All posts by Christopher Major

Christopher Major is an attorney in the general litigation department at Lois LLC. Christopher defends the rights of carriers and self-insureds in reimbursement claims under New York WCL § 29 and New Jersey’s Section 40 (N.J.S.A. 34:15-40) as well as any other related litigation. He can be reached at 201-880-7213 x 103.

No Double Recovery: Don’t Accept “One Third Each”

When seeking reimbursement on behalf of a carrier or employer under New York Workers’ Compensation Law Section 29 (“Section 29”) or N.J.S.A. 34:15-40 (“Section 40”) a particular scenario arises all too frequently: one of the other parties asking that the reimbursement right be reduced by equal measure against all parties; the “one-third, one-thirds one-third” offer. The carrier does not have to accept this reimbursement offer and in many cases should not!

At the most simplified level there are three prospective recipients of any settlement value in a civil case that involves a Section 29 or Section 40 lien: the claimant/petitioner, the third-party plaintiff’s attorney and the employer or workers’ compensation carrier. In this basic three-party structure, an even split of the settlement proceeds in to thirds would seem to make logical sense. In fact, the third-party plaintiff’s attorney will frequently assert that this is the “norm,” and that this is how “every case” ultimately resolves. They will also usually proffer some rationale as to why the Section 29 or Section 40 lien should be compromised, typically regarding issues with liability and allegedly poor chances of success at trial. Essentially, their argument is that some reimbursement is better than no reimbursement, and therefore the lien should be compromised to induce the claimant/petitioner’s consent to settlement. When it comes to such arguments, however, it is vital to keep in mind the legislative intent behind Section 29 and Section 40 and the protection the courts give that intent.

Continue reading No Double Recovery: Don’t Accept “One Third Each”

Properly Calculating Your Section 40 Reimbursement in New Jersey

N.J.S.A. 34:15-40 (“Section 40”) grants a right of reimbursement to workers’ compensation carriers. This reimbursement is to the extent of benefits paid to an injured worker should that injured worker file a third-party civil suit against the responsible tortfeasor. See N.J.S.A. 34:15-40. The limitations on this recovery are set forth in subsections (b) and (c) of Section 40, which both provide that any third-party recovery is reduced by the employee’s “expenses of suit” and the attorney’s fee. Subsection (e) goes on to define “expenses of suit” as an amount not to exceed $750.00 and the attorney’s fee as an amount not to exceed 1/3rd of the ultimate settlement proceeds.

While the language of the statute is plain on its face, there is confusion regarding the precise application of the aforementioned reductions. For instance, it is common knowledge that, in a typical civil suit settlement, disbursements come “off the top” of the settlement proceeds. Disbursements are, by their very nature, not part of the amount to be divided amongst the intended recipients. By way of illustration, assume a civil case settles for $100,000.00 and there are exactly $10,000.00 in disbursements. Under such a structure, the plaintiff’s attorney would receive $30,000.00 as their fee and the plaintiff would receive the remaining $60,000.00.  Continue reading Properly Calculating Your Section 40 Reimbursement in New Jersey

Is there a $50,000.00 “Carve-Out” to a Workers’ Compensation Section 29 Lien When the Underlying Accident Occurs Outside the State of New York?

When an accident occurs outside the State of New York the $50,000.00 “carve-out” under New York Insurance Law §§ 5102 and 5104 does not apply to a Workers’ Compensation Law Section 29 lien.

The seminal case setting forth this bright-line rule is McHenry v. State Ins. Fund, 236 A.D.2d 89, 666 N.Y.S.2d 221 (3rd Dept. 1997). The Court in McHenry held that “absent an express statutory provision, a workers’ compensation carrier has the ‘inviolable’ right to a lien against the proceeds of ‘any recovery obtained by a compensation claimant in a third-party action.” Id. at 90-91 (citing Matter of Granger v. Urda, 44 N.Y.2d 91, 96 (1978)). The Court further stated that by the express terms of Insurance Law § 5104 itself the statute applies only to injuries stemming from the negligent operation of a motor vehicle in the State of New York. Id. at 91. Insurance Law § 5104(a) is not given “extraterritorial effect” even in situations where all parties are New York residents and the accident merely occurred in another state. Id. (citing Morgan v. Bisorni, 100 A.D.2d 956, 475 N.Y.S.2d 98 (1984)).

Subsequent decisions have likewise enforced this ruling even though the peripheral facts of the case may differ. (See discussion below of Ofori v. Green, 74 A.D.3d 474, 901 N.Y.S.2d 835 (1st Dept. 2010)). Continue reading Is there a $50,000.00 “Carve-Out” to a Workers’ Compensation Section 29 Lien When the Underlying Accident Occurs Outside the State of New York?