June 4, 2018
appeal from Superior Court of New Jersey, Law Division, Essex
County, Docket No. L-6604-12.
Drew Britcher argued the cause for appellant (Britcher Leone,
LLC, attorneys; E. Drew Britcher, of counsel and on the
brief; Daniel F. Nicholas, on the brief).
Christopher J. Carlson argued the cause for respondent PMA
Companies (Capehart & Scatchard, PA, attorneys;
Christopher J. Carlson, of counsel and on the brief).
Judges Sabatino, Ostrer and Firko.
Pool v. Morristown Memorial Hospital, 400 N.J.Super.
572, 57 7 (App. Div. 2 008), we held that a workers'
compensation lien under N.J.S.A. 34:15-40 attached to funds
that an injured plaintiff received from a defendant physician
in a medical malpractice case pursuant to the terms of a
"high/low" agreement. We ruled that the money paid
to plaintiff as the negotiated "low" figure in
accordance with the agreement was subject to the statutory
lien, even though a jury had rendered a "no cause"
verdict in favor of the physician and absolved him of
liability. Id. at 575-77.
in the present case, despite a "no cause" decision,
an injured plaintiff recovered the "low" amount
under a high/low agreement he entered into with defendants
who provided medical treatment to him after a work-related
accident. Relying upon Pool, his employer's
workers' compensation carrier seeks to enforce its lien
for compensation benefits it paid to plaintiff. Plaintiff
argues that N.J.A.C. 11:1-7.3(a)(1), a regulation adopted by
the Department of Banking and Insurance exempting certain
payments made under a high/low agreement from physician
reporting requirements, alters the analysis in Pool.
Plaintiff claims the regulation renders the compensation lien
unenforceable in this setting.
reasons that follow, we reject plaintiff's novel
argument. We concur with the trial court that the regulation
does not affect the validity and enforceability of the
carrier's Section 4 0 lien, and that the lien applies to
the proceeds collected by plaintiff from the medical
malpractice defendants. We also reject plaintiff's
alternative request that we repudiate our decision in
Pool. However, we remand this matter to the trial
court for the limited purpose of reconsidering a disputed
portion of the overall lien amount.
relevant facts and procedural history are essentially
undisputed. Plaintiff Paolo Marano was a police officer
employed by the Union Township Police Department. On July 12,
2010, he sustained injuries to his back in a work-related
sought treatment from an orthopedic surgeon, Clifford J.
Schob, M.D., at Comprehensive Orthopedics, PA
("Comprehensive").According to plaintiff's
unproven allegations in the medical malpractice case, Dr.
Schob did not properly diagnose his condition and negligently
failed to advise him to visit the emergency room.
underwent extensive medical and rehabilitative treatment for
his injuries. Because the injuries were work-related,
plaintiff received workers' compensation benefits from
respondent PMA Companies ("PMA"), the third-party
administrator for Union Township. The amount of compensation
benefits paid by PMA from August 1, 2 013 through March 29,
2016 totaled $51, 779.81.That total included $5, 403.07,
which are characterized as "case management" and
September 2012, plaintiff filed a complaint in the Law
Division, alleging medical negligence on the part of
defendants Dr. Schob and Comprehensive. After defendants
filed an answer denying liability, the parties entered into a
high/low agreement. In connection with their agreement, the
parties elected to have the medical malpractice claims
resolved through binding arbitration.They agreed that,
following the arbitrator's decision, plaintiff ...