MARIE T. PINO VS. JOSE R. POLANCOÂ (L-1744-13, CAMDEN COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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-5027-15T4
MARIE T. PINO,
Plaintiff,
v.
JOSE R. POLANCO,
Defendant,
and
NEW JERSEY MANUFACTURERS
INSURANCE COMPANY,
Defendant-Respondent.
_____________________________
Argued November 6, 2017 – Decided November 22, 2017
Before Judges Sabatino and Ostrer.
On appeal from Superior Court of New Jersey,
Law Division, Camden County, Docket No. L-
1744-13.
David R. Kunz argued the cause for appellant
The Hartford (Kunz & Germick, attorneys; Mr.
Kunz and Leslie S. Britt, on the brief).
Robert R. Nicodemo, III argued the cause for
respondent (Law Offices of Nicodemo & Connell,
PC, attorneys; Mr. Nicodemo, on the brief).
PER CURIAM
This appeal concerns a dispute between a workers'
compensation insurer and lienholder, The Hartford, and an
automobile insurer, New Jersey Manufacturers Insurance Company
("NJM"). The Hartford appeals the trial court's denial of its
attempt to reopen a previously-dismissed lawsuit in order to
recover its lien against NJM, the issuer of an uninsured motorist
("UM") policy to the injured employee. We affirm.
On May 10, 2011, NJM's insured, Marie Pino, was injured in
an automobile accident. At the time of the accident, Pino was
acting in the scope of her employment. The vehicle that Pino
occupied was struck by an uninsured motorist, Jose R. Polanco.
Pino had UM coverage with NJM.
Pino obtained medical services after the auto accident,
including treatment by a chiropractor. The medical expenses were
paid by The Hartford, in its capacity as her employer's workers'
compensation carrier. Pino also received non-medical "indemnity"
benefits from The Hartford. Consequently, The Hartford held a
workers' compensation lien of $48,056.79 with respect to its
payments to Pino, consisting of $21,813.79 in medical expenses and
$26,243.00 in indemnity benefits.
On December 5, 2011, The Hartford's subrogation
representative sent a letter to Pino's attorney advising him of
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the then-current status of The Hartford's lien.1 The letter
reflected The Hartford's understanding that Pino would be pursuing
a liability claim against "the responsible party." The
representative requested that if Pino was not pursuing such a
third-party claim, "please let me know at your earliest
convenience."
In April 2013, Pino filed a personal injury action in the Law
Division against Polanco, the owner and driver of the vehicle who
struck her. In October 2013, Pino amended her complaint to name
NJM, her UM insurer, as a direct defendant, having unsuccessfully
attempted to obtain recovery or settlement from NJM.2
On June 4, 2014, Pino and NJM entered into and filed in the
Law Division a "Stipulation of Dismissal Without Prejudice Subject
to Reinstatement," apparently in anticipation that they would
arbitrate their dispute. Consequently, the court dismissed the
Law Division action. Pino and UM then participated in a non-
binding UM arbitration on July 29, 2015. The panel of arbitrators,
1
With the consent of his adversary and this court's approval,
counsel for The Hartford supplemented the appellate record to
include the December 5, 2011 letter. We recognize this letter was
not furnished to the trial court.
2
Although the record is rather uninformative about this, Pino
apparently did not obtain any recovery from Polanco or pursue the
litigation against him after amending her complaint to assert her
UM claims against NJM.
3 A-5027-15T4
by a 2-1 vote, determined that Pino had sustained objective
injuries that satisfied the lawsuit limitation threshold under
N.J.S.A. 39:6A-8, and awarded her $65,000. The award was expressly
subject to the $21,813.79 lien for medical expenses.3
NJM rejected the arbitration award and demanded a jury trial.
Nevertheless, Pino chose not to move to reinstate the Law Division
case. Although the record does not document exactly why Pino
dropped the matter, the briefs suggest that Pino and her attorney
concluded that further litigation would not be cost-effective,
given the additional expenses that going to trial would entail and
the risk that a jury might be unpersuaded that her injuries
surmounted the permanency requirements of the lawsuit limitation
threshold in the policy.
According to The Hartford, it did not learn about the ultimate
outcome of the UM matter until January 26, 2016, when Pino's
attorney informed The Hartford's subrogation adjuster that Pino's
UM case against NJM had been dismissed and had not been reinstated.
Having learned this information, The Hartford filed a motion in
3
A copy of the arbitration award was supplied to us on appeal by
counsel, without objection. The trial court did not receive a
copy of the award, but it was summarized in the parties' motion
submissions. At oral argument before us, The Hartford's counsel
represented that it was not seeking in the UM action reimbursement
of the separate indemnity benefits of $26,243 paid to Pino and
that only the lien for the medical benefits is at issue here.
4 A-5027-15T4
the Law Division on April 20 2016, seeking to set aside the
dismissal of the case and attempting to reinstate the complaint
against NJM as lienor.
The trial court denied The Hartford's motion, concluding that
its attempt to revive the Law Division action was untimely under
the ninety-day deadline set forth in N.J.S.A. 34:15-40(f). That
subsection, which is codified within the workers' compensation
statutes, provides in full as follows:
(f) When an injured employee or his
dependents fail within 1 year of the accident
to either effect a settlement with the third
person or his insurance carrier or institute
proceedings for recovery of damages for his
injuries and loss against the third person,
the employer or his insurance carrier, 10 days
after a written demand on the injured employee
or his dependents, can either effect a
settlement with the third person or his
insurance carrier or institute proceedings
against the third person for the recovery of
damages for the injuries and loss sustained
by such injured employee or his dependents and
any settlement made with the third person or
his insurance carrier or proceedings had and
taken by such employer or his insurance
carrier against such third person, and such
right of action shall be only for such right
of action that the injured employee or his
dependents would have had against the third
person, and shall constitute a bar to any
further claim or action by the injured
employee or his dependents against the third
person. If a settlement is effected between
the employer or his insurance carrier and the
third person or his insurance carrier, or a
judgment is recovered by the employer or his
insurance carrier against the third person for
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the injuries and loss sustained by the
employee or his dependents and if the amount
secured or obtained by the employer or his
insurance carrier is in excess of the
employer's obligation to the employee or his
dependents and the expense of suit, such
excess shall be paid to the employee or his
dependents. The legal action contemplated
hereinabove shall be a civil action at law in
the name of the injured employee or by the
employer or insurance carrier in the name of
the employee to the use of the employer or
insurance carrier, or by the proper party for
the benefit of the next of kin of the employee.
Where an injured employee or his dependents
have instituted proceedings for recovery of
damages for his injuries and loss against a
third person and such proceedings are
dismissed for lack of prosecution, the
employer or insurance carrier shall, upon
application made within 90 days thereafter,
be entitled to have such dismissal set aside,
and to continue the prosecution of such
proceedings in the name of the injured
employee or dependents in accordance with the
provisions of this section.
[N.J.S.A. 34:15-40(f) (emphasis added).]
The Hartford appeals, arguing that it is inappropriate to
enforce the ninety-day statutory deadline in subsection (f)
against it because it did not receive notice of the dismissal of
the UM case until January 2016, and that its April 2016 motion to
reinstate that case was filed within ninety days of gaining such
knowledge. In opposition, NJM argues that the trial court
correctly found that N.J.S.A. 34:15-40(f) contains no such
"knowledge" predicate. NJM also contends that The Hartford cannot
6 A-5027-15T4
proceed to recover its lien because of the failure of Pino's
injuries to surmount the lawsuit limitation threshold, N.J.S.A.
39:6A-8.
We analyze the legal issues presented de novo. Hodges v.
Sasil Corp., 189 N.J. 210, 220-21 (2007). Having done so, we
conclude that the denial of The Hartford's motion comports with
the applicable law because The Hartford's attempt to pursue
recovery of its lien against NJM in the UM action was untimely.
As stated in the prefatory language appearing before the
statutory subsections, N.J.S.A. 34:15-40 provides several
mechanisms for workers' compensation carriers and employers to
obtain reimbursement of benefits they had paid to injured workers
in situations where a "third person" may have liability "to the
employee or his dependents for an injury or death" that has
occurred. Id. The closing language following subsection (g) of
the statute broadly defines the term "third person" to "include
corporations, companies, associations, societies, firms,
partnerships and joint stock companies as well as individuals."
Ibid. The statute prescribes in detail what degree of
reimbursement occurs if the employee or his dependents recovers
from a third party a sum equal to or above the compensation
benefits received, N.J.S.A. 34:15-40(b), and, alternatively, a sum
less than those paid benefits, N.J.S.A. 34:15-40(c). The statute
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further prescribes the counsel fees and "expenses of suit" that
are recoverable by the injured worker or his attorney. N.J.S.A.
34:14-40(e).
Subsection (f) of N.J.S.A. 34:15-40, which we have already
quoted in full, details the applicable procedures for situations
when the injured worker or his dependents has not made a recovery
from a potentially-liable "third person or his insurance
carrier[.]"4 For instance, as noted in the first sentence of
subsection (f), if the injured employee or his dependents fails
within one year of the accident to either obtain a settlement with
the third party or insurer, or bring proceedings to recover against
that party, the employer or its workers' compensation insurer can
bring an action against those potentially liable parties in the
employee's stead, upon giving ten days' advance notice. Ibid.Any excess sum above the workers' compensation lien that may
be recovered by the employer or the workers' compensation insurer
must be paid to the employee or his dependents. Ibid. Such an
4
We assume, without deciding, that NJM, a UM carrier that issued
a policy to the injured worker, Pino, constitutes under N.J.S.A.
34:15-40(f) a "third person or his insurance carrier within the
meaning of this section." See Frazier v. N.J. Mfrs. Ins., 142
N.J. 590, 605 (1995) (holding that any proceeds recovered from a
"functionally equivalent source" such as "uninsured motorist
proceeds" are subject to workers' compensation liens). See also
Montedoro v. Asbury Park, 174 N.J. Super. 305, 307-08 (App. Div.
1980).
8 A-5027-15T4
action, which is essentially a subrogation claim, is to be filed
"in the name of the injured employee or by the employer or
[workers' compensation] carrier in the name of the employee to the
use of the employer or [compensation] carrier, or by the proper
party for the benefit of the next of kin of the employee." Ibid.The pivotal timing issues here concern the final sentence of
N.J.S.A. 34:15-40(f), which reads:
Where an injured employee or his dependents
have instituted proceedings for recovery of
damages for his injuries and loss against a
third person and such proceedings are
dismissed for lack of prosecution, the
employer or insurance carrier shall, upon
application made within 90 days thereafter,
be entitled to have such dismissal set aside,
and to continue the prosecution of such
proceedings in the name of the injured
employee or dependents in accordance with the
provisions of this section.
[Ibid. (emphasis added).]
The ninety-day deadline set forth in this provision has not been
the subject of any reported case law, nor have we been supplied
with any informative legislative history concerning its genesis
and intended operation.5
As a literal matter, Pino's lawsuit against NJM was not
"dismissed for lack of prosecution" as that term is commonly used
5
At oral argument, both counsel acknowledged the rarity of this
issue, indicating they had never encountered it before.
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within Rule 1:13-7. Instead, the case was dismissed without
prejudice, pursuant to a stipulation, and was never revived by
Pino. If we apply such a literal reading of subsection (f), the
ninety-day deadline seemingly would not apply to The Hartford to
bring claims against NJM.
However, without the legal authority provided under
subsection (f) to bring a reimbursement action against NJM, The
Hartford would have no statutory basis to bring an action "in the
name of the employee to the use of the employer or insurance
carrier." N.J.S.A. 34:15-40(f). The detailed procedures set
forth in N.J.S.A. 34:15-40 to regulate such reimbursement claims
should not be bypassed. Moreover, there is no indication in the
appellate record that The Hartford has asserted any common law
subrogation claim. Nor does The Hartford present any argument for
why a common law subrogation claim could override the procedural
requirements of N.J.S.A. 34:15-40(f).
In any event, in the present context, The Hartford did not
attempt to bring a separate independent action against NJM in its
own right, but instead attempted to revive Pino's previously-
dismissed case under that same docket number in the Law Division.
Hence, if we treat the ninety-day requirement within subsection
(f) as inapplicable because Pino's lawsuit was dismissed without
prejudice by stipulation and not literally for "lack of
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prosecution," then The Hartford lacks a statutory basis to proceed.
Its motion was properly denied for that legal reason, even if it
was not articulated by the trial court. Isko v. Planning Bd. of
the Twp. of Livingston, 51 N.J. 162, 175 (1968) (noting that trial
court orders may be affirmed for different reasons than those the
trial court recited).
Alternatively, if we construe the dismissal of Pino's lawsuit
as the functional equivalent of a dismissal "for lack of
prosecution" within the meaning of N.J.S.A. 34:15-40(f), The
Hartford's motion in April 2016 to revive the UM case – which had
been dismissed in June 2014 – was manifestly beyond the ninety-
day deadline.
The Hartford argues that the ninety-day period should be
construed so that it is not triggered until a workers' compensation
carrier obtains actual knowledge that a UM case has been dismissed.
We discern no support for such a knowledge requirement within the
words of the statute. The statutory procedures set forth in
subsection (f), including the right of a workers' compensation
carrier to file suit against a third party, on ten days' notice,
if the employee or his dependents have failed to do so within one
year, bespeaks a legislative objective to have such claims for
subrogation or reimbursement brought expeditiously. N.J.S.A.
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34:15-40(f). We agree with the trial court that a knowledge
requirement should not be imputed into the statutory text.
We perceive no inequity in concluding that The Hartford's
claims are untimely under the circumstances. As its own December
5, 2011 correspondence reflects, The Hartford was well aware of
this accident and its right to assert its lien against any third
party recovery over four years before it took action to vindicate
its rights. The December 5, 2011 memo includes a "statute date"
reference point of May 10, 2013, which presumably refers to when
the two-year statute of limitations for Pino's personal injury
suit would expire under N.J.S.A. 2A:14-2. The Hartford was
therefore mindful of timeliness considerations, at least when it
issued the December 2011 letter.
We share the trial court's observation in its oral ruling
that perhaps Pino or her attorney should have advised The Hartford
of the June 2014 dismissal of the UM case sooner, consistent with
the request that The Hartford had made in December 2011 to be kept
advised of the matter's status. However, we are aware of no
authority that imposes a legal duty upon an employee or her
personal injury attorney to supply such prompt notice. We are
reluctant to recognize such a novel proposition in the absence of
the participation of Pino or her former counsel in this appeal.
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Moreover, the record is bereft of any documentation of any
attempts by The Hartford to follow up with Pino or her counsel
about the status of third-party recovery after sending out the
December 5, 2011 letter. It appears that this matter may have
"slipped through the cracks" at The Hartford and we discern no
legal or equitable necessity to allow The Hartford to revive in
2016 a reimbursement claim arising from a 2011 accident and to
revive a UM case that had been dismissed long ago in 2014.6
Affirmed.
6
We decline to reach any other issues in this case, including the
lawsuit limitation threshold issue and whether a workers'
compensation carrier has the right to be reimbursed for medical
benefits from the UM insurer, even though the UM insurer and the
PIP insurer are one and the same, and reimbursement from a PIP
insurer is barred by the "collateral source" doctrine. See
N.J.S.A. 39:6A-6; see also Montedoro, supra, 174 N.J. Super. at
306 (noting that the UM award subject to the workers' compensation
lien was "exclusive of personal injury protection benefits").
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