State Employees Get a Double Recovery?

It’s a sad commentary on New Jersey: even our own state employees don’t want to live here. When you travel to Trenton the parking lots of the various state agencies are filled with cars bearing Pennsylvania license plates – and the rush hour traffic is directed out of New Jersey as New Jersey state workers travel home to their residences in Pennsylvania, where they enjoy lower property and income taxes.

This sad state of affairs gives rise to a recent decision that examines what happens when an employee collects workers’ comp benefits in one state but live sin another, where he recovers under an Uninsured Motorist policy.

In a recent case, a New Jersey state employee was injured while driving a New Jersey-issued car. He recovered New Jersey workers’ compensation benefits. Apparently, the vehicle which struck his official vehicle was not identified or did not carry insurance. So, the employee brought a claim for “Uninsured Motorist” benefits against his own (personal) auto policy (a personal policy under Pennsylvania law).

The New Jersey workers’ comp insurer asserted a lien against any recovery the petitioner recived from his personal auto insurer.

If the claimant was a New jersey resident, this would be a ‘no-brainer’: the workers’ comp carrier would pay medical, temporary, and permanency benefits and then recover a lien against the UM (uninsured motorist) carrier. However, this claimant accepted new jersey benefits, then recovered under his Pennsylvania auto policy, and then resisted reimbursing the New Jersey carrier, stating that he was entitled to keep both recoveries because Pennsylvania law allowed him to.

The New Jersey workers’ comp Judge relied on New Jersey state law – which forbids double recovery – and Ordered the claimant to reimburse the New Jersey Workers’ Comp carrier. The claimant appealed.

On appeal, a three-Judge panel (including Judge Maryann Espinosa, formerly a partner at Tompkins, McGuire, Wachenfeld & Barry) ruled that the Judge of Compensation should have performed a ‘conflict of laws’ legal analysis before summarily ruling that New Jersey law controlled. The case was remanded to the New Jersey workers’ comp Judge to make a final decision.

Conflict of laws issues crop up all the time – most often in cases where a claimant live sin one state and works in another. Some states (like New York) have ‘carve outs’ where specific amounts ($50,000, in New York’s case) are immune from subrogation by a comp carrier. The attorneys at Tompkins have been successfully arguing these cases for years – arguing that New Jersey law controls in issues of subrogation. We sty up-to-date on all changes in this area of the law and keep you informed as well!

Case: Terrence Johnson v. State of New Jersey, A-3202-07T3 (App. Div. Decided Nov. 20, 2009).

Greg Lois is the managing partner of LOIS LLC and dedicates his practice 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 & 2017 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or glois@loisllc.com