On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Morris County, L-21-97.
Before Judges Petrella, Kestin, and Steinberg.
The opinion of the court was delivered by: Steinberg, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: February 25, 2002
Plaintiff Thomas O'Brien appeals from an order granting the motion of intervenor Local 464A UFCW Group Reimbursement Welfare Fund (Fund) to enforce its claimed right of subrogation. Plaintiff initially sued defendants Two West Hanover Company and Lorraine Benkendorf, doing business as Benkendorf Electrolysis, for personal injuries. The Fund is a union benefits plan which provides medical, surgical, and hospital benefits to participants. After plaintiff's personal injury claim was settled, the Fund moved to intervene for the purpose of enforcing its claimed lien for medical payments it had expended on plaintiff's behalf. While plaintiff's procedural history does not provide a full explanation, it appears the parties agreed to enter into a stipulation of facts they believed relevant to allow the judge to make a legal determination of the Fund's claim.
The parties stipulated that the Fund's plan "is governed by ERISA." The stipulation also provided as follows:
The Plan provides that a member must first seek payment of medical expenses from "other sources," including the proceeds of any lawsuit, before payment is authorized by the Plan.
The Plan provides expressly that the payments from "other sources" include only payments intended as compensation for medical expenses[,] not injuries:
If you have been involved in any form of . . . accident and can be paid for your medical and surgical expenses, you must seek reimbursement . . . [.]
If you have . . . any other source from which you can receive . . . damages which would include a claim for recovery of costs of medical hospital care . . . [you must pursue such source.]
So that the members will understand, this Plan has been adopted for the Protection of our Members to make certain that they will be made whole and not be compelled to pay out of their own pockets, whenever possible, for medical and hospital care.
Plaintiff executed a subrogation agreement, which assigned "to Local 464A and United of Omaha the right to receive and collect" the proceeds of any funds received, or to be received, as a result of litigation. The agreement further provided that its purpose was to reimburse the Fund for any and all expenses incurred as a result of payment of hospital, medical, and related bills on plaintiff's behalf.
The Fund paid medical benefits of $38,840 for plaintiff and asserted that its "lien," less a one-third attorney fee, was $25,906.33. The eighth paragraph of the stipulation reads as follows:
The underlying case was settled for $275,000.00, an amount that constituted less than full compensation to the Plaintiff for his injuries, which include a $360,000 wage loss and significant loss of function in his lower back. Plaintiff compromised his claim because his need for back surgery did not appear until more than two years after his slip and fall and there were, consequently, doubts about Defendants' liability. Although the Plan ...