State News : New Jersey

Desirae Cintron was injured in a motor vehicle accident on September 20, 2011 while walking in the parking lot of a Wal-Mart store where she worked.  She was struck by a vehicle driven by Marvin Thomas.  Cintron was eligible for PIP benefits because she lived with her father who had an insurance policy with NJM.  She brought a law suit against Thomas in civil court for damages.

The issue of Wal-Mart’s workers’ compensation lien arose as part of the civil suit with defendant Thomas taking the position that Wal-Mart had no lien rights because evidence of PIP benefits, which are collectible or paid under a standard PIP policy, are inadmissible in a civil action for recovery of damages. Because the plaintiff would not be able to recover her medical bills, the Defendant contended that Wal-Mart would not be able to recover its lien for the payment of these bills. Defendant argued that part of the automobile reform legislation was a provision insulating a tortfeasor or person responsible for the accident from a claim for medical expenses and wage benefits that are paid by PIP.  The way this was accomplished was through a provision in the PIP law under N.J.S.A. 39:6A-12, which bars evidence of PIP benefits which are collectible or paid under an auto insurance policy. What this does, in effect, is prevent a double recovery of PIP benefits already paid out or due to the insured in a subsequent action.

Wal-Mart intervened in this case to protect its lien. It contended that N.J.S.A. 39:6-12 did not apply to a suit involving an automobile accident in which the workers compensation carrier paid the medical bills. Because the costs of the work-related auto accident are ultimately borne by the workers comp carrier, these benefits are not “collectible or paid” through PIP coverage and are admissible. Thus, it should be entitled to assert its lien to collect on the medical bills it paid.  

Defendant relied heavily on the unreported case of Dever v. New Jersey Mfrs. Ins. Co, 2013 Wl 5730033 (App. Div. Oct. 23, 2013) for the proposition that there is no workers’ compensation lien in this situation.  Wal-Mart, which was represented by Capehart Scatchard through Gina Zippilli Esq. and Betsy Ramos, Esq., argued to the contrary  thatDever is entitled to no precedential value and that the controlling case in this area isLefkin v. Venturini, 229 N.J. Super. 1 (App. Div. 1988).  

The Honorable Darrell Fineman, J.S.C., Law Division, Cumberland County, held in favor of Wal-Mart.  “Plaintiff’s workers’ compensation lien is admissible because precedential case law controls, and there has been no indication that the statute has been changed as to workers’ compensation through the enactment of AICRA.”   The Judge said that theLefkin case is binding on the court.  The Judge reasoned that workers’ compensation is ultimately responsible for payment of medical bills in a situation where the PIP carrier makes the initial payment.  The PIP carrier has a right of reimbursement against the workers’ compensation carrier.  Therefore, evidence of the medical bills should not be barred in the civil suit because they are not collectible under the PIP policy.  The Judge concluded:

In the case where both workers’ compensation and PIP apply, the workers’ compensation system is the ultimate payer of the plaintiff’s medical bills.  Therefore, it makes little sense to apply a bar created for the PIP statutory scheme and not a part of workers’ compensation statutory scheme.

This decision, which was rendered on February 23, 2015, is now the second decision in the Superior Court in the past few months rejecting theDever case as having no precedential value and essentially being wrongly decided.  It is an important decision because there are so many employers in New Jersey who are trying to recover workers’ compensation liens where plaintiffs are defending by means of the Dever case.   For further information on this case, please contact Betsy Ramos, Esq. atbramos@capehart.com. 

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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 jgeaney@capehart.com.