Workers’ compensation insurance carrier’s lien pursuant to N.J.S.A. 34:15-40 attaches even if the injured worker’s third-party recovery was for pain and suffering only.

The plaintiff’s employer’s workers’ compensation carrier notified her that it was asserting a lien under Section 40 of the Act, N.J.S.A. 34:15-40, in the amount of $46,856.22 for medical expenses it paid on her workers’ compensation claim. The plaintiff refused to pay the lien, arguing that: (1) since personal injury protection (PIP) medical payments are not recoverable from the tortfeasor, a workers’ compensation carrier should not be able to recover medical expenses it paid arising from an employee’s work-related automobile accident; and (2) the defendant’s lien did not attach because her third-party recovery was for pain and suffering only. The plaintiff filed a motion for summary judgment, and the defendant filed a cross-motion for the same relief. The court denied the plaintiff’s motion and granted the defendant’s cross-motion. This appeal ensued. In affirming the lower court’s ruling, the Appellate Division concluded that there is nothing in Section 40 of the Act that prevents a lien from applying where the settlement represents payment for pain and suffering. Read together, Section 40 and New Jersey’s collateral source statute, N.J.S.A. 2A:15-97 (governing the deduction of duplicate benefits awarded plaintiffs in civil actions), plainly require that a third-party tortfeasor be held to the full extent of its liability for a workplace injury, that the employer or compensation carrier be repaid for the benefits it paid to the injured worker pursuant to the Act without regard to the compensability of the claim, and that the employee not obtain a double recovery. The Appellate Division also opined that the fact that PIP benefits are not recoverable against a tortfeasor has no bearing on an employer’s Section 40 lien rights.

_{Case Law Alerts, 4^th Quarter, October 2016. Case Law Alerts is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent 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 © 2016 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.}