Unpublished Bergen County Law Div Case on interplay of Workers’ Comp Liens and Subrogation Law

NJ Transit Corporation v. Sanchez, et. al., an unpublished Bergen County trial court decision held that the workers’ comp carrier could not pursue it’s lien against the tortfeasor because the injured employee was barred from filing suit because of the verbal threshold statute. The injury did not breach the verbal threshold. The decision rested upon the basic subrogation principle that the right of subrogation cannot be superior to the subrogee’s right to sue.

 

Although this is an unpublished Law Div opinion, it is rich with the interplay of workers’ comp lien law and subrogation law.  Briefly, the defendants relied upon Continental Ins. Co. v McClelland, 288 N. J. Super. 185 (App. Div. 1996), defendant’s liability is not affected by the fortuitous circumstances that plaintiff was entitled to workers’ comp. The comp carrier’s rights rise no higher than the employee’s rights to which it is subrogated. Id. at 189 – 90. Plaintiff incorrectly relied upon Lambert v. Travelers Indem. Co. of Am., 447 N. J. Super. 61 (App. Div. 2016), because that case allowed the reimbursement of the workers’ comp lien per N.J.S.A. 34:15-40 where the employee was involved in an on the job MVA and WC handled the medical bills, not PIP so the meds went to the jury. In Lambert, plaintiff was able to file suit and put the meds on the board as it would have been unfair if the plaintiff had to reimburse the worker’s comp lien without being allowed to include them as damages to the jury. Here, the injured party was barred from filing suit because the he did not breach the verbal threshold. Also, plaintiff (workers’ comp carrier) was seeking reimbursement of economic loss and correctly noted that economic damages are not governed by the verbal threshold statute. Plaintiff further argued that is well settled that a workers’ compensation carrier may independently subrogate against the tortfeasor even if the worker declines to file suit. However, it is also well-settled that a subrogor stands in the shoes of a subrogee and does not have the right to recover superior to the subrogee. Here, the victim did not sustain any economic loss, the workers’ comp carrier did, the lien. And, because the verbal threshold statute prevented the injured party from filing suit, the workers’ comp carrier was likewise barred from filing suit/seeking reimbursement of it’s comp lien.

 

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