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Jeffrey Mcdaniel and Sandra Mcdaniel, His Wife v. Man Wai Lee and Pp Trucking

April 27, 2011

JEFFREY MCDANIEL AND SANDRA MCDANIEL, HIS WIFE, PLAINTIFFS-APPELLANTS/ CROSS-RESPONDENTS,
v.
MAN WAI LEE AND PP TRUCKING, INC., DEFENDANTS/THIRD-PARTY PLAINTIFFS-RESPONDENTS/ CROSS-APPELLANTS,
v.
FERNANDINO DEVERS*FN1 AND GELCO CORP., THIRD-PARTY DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-1280-10.

The opinion of the court was delivered by: Lihotz, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued February 16, 2011

Before Judges Axelrad and Lihotz and J. N. Harris.*fn2

The opinion of the court was delivered by LIHOTZ, J.A.D.

In this multi-vehicle auto negligence action, we examine whether N.J.S.A. 34:15-8, the fellow-servant provision of the Workers' Compensation Act (also referred to as the Act), N.J.S.A. 34:15-1 to -128, which prohibits co-workers involved in a work-related accident from suing each other, also bars a third-party action by a tortfeasor against plaintiff's co-worker. Defendant Man Wai Lee's third-party claim seeks indemnification and contribution based upon an assertion that the co-employee's negligence may have contributed to the accident causing plaintiff's injuries.

On our leave granted, plaintiff Jeffrey McDaniel*fn3 appeals from a provision in a July 8, 2010 order denying his request to dismiss a third-party complaint filed by defendants Man Wai Lee and PP Trucking, Inc. (PP Trucking) against plaintiff's co- worker Fernandino Devers. Plaintiff also appeals from additional provisions of the same order, which denied his request for frivolous litigation sanctions and prohibited counsel from representing both him and Devers in their respective personal injury actions against Lee. Defendants cross-appeal from a related provision permitting plaintiff's counsel to choose which of the two plaintiffs he will continue to represent, asserting the existence of a conflict demands counsel may not represent either plaintiff. We affirm the denial of sanctions, but reverse the denial of plaintiff's motion to dismiss and the order regarding counsel's continued legal representation.

I.

The essential facts are not in dispute. Plaintiff was employed by Sprint/Nextel. On the afternoon of September 23, 2008, while in the course of his employment, plaintiff was driving westbound on Raymond Boulevard in Newark. He stopped at a red light at the Blanchard Street intersection. Devers, plaintiff's co-worker, stopped directly behind plaintiff, driving another Sprint/Nextel vehicle. An eighteen-wheel truck, operated by defendant Lee, was behind Devers in the same lane of travel and failed to stop at the intersection, rear-ending Devers' vehicle. In a chain reaction, Devers' vehicle struck plaintiff's, which lunged forward. According to the separate interrogatory answers submitted by plaintiff and Devers, Lee's truck struck Devers a second time, causing it again to collide with the vehicle driven by plaintiff pushing it further into the intersection. Lee told the responding Newark Police officer that "when the light turned red, he applied the brakes but the vehicle didn't stop quick[ly] enough[,] causing him to strike [Devers' vehicle] in the rear and causing [Devers'] vehicle [] to rear-end [plaintiff's] vehicle." Devers was taken by ambulance to University Hospital; plaintiff drove himself to the hospital.

Plaintiff and Devers filed separate worker's compensation petitions as a result of their respective injuries suffered in the accident. Additionally, Devers filed a complaint in the Law Division (Docket No. ESX-L-6655-09), against Lee and his employer, defendant PP Trucking, the truck's owner. Plaintiff also filed an action against Lee and PP Trucking (Docket No. ESX-L-1280-10). Both Devers and plaintiff were represented by the same attorney. The two matters were later consolidated for trial.

In addition to answering plaintiff's complaint, defendants filed a third-party complaint against Devers, alleging his negligent operation of his employer's vehicle contributed to plaintiff's injuries. The third-party action sought indemnification and contribution.*fn4

Plaintiff sent a Rule 1:4-8(b)(1) notice to Lee's attorney requesting the withdrawal of the third-party action, which he characterized as frivolous. He also advised of his intention to request sanctions if Lee declined to withdraw the pleading within twenty-eight days. When Lee declined his request, plaintiff moved to dismiss. Lee cross-moved to disqualify plaintiff's attorney, claiming a conflict of interest. At the conclusion of oral argument, the court denied both motions without prejudice.*fn5

Plaintiff renewed his motion to dismiss the third-party complaint as frivolous, and sought sanctions. The motion judge denied plaintiff's motion and granted, in part, defendant's cross-motion to disqualify counsel, ordering that he could represent either Devers or plaintiff. The court gave counsel thirty days to determine which party he would continue to represent. We granted the cross-requests for leave to appeal filed by plaintiff and Lee.

II.

There are distinct but related issues to be examined: whether the third-party complaint by Lee against Devers can proceed and whether it is permissible for counsel to represent Devers and plaintiff in their respective actions against Lee and PP Trucking. Plaintiff, relying on N.J.S.A. 34:15-8 of the Act, asserts the third-party suit must be dismissed, as plaintiff cannot prosecute a negligence claim against Devers. Plaintiff urges that because the parties' interests are not adverse, the same attorney can proceed on each plaintiff's behalf. To the contrary, Lee argues he is entitled to file a third-party action and obtain a third-party negligence verdict against Devers. Additionally, Lee maintains the conflict of interest between plaintiff and Devers precludes counsel from representing either plaintiff. We will examine each of these issues.

"The workers' compensation system represents the bargain that was struck between employers and employees concerning workplace injuries, whereby employers shoulder the expense of workers' injuries arising out of the performance of work duties." Basil v. Wolf, 193 N.J. 38, 53 (2007). The Workers' Compensation Act "provide[s] a method of compensation for the injury or death of an employee, irrespective of the fault of the employer or contributory negligence and assumption of risk of the employee." Harris v. Branin Transport, Inc., 312 N.J. Super. 38, 46 (App. Div.), certif. denied, 156 N.J. 408 (1998). The Act serves as "the exclusive remedy for an employee who sustains an injury in an accident that arises out of and in the course of employment." Ahammed v. Logandro, 394 N.J. Super. 179, 190 (App. Div. 2007) (citing N.J.S.A. 34:15-8). See also Basil, supra, 193 N.J. at 55. "Fundamental to the Act is the premise that by accepting the benefits provided by its schedule of payments, the employee agrees to forsake a tort action against the employer." Ramos v. Browning Ferris Indus., Inc., 103 N.J. 177, 183 (1986). See also N.J.S.A. 34:15-8.*fn6

The statute's exclusivity bar also prohibits an injured employee's legal action to recover for injuries caused by a fellow employee. Basil, supra, 193 N.J. at 54 n.7. See also Barone v. Harra, 77 N.J. 276, 278 (1978) (reiterating that the Act "precludes tort actions against fellow employees for compensable actions occurring while both persons are in the same employ, except for intentional wrongs"). Specifically, N.J.S.A. 34:15-8 provides, in pertinent part, "a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for intentional wrong." This provision blankets co-employees with immunity from suit by injured co-workers. Conrad v. Robbi, 341 N.J. Super. 424, 438 (App. Div.), certif. denied, 170 N.J. 210 (2001).

"The purpose of the [immunity provision] was not so much to protect the fellow servant from liability as it was to protect the employer from paying twice, once through compensation and a second time through indemnification of the fellow servant against the injured employee's judgment." Ahammed, supra, 394 N.J. Super. at 190. The Legislature intended to prevent burdening the employer indirectly with the common-law damages superimposed upon his work[ers'] compensation liability by reason of either a legal, moral or practical obligation to indemnify the sued . . . employee, or with the expense of carrying insurance to cover the personal liability of such . . . personnel. [Miller v. Muscarelle, 67 N.J. Super. 305, 321 (App. Div.), certif. denied, 36 N.J. 140 (1961).]

"In order for the statute to apply as a bar to a suit against a co-employee, three conditions must be satisfied: (1) the plaintiff must have suffered a compensable injury; (2) the plaintiff and defendant must have been co-employees; and (3) the defendant must have been acting 'in the course of his employment.'" Daus v. Marble, 270 N.J. Super. 241, ...


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