits would continue to September 25, 2001. The Judge of Compensation commuted 60 weeks of the award. As a result, Viera would receive a lump sum of $20,373.60 now, and the carrier would discontinue payments for the last 74.6 weeks of the award, beginning April 30, 2000, the carrier would discontinue payments. This means petitioner would lose benefits which would have totaled just under $5,000 in exchange for the commutation. At the time of his accident he was married with a young son. He had owned a two-family home for six years, encumbered by a $143,000 mortgage. He had accumulated $20,000 in savings.
Six months after the accident his wife divorced him. She has custody of their son, now age seven. The employee remained living in the house they owned before the accident, which was renovated to be made wheelchair accessible at a cost of $60,000. He owns a van which has been modified to be driven by a paraplegic. The costs of both those modifications were paid by the employer's insurance company.
The employee's fixed expenses roughly match his income. He receives approximately $2,904 in income each month, including his disability payment, rent from his tenant, social security benefits and a small union disability benefit. His expenses include child support, a mortgage payment and insurance for the van. However, he has variable expenses for food, clothes, other car expenses, entertainment and the like for which he has needed supplemental income. To meet these expenses, he has spent his savings, borrowed $6,000 from his sister and refinanced the house to take out $10,000 in equity. He recently made a $9,000 payment to his ex-wife as required by the Judgment of Divorce to buy out her marital interest in the home.
He testified that without supplemental income he cannot afford to take his son out for a hamburger and that he is eating poorly because he cannot afford groceries. Vieira would like to buy a snow-blower to maintain his property in the winter for himself and his tenant. He would like to purchase health insurance for his son. (Under the Judgment of Divorce, Vieira is responsible for one-half of the child's medical expenses which have been routine medical and dental care to date. However, he strongly desires to purchase health insurance to protect the child.)
He uses the van daily to go to physical therapy and exercise programs and several times a week to go food shopping, usually with money his sister gives him. He has no history of alcoholism or gambling and has a history of financial stability. The Compensation Judge found Vieira to be credible and trustworthy regarding his financial needs and planning.
Vieira has a third-party action pending in the Superior Court in Cape May County, New Jersey, including a claim for economic losses of between two and three million dollars. Discovery is expected to conclude in the next few months, and a summer 1997 trial date is expected. In support of the application for commutation, counsel for the target defendant in the third-party case acknowledged in writing the complexity of the case and stated that he expected that the employee would be receiving a settlement offer from one or more of the defendants. There has already been an OSHA determination that the target defendant violated safety regulations.
The issue presented is whether commutation is appropriate under N.J.S.A. 34:15-25 which provides in part:
Compensation may be commuted by the bureau at its present value, when discounted at five per centum (5%) simple interest, upon application of either party, ... if it appears that such commutation will be for the best interest of the employee ... or that it will avoid undue expense or undue hardship to either party. ...
In determining whether commutation will be for the best interest of the employee ..., or that it will avoid undue expense or undue hardship to either party, the bureau and the [Superior] Court will regard the intention of this chapter that compensation payments are in lieu of wages, and are to be received by the injured employee or his dependents in the same manner in which wages are ordinarily paid. Commutation is to be allowed only when it clearly appears that an unusual circumstance warrants a departure from the normal manner of payment and not ...