State News : New Jersey

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New Jersey

CAPEHART SCATCHARD

  856-235-2786

Adam Weiner worked for the Elizabeth Board of Education and received an award of 100% total and permanent disability on October 18, 2000.  That entitled him to $480 per week for 450 weeks and thereafter.  That award was reduced on January 9, 2001 to $340.98 per week due to the social security disability offset rate. 

 

            The key development in this case occurred on April 1, 2002, when Mr. Weiner began receiving an ordinary disability pension benefit.  He did not disclose his receipt of ordinary disability pension benefits to the Board of Education, so the Board kept paying him $340.98 per week. 

 

            On April 29, 2010, the Board sought approval to access Mr. Weiner’s pension records to determine if it was entitled to an offset.  On August 10, 2011, Weiner and the Board entered into a consent agreement reducing Weiner’s disability rate going forward to $222.39. But there was no agreement on past overpayments of $57,753.33.

 

            This action was filed by the Board to obtain reimbursement for the overpayments between April 1, 2002 through August 10, 2011 totaling $57,753.33.   A hearing took place on August 1, 2012, and on August 29, 2012 the Judge of Compensation denied the Board’s motion for reimbursement based on the conclusion that petitioner did not have the ability to repay the funds.  The Board of Education then appealed.

 

            The Appellate Division was guided by the principle that “an underlying theme of the workers’ compensation law is that there should not be duplicative payments for the same disability” (citingYoung v. Western Elec. Co., 96 N.J. 220, 231 (1984).  The Court said that there is a two-step process: first, the Judge of Compensation must determine if petitioner was unjustly enriched for which the respondent has the burden of proof.  Second, the respondent can then “institute enforcement proceedings in the Law Division . . . which may be treated as a summary proceeding.”Hajnas v. Engelhard Mineral & Chemical Co., 231 N.J. Super. 353, 363 (App. Div. 1989). 

 

            The Court said, “It is considered unjust enrichment to permit the recipient of money paid under mistake of fact to keep it, unless the circumstances are such that it would be inequitable to require its return.” (citations omitted).  In this case, the Court felt that the Judge of Compensation did not take a detailed look at the ability of the petitioner to make reimbursement payments.

 

No evidential hearing was held.  The compensation judge’s finding that Weiner was unable to repay the money, and therefore, it would be inequitable to order reimbursement, was supported solely by ‘several years of his Individual Income Tax Returns, the most recent of which shows an annual salary of $17,295 for 2010.’ No statement of assets and liabilities evincing Weiner’s net worth was produced.  Further, no statement of income and expenses was considered by the judge of compensation.

 

            The Court reversed and remanded fur further proceedings.  “We will not indulge in hypothetical speculation of a net worth which would support the immediate return of the payments, which all parties agree, should never have been made to Weiner. Nor will we reach a conclusion based on incomplete facts concerning whether, after considering Weiner’s income and expenses, a payment plan would be appropriate.”

 

            This case can be found at Weiner v. Elizabeth Board of Education, A-0627-12T2 (App. Div. July 15, 2013).  It is an important case for employers for a number of reasons.  The Appellate Division endorses the right of the employer to obtain reimbursement of benefits that are overpaid to the petitioner, including payments from a disability pension.  It is also important because the situation in this case is rather common, namely that someone receiving workers’ compensation later obtains a disability pension without that information ever getting to the employer or carrier on a timely basis.  Lastly, the case is significant because it sets forth specific requirements for each party in an unjust enrichment claim.