DANIEL PANCKERI v. ALLENTOWN POLICE DEPARTMENT (DIVISION OF WORKERS' COMPENSATION) (RESUBMITTED)

NOT FOR PUBLICATION WITHOUT THE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-2015-19
DANIEL PANCKERI,
Petitioner-Appellant,
v.
ALLENTOWN POLICE
DEPARTMENT,
Respondent-Respondent.
_________________________
Argued February 10, 2021 – Decided March 2, 2021
Remanded by Supreme Court July 6, 2022
Resubmitted July 27, 2022 – Decided August 19, 2022
Before Judges Whipple, Rose and Firko.
On appeal from the Department of Labor and
Workforce Development, Division of Workers'
Compensation, Claim Petition No. 2012-10378.
Patrick L. Cimino argued the cause for appellant (The
Tashjy Law Firm, LLC, attorneys; Patrick L. Cimino,
of counsel and on the briefs).
Kenneth W. Chamlin argued the cause for respondent
(Chamlin, Uliano & Walsh, attorneys; Kenneth W.
Chamlin, of counsel and on the briefs; Andrew T.
Walsh, on the briefs).
PER CURIAM
This matter returns to us after the Supreme Court granted Daniel
Panckeri's petition for certification, and summarily remanded the matter for
reconsideration in view of its decision in Richter v. Oakland Board of Education,
246 N.J. 507 (2021). Panckeri v. Allentown Police Dep't, 251 N.J. 356 (2022).
The facts and procedural history are set forth in detail in our prior opinion.
Panckeri v. Allentown Police Dep't, No. A-2015-19 (App. Div. Mar. 2, 2021)
(slip op. at 1-3). In summary, Panckeri was injured while assisting at the scene
of a motor vehicle accident during the course of his employment with the
Allentown Police Department. Id. at 2. He filed both a claim for workers'
compensation benefits, and a tort action against the driver and owner of the
vehicle that injured him. Id. at 2-3.
Panckeri settled his workers' compensation claim at thirty-three and one-
third percent permanent disability, which was later increased to forty percent as
his condition worsened. Id. at 2. In addition to his receipt of $16,547.13 in
temporary disability benefits and $16,287.05 in medical benefits, Panckeri's
gross compensation award for his permanency benefits was $20,883.10. Id. at
4. This amount included $2,368 in attorney's fees and costs allowed by the
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workers' compensation court, which approved the settlements. Id. at 2-3.
Panckeri also settled his tort action for $99,000, which was reduced by $5,000
for his ex-wife's per quod claim, and further reduced by $30,696 in counsel fees
and $1,919.82 in expenses for the tort litigation. Id. at 3.
Allentown asserted a lien against Panckeri's tort settlement under N.J.S.A.
34:15-40 (Section 40), which provides, in relevant part:
Where a third person is liable to the employee or
his dependents for an injury or death, the existence of a
right of compensation from the employer or insurance
carrier under this statute shall not operate as a bar to the
action of the employee or his dependents, nor be
regarded as establishing a measure of damage therein.
....
(b) If the sum recovered by the employee or his
dependents from the third person or his insurance
carrier is equivalent to or greater than the liability of
the employer or his insurance carrier under this statute,
the employer or his insurance carrier shall be released
from such liability and shall be entitled to be
reimbursed, as hereinafter provided, for the medical
expenses incurred and compensation payments
theretofore paid to the injured employee or his
dependents less employee's expenses of suit and
attorney's fee as hereinafter defined.
Panckeri challenged the lien against the full $20,883.10 in permanency benefits,
arguing the lien should not include the $2,368 in attorney's fees and costs for
litigation of his workers' compensation claims, as those fees and costs were not
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part of the "compensation payments" paid to him under Section 40. Panckeri,
slip op. at 4-5.
The judge of compensation disagreed. Id. at 5-8. The judge relied on the
"Division's longstanding practice, dating back to the 'introduction of the
reimbursement requirement'" of Section 40, which based the employer's right to
reimbursement "on the entirety of the recover[y], without regard to the fees and
costs encountered in the [w]orkers' [c]ompensation award." Id. at 7-8. The
judge further noted that, although the Legislature had most recently amended
Section 40 in 2007, and "specifically 'examined exemptible fees and costs,'" the
Legislature had not chosen to alter the language in Section 40 to change this
longstanding practice. Id. at 8. We agreed and affirmed. Id. at 9-11.
Thereafter, in Richter, the Supreme Court addressed whether the
claimant's recovery from her employer under the New Jersey Law Against
Discrimination (LAD), N.J.S.A. 10:5-1 to -49, was barred by the exclusivity
provision of the Worker's Compensation Act (WCA), N.J.S.A. 34:15-8, which
precludes a person "in the same employ as" the workers' compensation claimant
from being held liable "at common law or otherwise . . . except for intentiona l
wrong." 246 N.J. at 514-15. Richter, a diabetic teacher, was injured at school
when she fainted and hit her head, which she claimed was the result of "her work
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schedule prevent[ing] her from eating her lunch early enough in the day to
maintain proper blood sugar levels." Id. at 514. She sought workers'
compensation benefits, and filed a separate action seeking damages under the
LAD for the school's alleged failure to accommodate her disability. Ibid.
The Court held Richter need not demonstrate an adverse employment
action as an element of a prima facie LAD claim. Id. at 531-32. Further, the
Court affirmed Richter's ability to seek dual relief under both the LAD and the
WCA. Id. at 541-42. The Court relied on the 1990 legislative amendments to
the LAD, which provided that "[a]ll remedies available in common law tort
actions shall be available to prevailing [LAD] plaintiffs." Id. at 537 (citing L.
1990, c. 12, § 2). The Court held the "WCA was in place when the LAD was
enacted, and the Legislature stated its clear intent that the LAD should be treated
as supplemental to other remedies." Id. at 540 (citing N.J.S.A. 10:5-
13(a)(2)(b)). Richter's disability discrimination claim under the LAD was "not
duplicative of the type of claim whose redress is secured through the WCA and
therefore should not be regarded as subordinate to the WCA's exclusive remedy
feature" because the LAD "provides relief under state statutes for a different
workplace wrong." Id. at 542. Thus, the Court affirmed this court's reversal of
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the grant of summary judgment to Richter's employer on her LAD claim. Id. at
520, 545.
Pertinent to the issue presented on remand in the present matter, the final
portion of the Supreme Court's opinion in Richter addressed the potential future
operation of Section 40 to any damage award she might receive if her LAD claim
were successful. Id. at 544-45. The Court noted that, in the ruling on appeal,
the Appellate Division had reviewed the operation of Section 40 "and instructed
on how, if a jury awards damages to Richter in a remand at trial of this matter,
the employer may obtain reimbursement for workers' compensation benefits
paid to her." Id. at 544 (citing Richter v. Oakland Bd. of Ed., 459 N.J. Super.
400, 423-26 (App. Div. 2019)). Earlier in its opinion, the Court characterized
this court's opinion as limiting the Section 40 lien to "only two-thirds the amount
[the employer] paid in workers' compensation to Richter in medical payments
and temporary benefits . . . with the remaining one-third allocated to reimburse
Richter's compensation counsel." Id. at 522 (citing Richter, 459 N.J. Super. at
425-26).
The Court repeated that characterization in the final section of the opinion,
noting that this court's "directions provided that, should the jury's award be
equivalent to or exceed the amount paid to Richter for her medical benefits and
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temporary disability benefits ($28,733.84), a lien for her employer would attach;
however, the jury may not include in that amount fees and costs paid to plaintiff's
compensation attorney." Id. at 522 (citing Richter, 459 N.J. Super. at 425-26).
The Court specifically noted that, as there was no evidence in the record of the
amount paid to Richter for partial total permanent disability benefits, it did not
address those benefits. Id. at 522 n.2.
Finally, the Court "agree[d] with the Appellate Division's direction on this
matter" and held that the intent of "Section 40 is to bar Richter's receipt of
duplicate damages." Id. at 545 (citing Richter, 459 N.J. Super. at 424).
However, as the Court found, "[t]hat does not mean that her employer is entitled
to be reimbursed for fees plaintiff had to pay to counsel out of her compensation
award." Ibid. (emphasis added) (citing Richter, 459 N.J. Super. at 425-26). It
is this language that is now at issue here.
In supplemental briefing submitted following the remand order, Panckeri
urges us to follow the language in Richter and exclude the $2,368 in workers'
compensation attorney's fees and costs from the Section 40 lien. Allentown
counters Richter does not apply, noting the present case involves a compensation
award for permanent disability benefits, which was not the case in Richter.
Allentown further cautions that application of Richter to the present matter case
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would result in inconsistencies in Section 40 cases, as "the amount of the lien
recovery could fluctuate depending on the timing of the settlement of the
permanent disability award vis-à-vis the settlement of the third-party case."
Notwithstanding Allentown's attempts to distinguish Richter from the
present matter, it is clear from the express language in Richter that the Court
interpreted Section 40 as precluding employers from being "reimbursed for fees"
that a workers' compensation claimant "had to pay to counsel out of her
compensation award." Richter, 246 N.J. at 545. Notably, however, "not every
word and every phrase contained in a Supreme Court opinion constitutes binding
precedent." In re A.D., 441 N.J. Super. 403, 422 (App. Div. 2015). Although
"matters in the opinion of a higher court which are not decisive of the primary
issue presented but which are germane to that issue" are binding on lower courts,
dicta "not necessary to the decision then being made[,]" is "entitled to due
consideration but does not invoke the principle of stare decisis." Marconi v.
United Airlines, 460 N.J. Super. 330, 339 (App. Div. 2019) (first quoting State
v. Rose, 206 N.J. 141, 183 (2011); and then Bandler v. Melillo, 443 N.J. Super.
203, 210 (App. Div. 2015)).
Indeed, "[m]uch depends upon the character of the dictum. Mere obiter
may be entitled to little weight, while a carefully considered statement . . .
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though technically dictum, must carry great weight . . . ." Id. at 339 (alteration
in original) (quoting A.D., 441 N.J. Super. at 422-23). Stated another way, if
the Supreme Court's dictum is "deemed carefully considered, necessary to the
decision reached, or directly involved with the central issue in the case, we are
bound by it." Loigman v. Twp. Comm. of Twp. of Middletown, 409 N.J. Super.
13, 22 (App. Div. 2009) (first citing State v. Breitweiser, 373 N.J. Super. 271,
282-83 (App. Div. 2004); and then Barreiro v. Morais, 318 N.J. Super. 461, 468-
69 (App. Div. 1999)).
The Section 40 language in Richter, which relates only to treatment of a
potential future LAD damage award, was not directly related or germane to the
limited question on which the Court granted certification: "whether an employee
alleging discrimination for failure to accommodate a disability, pursuant to the
[LAD], is required to show an adverse employment action; and whether
plaintiff's claim is barred by the exclusive remedy provision of the [WCA]."
Richter, 246 N.J. at 522 (alterations in original).
In Richter, this court reviewed the purpose of Section 40, which was to
prevent a double recovery to an injured employee. 459 N.J. Super. at 422-25.
The court discussed both Millison v. E.I. du Pont de Nemouts & Co., 101 N.J.
161, 187 (1985), and Calalpa v. Dae Ryung Co., 357 N.J. Super. 220, 227-29
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(App. Div. 2003), which involved the employees' claims for workers'
compensation benefits and an intentional tort claim against their employers.
Ibid. This court in Richter held those cases stand for the proposition that, under
Section 40, a "workers' compensation carrier [is] entitled to a 100% credit,
meaning a 'dollar for dollar lien'" because "'an employee cannot have both'"
recovery under the WCA and "'civil damages for the same injuries'" and because
Section 40's "'third person'" concept applies to employers who commit an
intentional tort and are therefore "'actionable tortfeasor[s].'" 459 N.J. Super. at
424-25 (quoting Calalpa, 357 N.J. Super. at 228-29). Quoting Section 40, we
held "if the award recovered by Richter is 'equivalent to or greater than the
liability of the employer from an award,' in this case $28,733.84 for medical
bills and temporary disability benefits, the Board is allowed to keep two-thirds
with Richter's counsel being entitled to the remaining one-third for counsel fees
and costs not to exceed $750." Id. at 426 (quoting N.J.S.A. 34:15-40(b) and
(e)).
Reviewing our decision in Richter through the lens of Section 40 suggests
the two-thirds/one-third split refers only to Richter's potential LAD damages
award, not her workers' compensation award. Id. at 426. Section 40 allows an
employer who has paid workers' compensation benefits to be "reimbursed . . .
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for the medical expenses incurred and compensation payments theretofore paid
to the injured employee or his dependents less employee's expenses of suit and
attorney's fee as hereinafter defined" if "the sum recovered by the employee" in
a third-party action "is equivalent to or greater than the liability of the employer"
under the WCA. N.J.S.A. 34:15-40(b). Subsection (e) of Section 40 defines
both the "expenses of suit" and "attorney's fee" referred to in subsection (b) as
only those costs which arise out of the employee's third-party action, not the
worker's compensation claim, stating:
As used in this section, "expenses of suit" shall mean
such expenses, but not in excess of $750 and "attorney's
fee" shall mean such fee, but not in excess of [thirty-
three and one-third percent] of that part of the sum paid
in release or in judgment to the injured employee or his
dependents by such third person or his insurance carrier
to which the employer or his insurance carrier shall be
entitled in reimbursement under the provisions of this
section, but on all sums in excess thereof, this
percentage shall not be binding.
[N.J.S.A. 34:15-40(e).]
The limitation on the definition of "expenses of suit" and "attorney's fee"
in Section 40 is clear not only from the plain language of the statute, but also
the legislative history. Indeed, in statements issued in conjunction with the
Legislature's 2007 increase of subsection (e)'s expense amount to $750, see L.
2007, c. 23, § 1, both the Senate and Assembly Labor Committees noted that the
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"suit" for which such expenses were incurred was that filed by the employee
"against the third party." Assembly Lab. Comm. Statement to A. 2336 (Mar. 9,
2006); Senate Lab. Comm. Statement to A. 2336 (Nov. 13, 2006). By contrast,
as we noted in our initial opinion, Section 40 is silent on the treatment of
attorney's fees or costs incurred in conjunction with a worker's compensation
claim. Panckeri, slip op. at 7, 11.
Thus, Section 40 contemplates the lien and net amount to be paid to a
plaintiff in the context of a third-party tort action where the third-party counsel
is paid on a contingent fee basis pursuant to the recovery by settlement or
judicial decree. By contrast, the LAD provides for fee shifting if the plaintiff
prevails, see N.J.S.A. 10:5-27.1, as determined by the trial court, see Rendine v.
Pantzer, 141 N.J. 292, 316-17 (1995). Accordingly, to effectuate the intent of
the Legislature as it pertains to preventing a double recovery, a prevailing
plaintiff in an LAD action – who is awarded counsel fees and obtains a workers'
compensation award – must be considered on a case-by-case basis.
In the absence of binding precedent holding attorney's fees and costs
arising out of the workers' compensation claim should be excluded from a
Section 40 lien, we therefore decline to disturb our decision.
Affirmed.
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