A Capehart Scatchard Blog

Workers’ Comp Lien Applies to Medical Payments That Could Have Been Paid Through Plaintiff’s PIP Carrier

Ever since the decision in Dever v. New Jersey Mfrs. Ins. Co., No. A-3102-11T2, (App. Div. Oct. 23, 2013), plaintiffs’ counsel have been arguing that respondents do not have a lien for medical bills paid in workers’ compensation from a work-related car accident where the plaintiff had PIP coverage.  But civil courts have not been following Dever, and workers’ compensation carriers won another big decision on this issue in Talmadge v. Burn, No. A-3160-14T1 (App. Div. June 22, 2016).

Tina Talmadge was injured while working for Child and Family Services, Inc.  She was driving her own car when her vehicle was struck by a car driven by Ms. Burn.  Plaintiff underwent a cervical fusion procedure, and The Hartford Insurance Company (workers’ compensation carrier) paid $127,000 in medical and indemnity benefits.  The Hartford sought reimbursement of two thirds or approximately $84,500 and intervened in the civil case from which plaintiff recovered $250,000 as damages.   Plaintiff conceded that she owed two thirds of the indemnity benefits but argued that The Hartford had no right to a lien on medical benefits because as a no-fault insured, she herself could not recover medical benefits from the other no-fault insured Burns.  She contended that if she could not make a recovery of medicals in her law suit, The Hartford could not either as its rights are derivative of her own rights.

Both the trial judge and the Appellate Division rejected plaintiff’s arguments. The Appellate Division initially observed, “When an employee suffers an automobile accident while in the course of employment, workers’ compensation is the primary source of satisfaction of the employee’s medical bills, as provided by the collateral source rule, N.J.S.A. 39:6A-6, which ‘relieves the PIP carrier from the obligation of making payments for expenses incurred by the insured which are covered by workers’ compensation benefits.'” 

The Court went on to discuss how the PIP statute interacts with the workers’ compensation statute.  “In instances where an employee, as a result of a work related automobile accident injury, also has a claim for recovery against a third party, the Legislature overcame the possible ‘inequity of double recovery’ by including section 40, which requires an injured employee to refund paid workers’ compensation benefits once recovery is obtained from the tortfeasor, thereby avoiding duplication of the workers’ compensation benefits by the tort recovery.”

The Appellate Division concluded, “The employer’s workers’ compensation carrier’s lien, which includes medical expenses paid, must be satisfied from plaintiff’s $250,000 recovery from Burn.”  It did not matter that plaintiff could not recover the medicals from the other party in her law suit.  The Court made clear that this was still a double recovery.  In this practitioner’s opinion, the Appellate Division got it right in Talmadge. Dever is an outlier case because the workers’ compensation carrier was not even a party to that decision.  The dispute in that case involved the UIM carrier, and the comments in Dever regarding the workers’ compensation lien were what is known as “dicta,” the expression of an opinion that went beyond the facts before the court.


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About the Author

About the Author:

John H. Geaney, a shareholder and co-chair of Capehart Scatchard's Workers' Compensation department, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.


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