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New Jersey employers know that they have a right to subrogate against the party who caused injury to their employee to recover workers’ compensation benefits paid, but they must wait one year before taking any action. After one year, if the injured worker has not pursued a third party action, the employer must make a written demand on the injured employee giving the employee 10 days to pursue such action, or else the employer will file it in his or her name. But what if the employer neglects to send the 10 day letter and then tries to bring suit?
That was the precise issue in Hartford Underwriters Insurance Company v. Jacquelin Salimente, A-3687-14T2 (App. Div. February 6, 2017). A Hartford insured employee, Mishkoff, had been injured in a work-related accident by Salimente, who had lost control of her vehicle, causing injuries to Mishkoff. But Mishkoff never filed suit against Salimente. On the last day that the statute would have run, Hartford filed suit (failing to sue in Mishkoff’s name) against Salimente to protect its lien of $16,332.79 for workers’ compensation payments it had made to Mishkoff. However, Hartford failed to provide proof that it had issued a 10-day notice. Salimente’s carrier moved to dismiss the case for failure to comply with the statute under N.J.S.A. 34:15-40. The trial judge dismissed Hartford’s suit, and Hartford appealed.
The Appellate Division reviewed old case law indicating that the 10-day notice can be waived, particularly where the carrier notified the injured worker of his right to sue. Hartford produced two letters, one to Mishkoff two months after the accident and then other to Mishkoff’s counsel 18 months afterward. In the first letter, Hartford informed Mishkoff of its subrogation rights and asked him whether he intended to pursue a third-party action. In the second letter, Hartford asserted its subrogation rights, and it requested that Mishkoff advise whether he was pursuing a third party action. Unfortunately, these letters were not produced by Hartford at the time of the initial hearing in Superior Court. Had they been timely produced, perhaps the trial judge would not have dismissed Hartford’s case.
The Appellate Division considered Hartford’s motion to reopen the record and agreed that the case should not have been dismissed because the purpose of the 10-day letter is to inform the injured worker of his or her rights to pursue a third party action. The letters that Hartford wrote to Mishkoff satisfied this purpose. Therefore the Appellate Division allowed Hartford to pursue the third party claim on behalf of Mishkoff.
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.