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Marano v. Schob

Superior Court of New Jersey, Appellate Division

June 20, 2018

PAOLO MARANO, Plaintiff-Appellant,
v.
CLIFFORD J. SCHOB, M.D., and COMPREHENSIVE ORTHOPEDICS, PA, Defendants.

          Argued June 4, 2018

          On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-6604-12.

          E. 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).

          Before Judges Sabatino, Ostrer and Firko.

          OPINION

          SABATINO, P.J.A.D.

         In 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.

         Similarly, 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.

         For the 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.

         I.

         The 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 incident.

         Plaintiff 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.

         Plaintiff 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 non-treatment charges.

         In 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 ...


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