DEBRA SANSONE VS. VILLAGE SUPERMARKET, INC. (DIVISION OF WORKERS' COMPENSATION) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3638-17T1
DEBRA SANSONE,
Petitioner-Appellant,
v.
VILLAGE SUPERMARKET, INC.,
Respondent-Respondent.
___________________________________
Argued January 31, 2019 – Decided May 2, 2019
Before Judges Simonelli and DeAlmeida.
On appeal from the New Jersey Department of Labor
and Workforce Development, Division of Workers'
Compensation, Claim Petition No. 2009-33752.
Andrew P. Gould argued the cause for appellant
(Pfeiffer & Bruno, PC, attorneys; James L. Pfeiffer, on
the brief).
Thomas E. Miller argued the cause for respondent (Law
Offices of Styliades and Jackson, attorneys; Thomas E.
Miller, on the brief).
PER CURIAM
Petitioner Debra Sansone appeals from the March 15, 2018 order of the
Division of Workers' Compensation (Division) enforcing a statutory lien in
favor of Liberty Mutual Insurance Company (Liberty Mutual) against the
proceeds of her settlement with third-party tortfeasors. We affirm.
I.
Sansone was employed by respondent Village Supermarket, Inc. (Village)
and assigned to work at a supermarket. On April 1, 2006, while at work,
Sansone slipped and fell on an object on the floor. She filed a workers'
compensation claim alleging the accident injured her right foot. When the
accident took place, Village was insured by New Jersey Manufacturer's
Insurance Group (NJM). Sansone received treatment and was diagnosed with
Reflex Sympathetic Dystrophy/Complex Regional Pain Syndrome (RSD/CRPS)
in her right lower extremity as a result of the accident. She returned to work,
but continued to receive medical treatment.
On December 23, 2007, Sansone was injured for a second time at work.
On that day, an employee of Same Day Delivery Service, Inc. (Same Day) who
was delivering items to the supermarket accidentally pushed a metal cart into
Sansone's right foot and ankle, the same area injured in the first accident.
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Sansone filed a workers' compensation claim for the second accident, alleging
injuries to her right ankle and leg, torso, back, and left knee. When this accident
took place, Village was insured by Liberty Mutual. Sansone was diagnosed with
RSD/CRPS in the right foot and other areas of her body from the second accident
and received ongoing medical treatment.
On December 17, 2009, Sansone and her spouse filed a complaint in the
United States District Court against Same Day and the employee involved in the
second accident. Sansone alleged the employee's negligent acts caused injuries
to her ankle, foot, and leg. She sought recovery for, among other things, past
and continuing expenses for treatment of her injuries and lost time from work.
Sansone's spouse alleged per quod claims, seeking damages for loss of
consortium and related damages.
On April 6, 2016, while the federal action was pending, Sansone settled
both of her workers' compensation claims. She resolved the claim from the first
accident for $21,000, for which NJM was responsible. In addition, a workers'
compensation judge entered an order for total permanent disability as a result of
the second accident. The order assigned fifty-five percent responsibility for the
permanent disability to the employer, for which Liberty Mutual is financially
responsible, and forty-five percent responsibility for the permanent disability to
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the Second Injury Fund (Fund). Liberty Mutual was found responsible for all
future medical expenses arising from Sansone's RSD/CRPS.
In May 2017, Sansone and her spouse settled the federal court action for
$1 million, the limit of the third-parties' insurance policy. Although Sansone
and her spouse were aware of Liberty Mutual's statutory lien, pursuant to
N.J.S.A. 34:15-40 (section 40), against Sansone's recovery from third-party
tortfeasors responsible for the second accident, they did not apportion the
settlement proceeds between Sansone's claims and those of her spouse. The
record does not contain a written settlement agreement relating to the federal
court matter.
In August 2017, Liberty Mutual filed a motion with the Division to
enforce its statutory lien against Sansone's third-party recovery. At the time,
Liberty Mutual had a lien of $1,139,571.17, including expenses for Sansone's
continuing medical treatment, and alleged that the entire amount recovered by
Sansone was subject to the lien.1
Sansone opposed the application. She argued Liberty Mutual is not
entitled to a lien for all of the expenses associated with her ongoing treatment
1
At the time of Liberty Mutual's motion, Sansone's counsel, after deducting
attorney's fees, had placed the $675,198.36 balance of the settlement proceeds
in a trust account to await resolution of Liberty Mutual's motion.
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because most of the treatment she received for RSD/CRPS is consistent with the
natural progression of the condition as a result of her first accident, for which
Liberty Mutual is not responsible, and would have occurred regardless of the
second accident. Sansone's argument is directly contrary to the argument she
made in her second compensation claim, in which she alleged serious medical
injuries from the second accident. In addition, Sansone argued Liberty Mutual
is not entitled to a lien against the portion of the third-party settlement proceeds
attributable to her spouse's recovery on his per quod claims. She asked the judge
of compensation to hold a hearing to determine the extent of Liberty Mutual's
lien or order the parties into arbitration to resolve that issue.
On March 15, 2018, the judge of compensation issued an oral opinion
denying Sansone's request for a hearing and enforcing Liberty Mutual's lien
against the entire balance of Sansone's recovery in the federal court action. The
judge concluded that the order resolving Sansone's second compensation claim
finds she is totally permanently disabled as a result of the second accident and
Liberty Mutual is responsible for all of her future medical expenses associated
with her RSD/CRPS. The court also noted that the expert report on which
Sansone relied in opposition to Liberty Mutual's motion, and which attributed
the RSD/CRPS largely to the first accident, was presented by the third-party
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defendants in the federal court action. The report contradicts the position taken
by Sansone in that action, in which she sought to attribute her damages to the
negligence of the third-party defendants. The judge found that after Sansone
settled the third-party claims for $1 million, "it's difficult for me to accept that
you can take the flip argument now when it comes time to pay the lien[.]" In
addition, the judge noted that "Liberty Mutual went on to pay hundreds of
thousands of dollars in medical treatment on a continuing basis for all the things
that [Sansone] alleged . . . were related to her [second] accident." The judge
found the ongoing medical treatment provided by Liberty Mutual "was, in fact ,
related to" the second accident and, therefore, should be subject to a lien in favor
of Liberty Mutual.
In addition, the judge concluded that while the spouse's per quod recovery
is not subject to Liberty Mutual's lien, the parties did not attribute any of the
settlement proceeds in the third-party action to his claims. Finding that "there
is nothing before me to even justify or consider what an appropriate allocation
would be," the judge of compensation concluded he was unable to "assess
anything to a per quod claim, consortium claim." The judge also found that a
hearing was not necessary to determine the amount of Liberty Mutual's lien
because "the lien far exceeds funds available to reimburse it" from the
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settlement. A March 15, 2018 order memorializes the judge of compensation's
decision.
This appeal followed. On April 27, 2018, the judge of compensation
issued a written amplification of his decision. R. 2:5-1(b). In that decision, the
judge noted that the same counsel represented Sansone in both the federal court
action and the workers' compensation proceedings and, despite having "full
knowledge of the pending workers' compensation" claims, "made no effort to
allocate the settlement proceeds" from the third-parties. The judge also found:
In opposing the motion to enforce the section 40 lien,
[Sansone] provides no facts or evidence to support an
allocation of the third[-]party settlement other than to
say [Sansone's] husband had a per quod claim. The
details of the settlement, a release, any relevant
discovery in the third[-]party suit, or any indication of
the husband's potential damages, were not before me.
Any attempt to allocat[e] those settlement proceeds
should have been conducted in the [District] Court with
the involvement of the parties in that case . . . [and]
notice could have been given to the workers'
compensation carrier.
It was not for this court to re-litigate or arbitrate the
personal injury matter when the lien was clearly
involved. If the husband['s] rights needed to be
protected, it should have been addressed at the time of
settlement. I have no jurisdiction over the [District]
Court case.
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Before us, Sansone argues that the judge of compensation's finding
Liberty Mutual is responsible for all medical treatment she received for
RSD/CRPS is erroneous. In addition, she argues the judge of compensation
erred as a matter of law by failing to hold a hearing to allocate a portion of the
third-party settlement proceeds to the spouse's per quod claim. According to
Sansone, it is undisputed that Liberty Mutual does not have a statutory lien
against the spouse's recovery and by failing to make an allocation, the judge of
compensation effectively reduced the spouse's recovery to zero.
II.
"A judge of compensation's factual findings are entitled to substantial
deference." Bellino v. Verizon Wireless, 435 N.J. Super. 85, 94 (App. Div.
2014). Our "review is limited to 'whether the findings made could reasonably
have been reached on sufficient credible evidence present in the record,
considering the proofs as a whole[.]'" Lindquist v. City of Jersey City Fire Dep't,
175 N.J. 244, 262 (2003) (quoting Close v. Kordulak Bros., 44 N.J. 589, 599
(1965)). However, this court owes "no particular deference to the judge of
compensation's interpretation of the law." Sexton v. Cty. of Cumberland, 404
N.J. Super. 542, 548 (App. Div. 2009).
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Section 40 creates a statutory compensation lien that "attaches to 'any sum'
recovered by the injured worker from a third-party, without regard to such
equitable considerations as whether the worker has been fully compensated."
Lambert v. Travelers Indem. Co. of Am., 447 N.J. Super. 61, 73 (App. Div.
2016) (quoting Primus v. Alfred Sanzari Enters., 372 N.J. Super. 392, 400 (App.
Div. 2004)). The purpose of the statute is to make clear that "[a]n injured
employee is entitled to be compensated for injuries sustained but is not entitled
to be compensated twice for those injuries." Weir v. Mkt. Transition Facility of
N.J., 318 N.J. Super. 436, 444 (App. Div. 1999). "The 'double recovery' that the
Legislature intended to prevent under section 40 is payment from two different
sources for the same injury, and not payment in excess of the worker's 'actual
damages.'" Frazier v. N.J. Mfrs. Ins. Co., 142 N.J. 590, 603 (1995). "Our public
policy against a double recovery is so strong that a section 40 lien is valid even
if the recovery in the third-party action is insufficient to compensate the injured
employee fully for all injuries received." Weir, 318 N.J. Super. at 444.
We begin our analysis with Sansone's argument that Liberty Mutual is not
entitled to a lien for all of the funds it expended for her medical treatment. After
a careful review of the record, we conclude that the judge of compensation's
interpretation of the April 6, 2016 order resolving Sansone's second
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compensation claim is supported by sufficient credible evidence. The order
finds Liberty Mutual fifty-five percent responsible for Sansone's total permanent
disability "due to the combined effects of the petitioner's previous disabilities
and the last compensable accident" and establishes weekly payments to be made
from Liberty Mutual to Sansone. The order also directs Liberty Mutual to
furnish Sansone with ongoing medical treatment by two designated treating
physicians. There is no suggestion in the order that NJM is responsible for any
of Sansone's continuing medical expenses, or that her continuing treatment is
attributable to the first accident.2
In addition, the April 6, 2016 order memorializing the settlement of
Sansone's first compensation claim, for which NJM is responsible, states that
the matter is settled for $21,000, which NJM is to pay to Liberty Mutual. The
order does not provide that NJM will pay any portion of Sansone's ongoing
medical expenses.
We note, as did the judge of compensation, that the parties proceeded with
the understanding that Liberty Mutual was responsible for Sansone's ongoing
medical treatment. Sansone accepted hundreds of thousands of dollars in
2
Because the Fund was found to be forty-five percent responsible for Sansone's
disability, the order directs the Fund to make additional weekly payments to her.
The Fund is not responsible for ongoing medical treatment.
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medical treatment from Liberty Mutual while alleging in her second
compensation claim and her third-party suit that her medical treatment was
necessitated by the injuries she incurred in the second accident. There is no
evidence in the record that at any point prior to Sansone's decision to accept a
$1 million settlement from the third-parties' insurer she took the position that
her ongoing treatment was largely attributable to her first accident.
We also affirm the judge of compensation's order denying Sansone's
request for a hearing to determine the portion of the settlement proceeds
attributable to her husband's per quod claims. We are guided in our analysis by
our holding in Weir, where we examined facts substantively similar to those
presently before the court. In that case, an employee was injured while at work
by the negligent acts of a third-party. Id. at 439. He received workers'
compensation benefits and sued the third-party for damages. Id. at 440. The
employee's spouse asserted a per quod claim in the third-party action. Ibid. The
employee and his spouse settled their claims "for a lump sum amount that made
no distinction between" the claims of the employee and those of his spouse.
Ibid. Shortly thereafter, the employee filed suit in the Superior Court seeking a
declaratory judgment that the workers' compensation insurance company did not
have a section 40 lien on the spouse's recovery on her per quod claim and
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allocating the settlement amount between himself and his spouse. Ibid. The
trial court held a hearing, determined the "economic value" of the employee's
and spouse's claims, concluded that the spouse's claim was worth twenty percent
of the employee's claim, and applied that percentage to the settlement proceeds
to determine the amount attributable to the per quod claim. Id. at 441-42.
We concluded that the employee was entitled to a declaratory judgment
with respect to whether the insurance carrier's lien extended to his spouse's
recovery on her per quod claim. Id. at 442. We held "that an employer or its
insurance carrier, who has provided workers' compensation benefits to an
injured employee, may not assert a section 40 lien against a spouse's per quod
recovery obtained in a third-party action." Id. at 445. We based our conclusion,
in part, on our observation that "it is significant that the spouse of an injured
employee cannot assert a per quod claim within a workers' compensation
proceeding." Ibid.
However, we reversed the trial court's issuance of a declaratory judgment
allocating the settlement proceeds between the employee's claims and those of
his spouse. Id. at 442. We determined that declaratory relief was not appropriate
for a number of reasons. First, we noted that the employee and his spouse
"settled with full knowledge of the existence of [the insurance carrier's] lien and
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their obligation to satisfy it[,]" yet "settled their claims against the third-party .
. . without simultaneously settling the section 40 lien[.]" Id. at 446. Second, we
acknowledged "the anomalous nature of the positions asserted" by the employee
and his spouse at the declaratory judgment hearing, given that the spouse's
attorney, who "would be expected to prove the nature of his client's injuries to
their greatest extent, instead argued the strength of [the spouse's] per quod
claim." Ibid. Third, we noted that the compensation insurance carrier "was
hardly in a position to establish the nature of the pain and suffering [the
employee] experienced as a result of the accident" and his subsequent treatment.
Id. at 447. Finally, we observed that "it is difficult to escape the conclusion that
the [declaratory judgment] complaint was little more than a thinly-veiled
attempt to circumvent" the section 40 lien of the insurance carrier who paid for
the employee's medical treatments. Id. at 448.
Although we held that a declaratory judgment action was not available to
the employee to allocate the proceeds of the settlement of a third-party action,
we did not decide how such an allocation should be effectuated. We held
because we have concluded that the [employee and his
spouse] were not entitled to a declaratory judgment
allocating the settlement proceeds between them, we
decline to address the procedures to be employed in
conducting a hearing in those rare instances in which a
judicial allocation would be appropriate. We are
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confident that the vast majority of such matters will
continue to be handled in the same manner as they are
now – by a mutually agreeable resolution.
[Ibid.]
Here, the request for allocation was presented not through a declaratory
judgment complaint, but in opposition to an insurance carrier's motion to enforce
a section 40 lien. Despite the difference in procedure, the concerns that
underpinned our holding in Weir are present here. Sansone and her spouse,
aware of their obligation to satisfy Liberty Mutual's lien and represented by the
same counsel in their third-party action as appeared on behalf of Sansone before
the Division, settled their third-party claims without allocating the settlement
proceeds. Although aware of Liberty Mutual's interest in the third-party action,
the Sansones did not involve the carrier in their settlement discussions or attempt
to settle their section 40 lien along with their third-party claims.
In addition, Sansone and her spouse were in an anomalous position before
the judge of compensation. Although Sansone filed a compensation claim and
a third-party action alleging that her medical condition, and the need for ongoing
treatment, was caused by the second accident, once she and her spouse secured
a $1 million settlement from the third-parties, they attempted to attribute the
bulk of Sansone's ongoing medical expenses to her first accident. This unusual
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situation is highlighted by the fact that in support of her argument in opposition
to the motion to enforce the lien, Sansone relied on the report of the expert
retained by the defendants in the third-party action. In addition, as was the case
in Weir, the Sansones' failure to include Liberty Mutual in the settlement
discussions in the third-party action is indicative of a conscious effort to
attribute as much damage to the second accident as possible in the federal action,
while preserving the opportunity to take the exact opposite position before the
judge of compensation once the federal action was settled.
We also note that the judge of compensation was not well equipped, or
statutorily authorized, to quantify the value of the spouse's per quod claims. As
indicated above, it has long been established that such claims cannot be asserted
as part of a compensation claim. Danek v. Hommer, 9 N.J. 56, 59-61 (1952).
Judges of compensation, therefore, do not have expertise in the area of
derivative tort claims. Moreover, it is not entirely clear what Sansone requested
the judge of compensation to determine. Rather than deciding what the spouse's
per quod claim was worth, it appears that the more appropriate inquiry would
have been the amount for which the spouse's per quod claim was settled. After
all, it is reasonable to assume that settlement of all of the Sansones' claims for
the limit of the third-parties' insurance coverage is an acknowledgement the
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Sansones made a colorable argument that their combined claims exceeded that
amount. It is entirely possible that the third-party defendants were convinced
that Sansone's claims alone, without consideration of her spouse's per quod
claims, exceeded the policy limit. In that instance, the settlement proceeds
might reasonably be viewed as attributable entirely to Sansone's claims. The
process for determining the value attributed to the Sansones' third-party claims
in the settlement would surely be fraught with complexities and involve legal
issues and evidence beyond those appropriately before a judge of compensation.
Sansone and her spouse were not without options for protecting the per
quod recovery. They could have executed separate settlement agreements with
the third-parties or allocated the settlement proceeds among the claims in a
single settlement agreement. More importantly, and perhaps most practically,
the Sansones could have involved Liberty Mutual in the settlement discussions
with the third-parties and addressed the carrier's section 40 lien at that time.
Affirmed.
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