New Jersey law bars most of Plaintiff's recovery in this PIP subrogation action

Utica Mut. Ins. Co. v Bleeker, 2011 NY Slip Op 51076(U)(App. Term 1st Dept. 2011)

There is perhaps nothing worse than leaving a job and (1) having either written complication motions papers that formed the basis of a successful appeal and became the opinion of the appellate court, or (2) having written an appeal but then having your name deleted from the brief.

The second happened to me in Stepehen Fogel v. Progressive.  The first just happened to me today in Utica v. Bleeker.

To even begin to understand Bleeker, you need to free up a few hours of time and many brain cells.  I can tell you that I probably spent in excess of 30 hours on this file.  My recollection is there was a Motor vehicle accident on the New York side of the GW Bridge. The MVA was the fault of Defendant as she rear-ended the Utica vehicle.

The injured person was working, and Utica had a comp and a no-fault endorsement on this policy.

Injured person files in New Jersey for comp benefits which New Jersey law defines as PIP subtitute benefits.  There is a limited right to subrogation for these payments, which did not apply in this case.  The same holds true for compensation lost wage benefits.  I also think the same similarly holds true for scheduled loss compensation benefits, although the Appellate Term did not want to touch this one with a ten foot pole.

In any event, a $15,000 case is probably not worth maybe $1,000?  I am not sure of the dollar value, as it has been awhile.  Here is the case itself:

Order (Manuel J. Mendez, J.), dated June 7, 2010, insofar as appealed from, modified to the extent of granting defendant-appellant partial summary judgment dismissing plaintiff’s cause of action for medical expenses it paid on behalf of its subrogor and so much of the complaint as sought recovery of the initial $5,200 in workers’ compensation payments made to the subrogor; as modified, order affirmed, without costs.

In this subrogation action, plaintiff insurer seeks reimbursement for, inter alia, medical expenses and workers’ compensation benefits paid in lieu of first-party no-fault benefits to its subrogor for injuries he sustained as a result of an automobile accident with defendant, which occurred in New York during the course of subrogor’s employment. Since plaintiff provided a workers’ compensation insurance policy to subrogor’s employer, Knorr Brake Corporation, a Maryland-based company, subrogor initially received temporary benefits processed by Maryland’s Workers’ Compensation Commission. Ultimately, however, subrogor, as a New Jersey resident, successfully pursued his additional and final workers’ compensation benefits with the New Jersey Division of Workers’ Compensation.

Following discovery, defendant Rhondi Bleeker moved for summary judgment dismissing plaintiff’s complaint on the grounds that choice of law principles dictate this action to be governed, and consequently barred, by New Jersey and New York laws. Plaintiff cross-moved for partial summary judgment, countering, inter alia, that Maryland law governed. In the order appealed from, Civil Court denied defendant’s motion and plaintiff’s cross motion for [*2]summary judgment, while agreeing with plaintiff that Maryland law applied, thus permitting the continuation of this action. We modify.

While Civil Court properly determined that the law and forum where workers’ compensation benefits were paid will govern an action for reimbursement of those benefits (see New Jersey Mfrs. Ins. Co. v Steckert, 264 AD2d 314, 315 [1999], citing Matter of O’Connor, 21 AD2d 333, 335 [1964]; see Carminucci v Pepsico, Inc., 236 AD2d 499, 501 [1997]; Canfield v Child World, 209 AD2d 569, 569-570 [1994]), and that under Maryland’s Workers’ Compensation Act, an insurer is entitled to assert a subrogation claim for reimbursement of benefits paid (see Podgurski v OneBeacon Ins. Co., 374 Md 133, 140 [Md Ct of Appeals 2003]), Civil Court erred in concluding that this action is governed by the law of Maryland.

To the contrary, the record indicates and it is undisputed that plaintiff’s subrogor ultimately pursued his claim with the New Jersey Division of Workers’ Compensation, which culminated in an award approving the parties’ “settlement” of the claim based upon a “finding” that “the terms of the settlement are fair and just,” and awarding him permanent disability benefits and deeming the temporary disability awarded in Maryland and medical bills “adequate as p[ai]d.” Since subrogor invoked New Jersey’s Workers’ Compensation provisions for an adjudication of his claim and received a final award thereunder, this action is governed by the law of the State of New Jersey (see Williams v A & L Packing and Storage, 314 NJ Super 460, 465-466 [NJ App Div 1998]; Phillips v Oneida Motor Freight, Inc., 163 NJ Super 297, 305 [NJ App Div 1978]; see also Cramer v State Concrete Corp.,39 NJ 507, 511 [NJ 1963]).

Applying New Jersey law to the instant matter, most of plaintiff’s subrogation claims fail. Although New Jersey law authorizes an employer to institute an action against a responsible tortfeasor if the injured person does not do so, “the third party shall be liable only to the same extent as he would have been liable had the employee himself instituted suit within a year of the accident” (Patterson v Adventure Trails, 364 NJ Super 444, 447 [NJ Super 2003], quoting Continental Ins. Co. v McClelland, 288 NJ Super 185, 189-190 [NJ App Div 1996]). As such, plaintiff’s subrogation claim for medical expenses in the principal sum of $7,884.97, and workers’ compensation payments up to the sum of $5,200, that would otherwise have been collectible under a standard personal injury protection endorsement covering the subject loss (see NJSA 39:6A-4; see also Rutgers Cas. Ins. Co. v Ohio Cas. Ins. Co., 153 NJ 205, 210 [NJ 1998]), cannot be recovered against defendant (see Patterson v Adventure Trails, 364 NJ Super at 447). Accordingly, defendant’s motion for summary judgment dismissing these claims should have been granted only to the extent provided.

However, the record is inconclusive as to plaintiff’s entitlement to reimbursement for disability payments, if any, in excess of the above stated sum of $5,200 (see e.g. NJSA 39:6A-10), and resolution of this issue must await a more fully developed record.