Failing to Deposit Settlement Check: Enough to Toll Statute of Limitations?

New Jersey Claimant Kimberly Paladino was injured at work on March 30, 2001. On February 3, 2005, she agreed to an ‘Order approving Settlement.’ Nine days later (February 14th, 2005) the respondent issued her draft for the settlement. The claimant then waited seventeen months (until July, 2006) to take the settlement draft tot he bank for deposit. The bank refused to honor the old check.
After the bank refused to honor the original check, the claimant requested that another draft be issued. the respondent complied, and issued a replacement check on July 26, 2006. The claimant deposited the check and enjoyed the proceeds.
The claimant then filed a ‘re-opener’ application on August 28, 2007, alleging that her disability had increased since the entry of her February 5, 2005 settlement and that she was entitled to more compensation.
The respondent raised the statute of limitations as a defense to the re-opener. Under the New jersey Workers’ Compensation Act, a claimant has “two years from the date when the injured person last received a payment upon the application of either party on the ground that the incapacity of the injured party has subsequently increased” to file a ‘re-opener’ claim. The respondent argued that the claimant has two years from the date of the original check being issued – not two years from the date the replacement checked was actually cashed – to re-open her claim. Under this reasoning, the claimant was ‘out-of-time’ on her re-opener.
The Appellate Court agreed: regardless of when the draft was actually cashed, the claimant’s opportunity for re-opener was governed by the date the respondent delivered the original check to the petitioner.
Case: Paladino v. Pier One Imports, App. Div. 39-2-5671 (Decided October 26, 2009).

Greg Lois is the managing partner of LOIS LLC, a 19-attorney law firm dedicated to defending employers and carriers in New York and New Jersey workers' compensation claims. Greg is the author of a popular series of "Handbooks" on workers' compensation, and is the co-author of the 2016 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or glois@lois-llc.com