Is Paying Temporary Total Disability Benefits Still an Admission of Liability In New Jersey Workers’ Compensation?

By Kristy Olivo Salvitti, Esq.*

Respondent attorneys have long advised their clients not to fear the admission of liability when paying medical benefits based on N.J.S.A. 34:15-15. This section clearly states that “[t]he mere furnishing of medical treatment or the payment thereof by the employer shall not be construed to be an admission of liability.” This often led to the obvious follow-up question as to whether the section applies to payment of temporary total disability benefits while a claim is under investigation. Unfortunately, there has been no clear comparable section of the statute or case law that offered the same protection, …. that is, arguably, until now.

The Superior Court of New Jersey appears to have addressed this very question, perhaps unintentionally, in the matter of Kelly Greene v. AIG Casualty Company, 77 A.3d 515 (App. Div. 2013). If not read carefully, you might surmise that the issue, as laid out in the first paragraph of the decision, was “whether respondent …which paid workers’ compensation benefits to petitioner… is entitled to a lien against her [third party] settlement… pursuant to Section 40 of the Workers’ Compensation Act, even though her injury was ultimately non-compensable.” (By the way, the answer is yes; respondents are entitled to their Section 40 lien, even if a claim is deemed non-compensable).

The facts of this case, however, seem to have a deeper implication. Here, the carrier initially sent a letter to the petitioner denying the claim. However, only days later, the carrier authorized medical treatment. It is unclear whether there was a second letter or any other subsequent communication between the carrier and the petitioner authorizing the same. It is further unclear as to exactly when they began paying temporary total disability benefits. After the claim petition was filed, the carrier answered that the claim was “under investigation” regarding whether the petitioner was in the course and scope of employment. The court noted that, despite the claim being under investigation, the carrier “continued to pay for both medical treatment and wage loss” (inferring that both medical treatment as well as temporary total disability benefits were already being paid). Ultimately, the carrier paid out $23,963.02 in temporary total disability benefits and $94,841.52 in medical benefits before filing an amended answer denying that the petitioner’s injury had occurred in the course of employment.

It is unknown from a reading of this case if, at any time, the petitioner had argued that the carrier should not have been able to assert a defense to compensability based on payment of temporary total disability benefits. Nevertheless, the court stated that “Section 15 expressly provides that any payments the employer makes are without prejudice to a defense of noncompensability” and later explained that this “encourages the employer to make prompt voluntary payments, thereby affording the employee needed funds for medical treatment and the replacement of lost wages. The Act encourages the same result through the express assurance of Section 15 that the voluntary payment of benefits will not constitute an admission of liability.” The court appears to have expanded the protection of Section 15. It now appears that the payment of temporary total disability benefits will not be considered an admission of liability.

What impact does this case have on respondents and the advice given by their attorneys? My suspicion is that there will be no immediate change in the advice by respondent attorneys, and I anticipate that they will still recommend against payment of temporary total disability benefits while the claim is under investigation. Attorneys should also recommend that when there is an issue regarding compensability, prior to issuing temporary total disability benefits, the carrier should send a letter advising that these payment are “without prejudice” and/or are being made while the claim is under investigation. There is no doubt that petitioners will continue to argue that payment of temporary total disability constitutes an admission of liability and that, had the legislature intended otherwise, it would have crafted a section equivalent to Section 15 that specifically states that payment of temporary total disability benefits shall not be considered an admission of liability. However, should you find yourself with a claim where you have paid temporary total disability benefits, do not assume that you just bought yourself a claim.

*Kristy, a shareholder in our Cherry Hill, New Jersey office, can be reached at 856.414.6405 or kosalvitti@mdwcg.com.

Defense Digest, Vol. 20, No. 2, June 2014

Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2014 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.