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The case of Kaur v. Garden State Fuels, Inc., A-2135-17T1 (App. Div. April 12, 2019) presents some interesting legal issues. The facts begin with the tragic death of Surinder Singh, who was shot and killed during the course of his employment at Woodbury Gulf LLC.
In 2014 Singh’s widow, Kirandeep Kaur, filed a dependency claim petition in workers’ compensation. The gas station was uninsured for workers’ compensation at the time of her husband’s death. Mr. Goyal and Mr. Saini were the sole members of the Woodbury Gulf LLC.
In 2015 Kaur sued Woodbury Gulf civilly alleging that the station’s negligence led to the death of her husband. She amended that suit in 2017 to add a claim against Mr. Goyal.
On March 28, 2016, petitioner settled her workers’ compensation dependency claim petition for $150,000. She said that she understood that the Section 20 settlement was final and that she could not return for further workers’ compensation benefits. Petitioner received mostly deferred payments from the two members of the LLC: $30,000 up front followed by $5,000 each month for 24 months. The Order recited that the settlement was not a complete and absolute surrender and release of any and all rights of petitioner’s dependents under Section 13. This was important because the petitioner and decedent had two young children.
The Judge of Compensation did not sign the 2016 order but waited until 2018 when all payments had been made. Counsel reappeared on April 13, 2018, and the Judge again commented that this Section 20 settlement did not contemplate a release of decedent’s dependents’ rights.
Meanwhile in her civil law suit, Kaur made some interesting arguments:
1. She argued that she could sue Woodbury civilly because the gas station’s insurance had lapsed. She contended that this was akin to an intentional wrong, thereby exempting her from the fundamental rule that neither an employee nor an employee’s dependents can sue the employer.
2. She also argued that payments under a Section 20 are not recognized as workers’ compensation payments for any purpose other than for insurance rating purposes, so a civil suit should be permitted.
The motion judge ruled for Woodbury LLC and its members, holding that the civil law suit was barred. Kaur appealed. The Appellate Division devoted a good deal of analysis to Section 20 settlements. It said, “A Section 20 settlement bars a subsequent lawsuit against the paying employer as it would be unfair to hold the employer liable for both common law damages and workers’ compensation liability,” citing Hawksby v. DePietro, 165 N.J. 58 (2000).
The Court also seemed to suggest that a Section 20 settlement amounts to an implied acknowledgement that a claimant’s disability is work related, citing the Sperling case for this concept. For these reasons the Appellate Division affirmed the ruling that petitioner and her children could not sue her husband’s employer or the members of the LLC.
As for the failure of Woodbury to maintain insurance for its own employees, the Court pointed out that this was potentially either a disorderly person offense or a fourth-degree crime, depending on whether the actions were willful. Nonetheless, the Court ruled, “Their failure to maintain insurance did not alter the effect of the Workers’ Compensation bar, especially since plaintiff took advantage of the Act’s statutory scheme to obtain benefits under the Section 20 settlement.”
Importantly, the Court confirmed that consent of the workers’ dependents must be obtained for a Section 20 settlement that purports to waive dependency benefits. In sum, the Court held that the two minor children were entitled to bring a dependency claim of their own against Woodbury Gulf and the members of the LLC. The Court cited the Kibble case for the proposition that “a Section 20 settlement between the employer and a claimant ‘cannot extinguish the rights of those who do not participate, or do not have the opportunity to participate in a settlement.’”
The case is helpful in understanding that it does not really matter whether the workers’ compensation claim is resolved under an order approving settlement with reopener rights or a Section 20: in either case, the claimant and his or her dependent cannot bring a civil action against the employer since the exclusive remedy is workers’ compensation.
John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group. Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at firstname.lastname@example.org.