On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-12926-95.
Before Judges Stern, A. A. Rodríguez and Fall.
The opinion of the court was delivered by: Rodriguez, A. A., J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: January 9, 2001
Three novel issues are presented in this appeal and cross appeal: (1) whether a workers' compensation lien, arising by operation of N.J.S.A. 34:15-40, attaches to the full amount of a wrongful death recovery from a third party or only to that portion of the recovery which is deemed "lost wages damages;" (2) whether the workers' compensation lien should attach to a survival action recovery from a third party when the injured worker did not file a claim petition nor receive any workers' compensation benefits; and (3) whether the "intentional wrong" exception to the exclusive remedy provision set forth by N.J.S.A. 34:15-8 applies to an employer whose past and present practices have recklessly exposed its employees to substantial risks of death or injury. We hold that the workers' compensation lien attaches to any amount recovered in a wrongful death action, but that it does not attach to the proceeds of a survival claim for pain and suffering when the injured employee had not filed a claim petition nor received any workers' compensation benefits. We also hold that the facts presented here do not implicate the "intentional wrong" exception.
The relevant facts are undisputed. Michael DeLane, a firefighter with the Newark Fire Department, died from electrocution while fighting a fire. He was thirty-three years old. A fellow firefighter, Juan Ramos, was also electrocuted while fighting the same fire. Fortunately, Ramos survived.
The events leading up to this accident can be summarized as follows. In the early morning hours of October 29, 1994, the Newark Fire Department responded to a fire at Chester Avenue in Newark. The firefighters were organized into four engine companies, two ladder truck companies and one rescue company. Captain Bruce Paynter was the commander of one of the ladder truck companies. Ramos, a probationary firefighter in Paynter's company, positioned an aerial ladder on the roof of the burning building between overhead primary electrical supply wires conveying 1,300 volts and secondary electrical supply wires conveying approximately 600 volts. The wires were six to twelve inches above and below the top of the ladder. Once in place, four firefighters, including Paynter and Ramos, climbed the ladder to cut ventilation holes in the roof. A power saw was brought atop the roof to cut the holes.
DeLane, a member of the rescue company, climbed the ladder to the roof to aid the others. Heavy fire and smoke bellowed from every opening of the building. The roof began to show signs of deterioration. Paynter ordered all firefighters off the roof. Ramos and DeLane were the first and second, respectively, to descend the ladder.
After Ramos had reached ground level, DeLane requested his assistance to remove the power saw from the roof. Ramos climbed the ladder again but stayed below the level of the power lines. DeLane passed the saw to Ramos under the wires. While both men were holding the saw, it struck a primary wire. Ramos was electrocuted and became unconscious. DeLane was electrocuted but remained conscious. He called out for someone to help Ramos. He told a fellow firefighter, Ron Ballew, that his left side was numb. Ballew tried to crawl under the wires, but DeLane stopped him to prevent him, too, from coming in contact with the wires. Paynter called for assistance. Ramos was removed from the ladder. The injured DeLane slid towards the wire and came in contact with it a second time. He was pronounced dead at the hospital about one hour later.
DeLane's wife, Heidi DeLane, acting individually and as Administratrix of his Estate (plaintiff), and the Newark Firemen's Union sued the City of Newark, its fire department, its Fire Director and Fire Chief (Stanley Kossup), and Captain Paynter (collectively "the City"), as well as Public Service Electric and Gas (PSE&G). The complaint alleged several causes of action, including a claim for DeLane's pain and suffering prior to his death (the survival claim) and a claim for his wrongful death. Ramos and his wife also filed a lawsuit against the same defendants. The two lawsuits were consolidated.
The City answered and cross-claimed against the State of New Jersey and PSE&G. After a period of discovery, the City and its employees moved for summary judgment pursuant to the exclusive remedy provisions set by N.J.S.A. 34:15-8. The judge issued a written opinion granting summary judgment, dismissing all claims by plaintiff and Ramos against the City, its fire department, and its employees. The Ramos settled with the remaining defendants.
PSE&G offered plaintiff $500,000 to settle the claims against it. At the time of DeLane's death, his wife and his parents, Jude and Carmela DeLane, were economically dependent on him. As such, the DeLanes agreed to the following allocation of the $500,000 settlement. First, the amount of the settlement was split evenly between the survival and wrongful death claims. From the $250,000 settlement allocated to the survival claim, $110,000 would be paid to Heidi, $60,000 to the parents, and $80,000 to satisfy costs and attorney's fees. From the $250,000 settlement allocated to the wrongful death claim, $96,080 would be paid to Heidi, $75,200 to the Estate's attorney as costs and fees, $10,200 to the parents, $4,800 to the parents' attorney, and $63,720 to the City to satisfy, in full, its workers' compensation lien.*fn1 This allocation was based on a comprehensive study by Frank D. Tinari, Ph. D., an economist, which was submitted to the trial court. Dr. Tinari projected that the wrongful death damages sustained by the DeLanes totaled $1,438,166.
The DeLanes accepted the offer subject to two conditions: (1) the judge's approval of a limitation on the workers' compensation lien to $62,466, to be paid only from Heidi's share of the lost wages damages; and (2) any appellate reversal of the proposed allocation would void the entire settlement. The judge granted plaintiff's motion and approved the settlement against PSE&G, allocated the settlement as proposed by the DeLanes and ordered that the City's workers' ...