Automobile Insurance SubrogationAutomobile Total Loss ThresholdsDeductible ReimbursementDiminution of ValueFuneral Procession Traffic LawsImputing Contributory Negligence of Driver to Vehicle OwnerLaws Regarding using Cell Phones/Headphones/Texting While DrivingLoss Of UseMed Pay/PIP SubrogationNo Pay, No Play LawsOwner Liability For Stolen VehiclesPayment of Sales Tax After Vehicle Total LossPedestrian and Crosswalk LawsRental Car Company Physical Damage and Loss of Use ClaimsRental Car Company’s Liability Insurance Primary or ExcessSlower Traffic Keep RightSudden Medical Emergencies While DrivingSuspension of Drivers’ LicensesUse of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Federal , State, and Local Governmental EntitiesMunicipal/County/Local Governmental Immunity and Tort LiabilityState Sovereign Immunity And Tort Liability
General Tort Laws/StatutesAnti-Indemnity StatutesContribution ActionsContributory Negligence/Comparative FaultDog Bite LawsEconomic Loss DoctrineParental ResponsibilitySpoliationStatute of LimitationsStatute of Limitations Exceptions
Health Insurance SubrogationHealth and Disability Insurance
InvestigationAdmissibility of Expert TestimonyPre-Suit Disclosure of Liability Policy Limits in Third-Party ClaimsRecording Conversations
Product Liability SubrogationProduct Liability Law
Property Subrogation“Matching Regulations” And Laws Affecting Homeowners Property ClaimsCondominium/Co-Op Waiver of Subrogation LawsDamage to Property Without Market ValueGeneral Contractor Overhead And Profit Payments In First-Party ACV Property Damage ClaimsLandlord/Tenant Subrogation
Subrogation GenerallyAnti-Subrogation RuleCriminal RestitutionMade Whole DoctrineMedical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Workers’ CompensationEmployee Leasing LawsHospital Lien LawsOCIP/CCIP Subrogation In Workers’ Compensation Construction CasesRecovery Of Increased Workers’ Compensation Premiums By EmployerWhich Workers’ Compensation “Benefits” Can Be Subrogated?Workers’ Compensation Subrogation Waiver EndorsementsWorkers’ CompensationWorkers’ Compensation Claims by Undocumented Employees
Automobile Insurance Subrogation
Automobile Total Loss Thresholds
Total Loss Formula (See HERE for definition).
Insurer determines if it is “economically impractical” to repair vehicle or cost of repairs is higher than the market value of the vehicle. N.J.S.A. § 13:21-22.3 .
Automobile: Pro-Rata In Physical Damage Claims. (See Formula). N.J. Admin. Code 11:3-10.7 provides: (a) If an insured has received payment under his or her physical damage coverage that is subject to a deductible, the insured shall share, pro-rata, with the insurer any net recovery received by the insurer from third parties; (b) Net recovery shall be the total recovery less the insurer’s allocated loss adjustment expenses attributable to such recovery. The formula for computing net recovery and the insured’s share of recovery of the deductible may be stated as follows: Total Recovery – Allocated Loss Adjusting Expenses = Net Recovery (Deductible ÷ Total Loss) X Net Recovery = Insured’s Share of Recovery; (c) Unless the insurer returns its insured’s full deductible the insured shall attempt to effect full recovery in clear liability cases and shall not enter into any intercompany agreements that provide for the acceptance of lesser amounts on a formula basis; and (d) If an insurer has paid a physical damage claim that is subject to a deductible and it elects not to pursue its subrogation claim where the probability of recovery exists, the insurer shall so notify its insured in writing within 60 calendar days after it has paid the claim, except that the notification shall be given at least 30 days prior to the running of any applicable statute of limitations or period required for notice of claim. If an insurer does not notify its insured within the time periods prescribed above and the statute of limitations or period required for notice or claim has expired, the insurer shall forthwith remit to its insured the full amount of the insured’s deductible.
For physical damage claims, there is no specific requirement to include the deductible in the demand but the insured must be reimbursed pro-rata any net recovery. If the insurer does not pursue subrogation where probability of recovery exists, the insurer must notify the insured in writing within 60 days after it has paid the claim – within 30 days if the statute of limitations is running. If statute of limitations runs and the insurer hasn’t complied with these notice provisions, the insurer must reimburse the full amount of the deductible to the insured.
Automobile: PIP/Med Pay Deductible Recoveries Not Allowed. N.J. Admin. Code S.A. § 39:6A-12. The Automobile Reparation Reform Act (no-fault law) prohibits the injured party from recovering a medical expense deductible and/or 20% copayment under a PIP policy from the tortfeasor.
Related Case Law: Roig v. Kelsey, 641 A.2d 248 (N.J. 1994).
Diminution of Value
First Party: Depends on policy language. Early case law says that actual cash value of an auto loss is established as fair market value, and have applied principles holding that when the cost to repair a vehicle is proven, but there exists additional proof showing that even with the repair, the vehicle has depreciated, the plaintiff is entitled to the reasonable cost of repair plus the depreciation, if any. Fanfarillo v. East End Motor Co., 411 A.2d 1167 (N.J. App. 1980). Where policy unambiguously excludes coverage for diminution of value the insurer’s liability is capped at the cost of returning the damaged vehicle to substantially the same physical, operating, and mechanical condition as existed immediately before the loss. Insurer’s obligation does not include liability for any inherent diminished value caused by conditions or defects that are not subject to repair or replacement, such as a stigma on resale resulting from “market psychology” that a vehicle that has been damaged and repaired is worth less than a similar one that has never been damaged. Kieffer v. High Point Ins. Co., 25 A.3d 1206 (N.J. Super. App. 2011).
Third Party: Measure of damages, when auto is damaged, is the difference between the reasonable market value of auto before and after the tortious injury and the cost of repair and the depreciated value of vehicle as a result of having been in an accident, is the appropriate measure of damages, so long as total does not exceed the diminution in market value and does not exceed the pre-accident market value of the vehicle. Fanfarillo v. E. End Motor Co., 411 A.2d 1167 (N.J. Super. 1980). In Fanfarillo, the value before the theft was $7,900 and after the theft $5,000, a difference of $2,900. There was also evidence that the vehicle as repaired was worth only $7,500, so that the jury could have found total damages to the vehicle of $2,313 ($1,913 for the cost of repair and $400 depreciated value).
Funeral Procession Traffic Laws
New Jersey law states that if any procession takes longer than five minutes to pass a given point, it must be interrupted every five minutes for waiting traffic. N.J. Stat. § 39:4-93. The ambiguity of the law was interpreted by a New Jersey court in 1978, which concluded that it was not intended to give a funeral procession a preferential right-of-way, nor did it take precedence over the requirement to stop for a red light. The case arose when a driver entering an intersection under a green light collided with a member of a procession who had entered against a red light. Pohi v. Topal, 383 A.2d 435 (N.J. Super. 1978). Authorized emergency vehicles, U.S. mail vehicles, and physicians’ vehicles have the right-of-way through a procession.
Imputing Contributory Negligence of Driver to Vehicle Owner
Imputed Contributory Negligence Law: Contributory negligence of permissive user of vehicle is not imputed to owner when owner sues third party to recover for damages to vehicle. Motorlease Corp. v. Mulroony, 81 A.2d 25 (N.J. 1951).
Vicarious Liability/Family Purpose Doctrine: No Vicarious Liability Statute.
An agency relationship is created when one family member performs an act for another. When one member of the family is acting for a “family purpose” it may justify holding the head of the family vicariously liable for the driver’s negligent operation of a motor vehicle. Willett v. Ifrah, 298 N.J. Super. 218, 219, 689 A.2d 195, 195 (App. Div. 1997).
Sponsor Liability for Minor’s Driving: No Sponsorship Liability Statute.
Laws Regarding using Cell Phones/Headphones/Texting While Driving
Cell Phone/Texting: Drivers with a learner’s permit may not use a cell phone in any capacity. N.J.S.A. § 39:3-13.2a.
All cell phone use must be hands-free, which includes text messaging. N.J.S.A. § 39:4-97.3(a).
Other Prohibitions: No Applicable Laws.
Comments: No person may use earphones or headphones while operating a self-propelled vehicle, motorized vehicles, or bicycles while on the street. Sayreville Borough, N.J. Code of Ordinances § 5-19.
Loss Of Use
Loss of Use: Yes. Loss of use damages are recoverable for the time reasonably necessary to compete repairs to the vehicle. Damages may be calculated based on rental value of a substitute vehicle but may also include “personal inconvenience” suffered due to the lack of a vehicle. Camaraza v. Bellavia Buick Corp., 523 A.2d 669 (N.J. Super 1987). A plaintiff should not be barred from recovery for loss of use of a vehicle simply because he has not rented a substitute vehicle. Id. Where a vehicle is totally destroyed, loss of use damages may be awarded for time period required to purchase a replacement vehicle. Bartlett v. Garrett, 325 A.2d 866 (N.J. Super. 1974).
Lost Profits: Possibly. Evidence of lost profits was not admissible since the plaintiff had not provided evidence that a similar vehicle could not be hired. Francischini v. McMullen, 142 A. 651 (N.J. Sup. Ct. 1928). Therefore, it seems possible that lost profits may be claimed as a calculation for loss of use if proof is provided that a similar vehicle cannot be rented. The measure of damages is the amount that will compensate the plaintiff for “all detriment.” Hintz v. Roberts, 98 N.J.L. at 770-771, 121 A. at 712 (1923); Graves v. Baltimore & N.Y.R. Co., 69 A. 971 (N.J. Super. 1908), and in some cases, loss of earnings or business profits are allowed as damages if the loss is the proximate result of the damage to the motor vehicle. Nightengale v. Public Service Co-ord. Transport, 149 A. 526 (N.J. Super. 1930).
Med Pay/PIP Subrogation
Med Pay: Med Pay subrogation rights in NJ remain unclear. NJ policies do not provide typical Med Pay benefits. However, “Extended Medical Benefits Payments” (EMBP) coverage is required per N.J.A.C. 11:3-7.3(b). They are not available where basic PIP benefits apply. Section 39:6A-4 makes no mention of EMBPs. It speaks only about “medical expense benefits.” EMBPs were part of NJ personal auto policies when no-fault laws were enacted. The Dept. of Ins. in Circular Letter New Jersey Automobile 9, dated February 22, 1993, explaining its position on PIP coverage, took the position that EMBP “will be subrogable.” No existing NJ cases mention this letter. Additionally, the Circular predates the passage of New Jersey’s collateral source rule, § 2A:15-97 and Perreira v. Rediger, 169 N.J. 399 (2001), which limit subrogation for bodily injury claims to those subrogation rights provided in a statute. There is no case law stating whether New Jersey’s PIP recovery statute, §39:6A-9.1 includes a right to recover Med Pay. However, Warnig v. Atlantic County Special Servs., 833 A.2d 1098 (N.Y. App. 2003) stated Med Pay can be subrogated from a worker’s comp carrier under § 39:6A-6, which, quite similarly to § 39:6A-9.1 allows for recovery from a worker’s comp carrier of “benefits pursuant to §§ 4 and 10 of P.L. 1972, c. 70 (C. 39:6A-4 and 39:6A-10), medical expense benefits pursuant to § 4 of P.L. 1998, c. 21 (C. 39:6A-3.1) or benefits pursuant to § 45 of P.L. 2003, c. 89 (C. 39:6A-3.3) it has paid….” Warnig held this recovery statute did not refer to Med Pay so Med Pay was not recoverable. Similarly, Ingresoll v. Aetna Cas. and Sur. Co., 649 A.2d 1269 (N.J. 1994) found that the anti-stacking provision of § 39:6A-4.2 does not apply to Med Pay, since they are not PIP benefits. Based on these decisions, it is unlikely that Med Pay is recoverable under § 39:6A-9.1. Put another way, if Med Pay is not PIP for purposes of §§ 39:6A-4.2 or 39:6A-6, it is probably not PIP for purposes of § 39:6A-9.1. Thus, subrogation recovery of Med Pay benefits is probably prohibited, and insurance regulations permitting subrogation and lien clauses for Med Pay are probably invalid and in violation of § 2A:15-97.
Choice No-Fault State. No-fault verbal threshold optional. No-fault introduced in 1973 with monetary threshold, which was changed to verbal threshold in 1988. In 1998, the law allowed consumers to choose between “standard auto policy” and “basic auto policy”. Standard policy requires choice of tort options: (1) verbal threshold (can recover non-economic damages only when death, dismemberment, disfigurement or permanent injury); or (2) traditional tort option (unrestricted recovery of non-economic damages). N.J.S.A. § 39:6A-43. Default is verbal.
Formal demand for arbitration must be filed within two years of filing PIP claim in order to satisfy statute governing recovery of PIP benefits from tortfeasor. N.J.S.A. § 39:6A-9.1; New Jersey Auto. Full Ins. Underwriting Ass’n v. Liberty Mutual Ins. Co., 636 A.2d 550 (N.J. Super. 1994).
PIP: No direct subrogation rights against tortfeasor exist where PIP benefits are paid, even when tortfeasor is not covered by no-fault insurance. Latimer v. Boucher, 458 A.2d 528 (N.J. Super. 1983); N.J.S.A. § 39:6A-12 (no-fault benefit payment evidence exclusionary rule). May be able to subrogate against commercial vehicle or livery vehicle (many rules and exceptions). PIP benefits are recoverable within 2 years from (1) tortfeasors not required to carry PIP or (2) tortfeasors required to carry PIP but failed to do so. N.J.S.A. § 39:6A-9.1. This includes all non-motor vehicle defendants (dram shop, product liability). State Farm v. Licensed Beverage Ins. Exch., 679 A.2d 620 (N.J. 1996). (Costs of processing PIP benefits also recoverable). An example would be commercial and public vehicles, and some out-of-state vehicles. State Farm v. Licensed Beverage Ins. Exch., 679 A.2d 620 (N.J. 1996). This creates a “new direct right of action” in the insurer that is “primary and not linked to any purported subrogation rights.” Hanover Ins. Co. v. Borough of Atlantic Highlands, 709 A.2d 236 (N.J. Super. 1998). There is no right of subrogation or reimbursement against a public entity. N.J.S.A. § 59:9-2(e).
No Pay, No Play Laws
Rule: New Jersey statute bars uninsured motorists that are injured, drivers under the influence that are injured, or acting with the intent to injure himself or others while operating a vehicle from economic and non-economic recovery from the tortfeasor.
Authority: New Jersey Supreme Court upheld New Jersey’s No Pay, No Play laws as constitutional. Caviglia v. Royal Tours of America, 842 A.2d 125 (Sup. Ct. of N.J. 2004). N.J.S.A. § 39:6A-4.5
Owner Liability For Stolen Vehicles
Key In The Ignition Statutes: N.J.S.A § 39:4-137. (Requires the motor to be turned off in unattended vehicle but says nothing about removing key from ignition).
Common Law Rule: A vehicle owner can be held liable for injuries to a third party where the theft was foreseeable and could have been guarded against. Hill v Yaskin, 380 A2d 1107 (1977); Lomano v. Ideal Towel Supply Co., 51 A.2d 888 (Dist. Ct. Hoboken, N.J. 1947).
Payment of Sales Tax After Vehicle Total Loss
First-Party Claims: Insurer must offer a cash settlement based upon (1) average retail of substantially similar vehicle, (2) a quotation for a substantially similar vehicle from a dealer located within a reasonable distance, or (3) fair market value, plus applicable sales tax. N.J. Admin. Code § 11:3-10.4.
Third-Party Claims: The requirements for auto physical damage first-party claims found in N.J.A.C. §§ 11:3–10.1 through 10.4 shall also be construed to apply to automobile property damage third-party claims from the time that liability becomes reasonably clear. N.J. Admin. Code § 11:2-17.10.
Pedestrian and Crosswalk Laws
N.J.S.A. § 39:4-36: Vehicle must yield to pedestrians close to or in vehicle’s half of crosswalk. Pedestrians must not leave crosswalk in front of vehicle if vehicle does not have time to stop.
N.J.S.A. § 39:4-36: Pedestrians outside crosswalk must yield to vehicles. Both pedestrians and vehicles must still exercise due care for each other on the road.
Summary: Driver’s negligence as to failing to yield to pedestrian was question for jury. Bora v. Yellow Cab Co., 103 N.J. Law 377, 135 A. 889 (N.J. 1927). Pedestrian with right-of-way must still exercise reasonable care. Id.
Rental Car Company Physical Damage and Loss of Use Claims
Recovery From Renter: Recovery of physical damage and loss of use are not prohibited or otherwise regulated. Terms of rental agreement control. Collision Damage Waivers not regulated.
Recovery From Third-Party: Nothing specifically stating car rental company can recover loss of use. Generally, damages may include loss of use of a vehicle during the time necessary to complete repairs, where the owner is temporarily deprived of the use of his vehicle. Camaraza v. Bellavia Buick Corp., 523 A.2d 669 (N.J. Super. 1987). Section 11:3-10.6 of the New Jersey Administrative Code governs loss of use when the vehicle is stolen.
Rental Car Company’s Liability Insurance Primary or Excess
Summary: No case or statutory law dealing specifically with car rental companies. Terms of rental agreement and renter’s liability policy should be compared to determine which is primary. New Jersey law requires the car rental company to have liability coverage. N.J. Stat. § 45:21-2. If both policies contain excess insurance clauses, they will share the loss equally up to the statutory minimums, and then pro-rata thereafter. Ambrosio v. Affordable Auto Rental, 704 A.2d 572 (N.J. 1998).
Slower Traffic Keep Right
Statute: N.J.S.A. § 39:4-82, N.J.S.A. § 39:4-88, N.J.S.A. § 39:4-88(e), N.J.S.A. § 39:4-97.1,N.J.S.A. § 39:4-85.
Summary: Drivers must drive in the right lane. The left lane may be used for overtaking another vehicle or in preparation for a left turn. Trucks of at least 10,000 lbs. registered gross weight may not drive in far left-hand lane of roadway with three or more lanes, except for up to one mile before a left-hand turn, to enter or exit roadway, or due to emergency conditions. Passing on the right is prohibited unless vehicles are in “substantially continuous lines.” The driver of a vehicle on a highway, about to be overtaken and passed by another vehicle, approaching from the rear, shall give way to the right in favor of the overtaking vehicle , and shall not increase the speed of his vehicle until completely passed by the overtaking vehicle. No person shall drive a vehicle at such a slow speed as to impede or block the normal and reasonable movement of traffic except when reduced speed is necessary for safe operation or in compliance with law.
Sudden Medical Emergencies While Driving
Sudden Emergency Doctrine. Defense may only be used in situations where a driver is confronted by an imminent situation over which he had no control, without fault on his part. Leighton v. Sim, 591 A.2d 985 (N.J. App. Div. 1991).
No cases using the sudden emergency defense for a medical emergency.
Suspension of Drivers’ Licenses
Administrative Suspension: Within 90 days of receipt of the accident report, the Director may suspend the license of each driver and the registration of each owner involved in the accident unless they deposit security or provide proof of insurance. N.J.S.A. § 39:6-25(b). Suspension will last for one year if no action for damages was filed or until the driver deposits the required security, is adjudicated not liable, is released, or enters into an installment agreement. N.J.S.A. § 39:-27.
Judgment: If an uninsured driver fails to satisfy a final judgment rendered against him within 60 days, upon receiving a certified copy of the judgment, the Director will suspend the judgment debtor’s driver’s license. N.J.S.A § 39:6-35. The suspension will stay in effect as long as the judgment is unstayed and unsatisfied, or by an order of the same court in which the judgment was entered. N.J.S.A § 39:6-35.
Contact Information: State of New Jersey, Motor Vehicle Commission, P.O. Box 160, Trenton, NJ 08666, (609) 292-6500, https://www.state.nj.us/mvc/license/licrenew.htm.
Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Authority: N.J.A.C. § 11:2-17.10.
Summary: Non-OEM parts must be marked with the manufacturer’s identification and that identification should remain visible if at all practical. Insurers may not require the use of non-OEM parts unless it is of equal quality to its OEM counterpart and the part’s manufacturer has placed a warranty on the part. The estimate must inform the insured that the repairs include non-OEM parts and that the non-OEM parts are of equal quality to their OEM counterpart. Section 11:2-17.10(a)(11) provides as follows:
11. No insurer shall require the use of after market parts in the repair of an automobile unless the after market part is warranted by the manufacturer in a reasonable manner as to duration and coverage and at least equal in like kind and quality to replacement parts available from the original manufacturer of the part in terms of fit, quality and performance. Use of after market parts which have been certified by an independent testing laboratory as being of like kind and quality to the original manufactured part will be deemed to be in compliance with the requirements of this paragraph.
Federal , State, and Local Governmental Entities
Municipal/County/Local Governmental Immunity and Tort Liability
New Jersey Tort Claims Act: N.J.S.A. §§ 59:1-1 through 59:12-3 (1972). “Public entity” includes all counties, municipalities, districts, and other political subdivisions. N.J.S.A. § 59:1-3. Immunity waived. A “public entity” is liable for injury caused by an act or omission of a public employee in the same manner and to the same extent as a private individual unless there is exception in Act. N.J.S.A. § 59:2-2.
Notice Deadlines: A claim against a “public entity” for death or for injury or damage to person or to property shall be presented not later than the 90th day after accrual of the cause of action. Six (6) months after notice has been received, suit may be filed. Suit must be filed within two (2) years after the date of accrual. N.J.S.A § 59:8-8.
A suit for contribution or indemnity against a public entity by a defendant is included in these requirements. Jones v. Morey’s Pier, Inc., 2017 WL 3184454 (N.J. 2017).
Claims/Actions Allowed: Public entity liable for:
- Condition of property if dangerous condition and failure to take action “palpably unreasonable.” N.J.S.A. § 59:2-3.
- Sewer back up if maintenance program was palpably unreasonable or negligence in performance.
- Ministerial or operational functions.
- Negligent operation of motor vehicle. Gruschow v. New Jersey State Highway Dep’t, 152 A.2d 150 (N.J. App. 1959).
Limitations on liability:
- A discretionary function (involves policy judgment or determining resources or when or whether to purchase equipment, construct or maintain facilities, hire personnel or provide adequate services). N.J.S.A. § 59:2-3.
- Adopting or failing to adopt a law or by failing to enforce any law. N.J.S.A. § 59:2-4.
- Failure to make an inspection, or negligent inspection of any property. N.J.S.A. § 59:2-6.
- Crime, actual fraud, actual malice, or willful misconduct. N.J.S.A. § 59:2-10.
- Discretion in decision-making or prioritizing needs when faced with budgetary issues.
See N.J.S.A. § 59:2-5 for other exceptions.
Damage Caps: No Dollar Caps. No subrogation allowed against “a public entity or public employee.” N.J.S.A. § 59:9-2(e). No recovery for pain and suffering, but limitation on recovery unless permanent loss of bodily function, permanent disfigurement, or dismemberment when medical expenses are in excess of $3,600. Punitive damages cannot be awarded. N.J.S.A. § 59:9-2 (c) and (d).
State Sovereign Immunity And Tort Liability
Tort Claims Act: New Jersey Tort Claims Act. N.J.S.A. §§ 59:1-1 through 59:12-3 (1972).
Notice Deadlines: A claim against the State for death or for injury or damage to person or to property shall be presented not later than the 90th day after accrual of the cause of action. Six months after notice has been received, suit may be filed. Suit must be filed within two years after the date of accrual. N.J.S.A § 59:8-8.
Claims/Actions Allowed: A public entity is liable for injury proximately caused by an act or omission of a public employee within the scope of employment in the same manner and to the same extent as a private individual under like circumstances. N.J.S.A. § 59:2-2. For claims against the State involving a State employee’s negligent operation of a State motor vehicle, the plaintiff must show that the actions were “palpably unreasonable.” Coyne v. State, Dep’t of Transp., 867 A.2d 1159 (2005).
Comments/Exceptions: The State is not liable for acts involving a discretionary function. N.J.S.A. § 59:2-3. The State is not liable for any injury caused by adopting or failing to adopt a law or by failing to enforce any law. N.J.S.A. § 59:2-4. The State is not liable for injury caused by its failure to make an inspection, or by reason of making an inadequate or negligent inspection of any property. N.J.S.A. § 59:2-6. The State is not liable for the acts or omissions of a public employee constituting a crime, actual fraud, actual malice, or willful misconduct. N.J.S.A. § 59:2-10. See N.J.S.A. § 59:2-5 for other exceptions.
Damage Caps: None.
General Tort Laws/Statutes
Prohibits Broad Indemnity. Applies to any Covenant, Promise, Agreement or Understanding in Connection with Construction Contract. N.J. Stat. § 2A:40A-1.
Not applicable to validity of insurance policy or workers’ compensation issue.
Modified Joint and Several Liability. Several liability for defendants less than 60% at fault, otherwise defendants will be held jointly and severally liable. N.J.S.A. § 2A:15-5.3.
Contribution allowed provided there is a judgment, determination of plaintiff’s damages, and existence of non-settling defendants. Settling tortfeasor is entitled to contribution from other joint tortfeasors if settlement extinguishes the joint tortfeasor’s liability and settlement was reasonable, provided the settlement is elevated to a final judgment (e.g., consent judgment from court or dismissal). N.J. Stat. § 2A:53A-3; Steele v. Kerrigan, 689 A.2d 685 (N.J. 1997). No contribution allowed with ordinary settlement, unless there was a dismissal, the non-settling tortfeasor was not a party to the suit, and the SOL bars any subsequent claim against the contribution defendant by the original plaintiff. Gangemi v. National Health Laboratories, Inc., 701 A.2d 965 (N.J. App. 1997). There is a six (6) year statute of limitations from the date the cause of action accrues (payment). N.J.S.A. § 2A:14-1; Ideal Mut. Ins. Co. v. Royal Globe Ins. Co., 511 A.2d 1205 (N.J. Super. 1986).
Contributory Negligence/Comparative Fault
Modified Comparative Fault: 51% Bar. Damaged party cannot recover if it is 51% or more at fault. If 50% or less at fault, it can recover, although its recovery is reduced by its degree of fault. If plaintiff’s negligence is not greater than that of the defendant, plaintiff can recover but will find his damages proportionately reduced. N.J.S.A. § 2A:15-5.1.
Dog Bite Laws
Dog owner will be held strictly liable for damages to victim when victim is on public property or lawfully on private property. N.J. Stat. Ann. § 4:19-16.
Economic Loss Doctrine
Majority Rule. A consumer may not bring an action in negligence and strict liability for economic loss arising from the purchase of a defective product, but must rely on breach of warranty remedies in U.C.C. Alloway v. General Marine Indus., L.P., 695 A.2d 264 (N.J. 1997). New Jersey has not decided whether the ELD applies when the parties are of unequal bargaining power, the product is a necessity, no alternative source for the product is readily available, and the purchaser cannot reasonably insure against consequential damages. In 1987, New Jersey adopted the ELD via statute with the Product Liability Act, in which it defines “harm” as physical damage to property, other than the product itself. N.J.S.A. § 2A-58C-1. Where a subrogation suit is brought against the insurer of a yacht that sunk, the subrogated carrier is limited to warranty claims with regard to recovery of damages to the yacht itself. Alloway, supra. Exceptions include when there is damage to “other property” (Naporano Iron & Metal Co. v. American Crane Corp., 79 F.Supp2d 494 (D.N.J. 1999)) and fraud and misrepresentation (Coastal Group, Inc. v. Dryvit Sys., Inc., 643 A.2d 649 (N.J. 1994). There is no “sudden and calamitous” event exception. Naporano, supra.
Within the ELD, the “product” includes all component parts. Sea-Land Serv., Inc. v. General Elec. Co., 134 F.3d 149 (3rd Cir. 1998) (defective master connecting rods caused ship engine failure). Since all but the very simplest of machines have component parts, a contrary holding would require a finding of property damage in virtually every case where a product damages itself. A battery is considered a component part of a sailboat if it is originally outfitted with the boat when purchased. Cont’l Cas. Co. v. Exide Techs., 2010 WL 11570369 (D. N.J. 2010) (Note: plaintiff claimed the battery created a health risk to its insured, but the court noted that such potential for harm to the insured was not pled in the Amended Complaint, which sought recovery for “substantial damage and destruction to the Sailboat.”).
Damage to Certain Transportation Infrastructure. Liability imposed on parents when a child willfully or maliciously causes damage to railroad, public utility, street railway, traction railway. N.J.S.A. § 2A:53A-16.
The limit of liability is $5,000.00 plus costs. Child must be under 18-years-old.
Damage to School Property. Liability imposed on parents when a child damages school property. N.J.S.A. § 18A:37-3.
There is no limit to liability. Child must be under 18-years-old.
Adverse Inference/Sanctions: Spoliation of evidence in a prospective civil action occur when evidence relevant to the action is destroyed, causing interference with the action’s proper administration and disposition. Manorcare Health v. Osmose Wood, 336 N.J. Super. 218, 226, 764 A.2d 475, 479 (N.J. App. Div. 2001); Cockerline v. Menendez, 988 A.2d 575 (N.J. App. 2010) (quoting Aetna Life & Cas. Co. v. Imet Mason Contractors, 707 A.2d 180 (N.J. App. 1998)). In civil litigation, depending on the circumstances, spoliation of evidence can result in a separate tort action for fraudulent concealment, discovery sanctions, or an adverse trial inference against the party that caused the loss of evidence. Rosenblit v. Zimmerman, 166 N.J. 391, 400-06, 766 A.2d 749 (N.J. 2001). This is a traditional negligence cause of action and not a separate tort for negligent spoliation. But, the Supreme Court of New Jersey held that it did not recognize a separate tort action for intentional spoliation. Id. at 404-405. An adverse inference instruction may be given during the underlying litigation whereby it is presumed the destroyed evidence would have been unfavorable to the destroyer. Swick v. N.Y. Times, 815 A.2d 508, 511 (N.J. 2003). In Swick, the plaintiff dismissed his action against the product manufacturer because they went into bankruptcy and had no insurance; and proceeded against the New York Times alone for spoliation after they sold the product to a company in the Philippines after being advised to preserve it. However, because they wouldn’t have been able to recover from the manufacturer, the spoliator caused no real damages. The court recognized the difficulty in using the suit-within-a-suit method to prove damages in a negligence case based on spoilation of critical evidence because the lost evidence impedes the plaintiff’s ability to prove both proximate cause for the underlying event and proximately caused damages. But they concluded that other jurisdictions have wrestled with this knotty issue. A plaintiff must demonstrate, however, that but for the defendant’s loss or destruction of the evidence, the plaintiff had a reasonable probability of succeeding in the underlying suit. In 27-35 Jackson Ave., LLC v. Samsung Fire & Marine Ins. Co., Ltd., 2021 WL 4126884 (N.J. Super. App. 2021), the court held that the plaintiff was required to demonstrate not only the lost opportunity to pursue a case against the manufacturer, installer, or maintenance provider because of defendant’s spoliation of the sprinkler head, but also that it suffered actual damages because of defendant’s negligence. As to this second aspect of the proximate cause element, plaintiff was not required to demonstrate the underlying suit would have succeeded, but it needed to marshal more than simply an expert’s opinion that there could have been three reasons for the sprinkler head’s failure and, hence, three possible target defendants. Plaintiff failed to do so, and, as a result, the judge properly granted summary judgment.
In New Jersey, the traditional approach to spoliation begins with identifying the spoliator, because that, in and of itself, will impact on the available and appropriate remedies.” Robertet Flavors, Inc. v. Tri-Form Constr., Inc., 1 A.3d 658 (N.J. 2010) (citing Tartaglia v. UBS PaineWebber, Inc., 961 A.2d 1167 (N.J. 2008)). When the spoliator is the defendant in the suit, the court is empowered to fashion an appropriate remedy. Cockerline, supra. (“Depending on the circumstances, spoliation can result in dismissal, a separate tort action for fraudulent concealment, discovery sanctions, or an adverse trial inference against the party that caused the loss of evidence.” (citing Jerista v. Murray, 883 A.2d 350 (N.J. 2005))). In 27-35 Jackson Avenue v. Samsun, 263 A.3d 200 (N.J. App. 2021), the court said:
The best known civil remedy that has been developed is the so-called spoliation inference that comes into play where a litigant is made aware of the destruction or concealment of evidence during the underlying litigation….
Courts use the spoliation inference during the underlying litigation as a method of evening the playing field where evidence has been hidden or destroyed. It essentially allows a jury in the underlying case to presume that the evidence the spoliator destroyed or otherwise concealed would have been unfavorable to him or her. An adverse or spoliation inference may be utilized to address the intentional or negligent spoliation of evidence by a party to the suit. “[T]he factfinder is permitted to presume that the evidence the spoliator destroyed or concealed would have been unfavorable to him or her.”
Discovery sanctions may include a designation that certain facts are taken as established, a refusal to permit the disobedient party to support or oppose claims or defenses, prohibiting the introduction of designated matters into evidence, dismissal of an action, or entry of judgment by default. Id. An appropriate remedy may include an award of counsel fees in exceptional cases, particularly where there is a finding of intentional spoliation and the non-spoliating party’s ability to defend itself was compromised. Grubbs v. Knoll, 376 N.J. Super. 420, 435-436, 870 A.2d 713 (N.J. Super. A.D. 2005).
Statute of Limitations
Personal Property6 YearsN.J.S.A. § 2A:14-1,2
Personal Injury/Death2 YearsN.J.S.A. § 2A:14-2
Breach of Contract/Written6 YearsN.J. Stat. § 2A-14-1
Breach of Contract/Oral6 YearsN.J. Stat. § 2A-14-1
Breach of Contract/Sale of Goods4 YearsN.J. Stat. § 12A:2-725
Statute of Repose/ProductsN/AN/A
Statute of Repose/Real Property10 YearsN.J.S.A. § 2A:14-1.1*
Breach of Warranty/U.C.C.4 YearsN.J.S.A. § 12A:2-725
Workers’ Comp Third Party Case2 YearsN.J.S.A. § 34:15-40
Strict Product Liability (Personal Injury)2 YearsN.J.S.A. § 2A:14-2
Strict Product Liability (Property Damage)6 YearsN.J.S.A. § 2A:14-1
Statute of Limitations Exceptions
*10 Years from completion of improvement to real property. N.J.S.A. § 2A: 14-1.1.
Health Insurance Subrogation
Health and Disability Insurance
Statute of Limitations: 2 Years. N.J.S.A. § 2A:14-2. Medical Malpractice – 6 Years. Fraser v. Bovino, 721 A.2d 20 (N.J. App. Div. 1998).
Subrogation of Medical and Disability Benefits are not allowed. N.J.S.A. § 2A:15-97; Perreira v. Rediger, 169 N.J. 399, 414, 778 A.2d 429, 438 (2001). Made Whole Doctrine applies, but can be overridden by clear language or the presence of a large deductible or an SIR. City of Asbury Park v. Star Ins. Co., 242 N.J. 596, 606, 233 A.3d 400, 405 (2020). Common Fund Doctrine applies. Sutter v. Horizon Blue Cross Blue Shield of New Jersey, 406 N.J. Super. 86, 105, 966 A.2d 508, 519 (App. Div. 2009).
Admissibility of Expert Testimony
Admissibility Standards: Frye
Case/Statutory Law: N.J. R. Evid. 702
Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims
Duty To Disclose: Yes.
Failure To Disclose A Basis For Bad Faith: An insurer who receives a request, from an attorney admitted to the practice of law in this State, for disclosure of the policy limits under a private passenger automobile insurance policy issued by the insurer to an insured, shall provide written disclosure of the policy limits to the attorney no later than 30 days from receipt of the request. The disclosure shall indicate the limits of all private passenger automobile insurance policies and any applicable umbrella or excess liability insurance policies issued by the insurer to the insured. N.J.S.A. § 39:6A-13.2.
Comments: The request must be in writing and include a laundry list of information set forth in the statute. The Department of Banking and Insurance will publish on its website the email address of each insurer, which shall be supplied by each insurer issuing private passenger automobile policies in this State, for the purpose of receiving requests for policy limit disclosures pursuant to this section. New law effective July 22, 2021.
One-Party Consent: It is not unlawful for an individual who is a party to or has consent from a party of an in-person or electronic communication to record and or disclose the content of said communication unless the person is doing so for the purpose of committing a tortious or criminal act. It is also lawful for an individual to record electronic communications that are accessible to the general public. N.J. Stat. Ann. § 2A:156A-4(d); N.J. Stat. Ann. § 2A:156A-2.
Product Liability Subrogation
Product Liability Law
Statute of Limitations/Repose: 2 years for personal injury and wrongful death. N.J.S.A. § 2A:14-2. Discovery Rule applies. Statute of Repose is 10 years. N.J.S.A. § 2A:14-1.1.
Liability Standards: Strict Liability, Consumer Expectation, Warranty.
Fault Allocations: Modified Comparative. N.J.S.A. § 2A:15-5.1.
Non-Economic Caps/Limits On Actual Damages: Yes.
Punitive Y/N and Limits: Yes (Limits).
Heeding Presumption?: Yes, Rebuttable.
Innocent Seller Statute: Yes. N.J.S.A. 2A:58C-9(b).
Joint and Several Liability: Yes, if > 60%. N.J.S.A. § 2A:15-5.3.
Available Defenses: Assumption of Risk; Misuse; Alteration; Learned Intermediary; Inherently Unsafe Products; State of the Art; Government Contractor Defense; Presumption; Seatbelts; Alcohol/Drugs; Sophisticated User.
Restatement 2nd or 3rd?: Restatement 3rd
“Matching Regulations” And Laws Affecting Homeowners Property Claims
Condominium/Co-Op Waiver of Subrogation Laws
New Jersey has not adopted the Uniform Common Interest Real Property Act. Title 46 discusses the responsibilities of a condo association, however, subrogation is not mentioned. See N.J.S.A. § 46:8B-14 Duties of the Association and § 46:8B-24.
Condo owner sued association for water damage from leaking pipe in common area. By-laws required unit owners to carry insurance with waiver of subrogation. The court denied recovery because the by-laws contemplated that there would be no litigation between unit owners and the association based on damage to the condo units or the personal property contained in them. Schoolhouse Commons at Union Ave. Condo Assoc. v. CCTS Tax Liens I, LLC, 2012 WL 95593 (N.J. App. 2012).
Subrogation waiver in condo by-laws precluded unit owner’s insurer from subrogating against uninsured upstairs neighbor and condo association. Skulskie v. Ceponis, 962 A.2d 589 (N.J. Super. A.D. 2009).
Damage to Property Without Market Value
Service Value: “In short, at least upon the record before us, we cannot say with reasonable assurance that the installation of a new pole did more than remedy the wrong done.” New Jersey Power & Light Co. v. Mabee, 197 A.2d 194 (N.J. 1964).
Intrinsic Value: When, however, the personalty (sic) is household furnishings and wearing apparel and the like, where the market value cannot be ascertained, the better measure of damages and the one we find applicable in this case, is the actual or intrinsic value of the property to the owner, excluding sentimental or fanciful value. Lane v. Oil Delivery, Inc., 524 A.2d 405 (N.J. Super. Ct. App. Div. 2006).
Sentimental Value: When, however, the personalty (sic) is household furnishings and wearing apparel and the like, where the market value cannot be ascertained, the better measure of damages and the one we find applicable in this case, is the actual or intrinsic value of the property to the owner, excluding sentimental or fanciful value. Lane v. Oil Delivery, Inc., 524 A.2d 405 (N.J. Super. Ct. App. Div. 2006).
General Contractor Overhead And Profit Payments In First-Party ACV Property Damage Claims
Payment And Depreciation Of GCOP/Sales Tax: No applicable case law, statutes, administrative rules, or other guidance with regard to the calculation and/or depreciation of GCOP.
Absent a clear contractual expression to the contrary, the insurance carrier will be permitted to sue a tenant in subrogation. Zoppi v. Traurig, 598 A.2d 19 (N.J. Super. 1990). If the landlord has a claim against the tenant, existence of insurance obtained by the landlord, paid by the landlord, for the benefit of the landlord, does not exculpate the tenant from consequences of negligent conduct, absent express agreement to that effect. Id.
New Jersey courts have generally followed the ASR with one limited exception in cases involving an insured’s criminal wrongdoing. See Ambassador Ins. Co. v. Montes, 388 A.2d 603 (N.J. 1978) (holding that in the case of an insurer, who pays an innocent party monetary damages due to liability of the insured ascribable to a criminal event, it is usually equitable that the insurer be indemnified by the insured). An insurer cannot subrogate against a co-insured. Guideone Mut. Ins. Co. v. Comito, 2007 WL 3170127 (N.J. Super. Ct. App. Div. 2007). Under N.J.S.A. § 39:6B-1, an auto dealer has no obligation to provide collision insurance for permissive test drivers therefore, unless the policy states otherwise, the permissive test driver is not an insured for damages to the vehicle and subrogation is permissible for physical damage to the test-driven vehicle. Universal Underwriters Group v. Heibel, 901 A.2d 398 (N.J. Super. Ct. App. Div. 2006). However, if an accident results in injury to an innocent third party, under N.J.S.A. § 39:6B-1, the vehicle owner’s liability insurance covers the test driver for injuries to that third party, preventing subrogation for those injuries. See Id. In Heibel, Heibel lost control of a motorcycle while test driving it and crashed. Universal Underwriters Group (“Universal”) paid the dealership for damages to the motorcycle and then sought to subrogate against Heibel for the damages to the motorcycle. The court held that Universal’s policy itself did not make Heibel an insured for damages to the vehicle, and that N.J.S.A. § 39:6B-1 did not mandate that permitted test drivers be insured under a dealership’s policy for physical damage to the vehicle. Therefore, subrogation for physical damage to the vehicle was permissible. In Hanover Ins. Co. v. Mi-Jack Products, Inc., 2018 WL 4761579 (D. N.J. 2018), Norfolk Southern filed an insurance claim with Hanover Insurance for damage to its lift truck. Hanover paid $408,100 to Norfolk Southern, which then assigned Hanover all of its “claims, rights and demands against third-persons” related to the damage to the lift truck. Hanover filed a subrogation suit against Mi-Jack and Mi-Jack then filed a Third-Party Complaint against H&M and others asserting claims for contribution and indemnification. Mi-Jack’s claims against H&M assert that if H&M’s negligence caused damage to the lift truck, H&M would be contributorily liable for the monetary payments Mi-Jack would have to pay out if it is found liable. H&M argued that New Jersey’s “anti-subrogation rule” barred Hanover from asserting a “right of subrogation against its own insured under the subrogating insurer’s policy.” The court held that it could not say that H&M, by virtue of its contractual obligation to pay for the insurance policy, is an “insured,” “co-insured,” or “additional insured” under that policy.
New Jersey statute permits recovery of restitution by a “victim,” albeit in an amount based upon the severity of the defendant’s criminal conduct. N.J. Stat. Ann. § 2C:43‐3. Appropriate case law has stated that insurers can recover restitution payments only after making payments to their insured. State v. Jones, 789 A.2d 131 (N.J. Super. Ct. App. Div. 2002).
Made Whole Doctrine
New Jersey has adopted the Made Whole Doctrine. O’Brien v. Two West Hannover Co., 795 A.2d 907 (N.J. Super. 2002); McShane v. N.J. Mfrs. Ins. Co., 375 N.J. Super. 305, 312 (App. Div. 2005); In Re Complaint of Weeks Marine, 2006 WL 1843130 (D.N.J. 2006). An insurer who is entitled to subrogate may not do so if the insured has not been made whole. Werner v. Latham, 752 A.2d 832 (N.J. Super. 2000). New Jersey adheres to the Made Whole Doctrine with regard to automobile insurance subrogation, even though direct automobile insurance medical subrogation is not allowed, and health insurance subrogation, even though health insurance subrogation is not allowed. However, there is authority in New Jersey to the effect that the Made Whole Doctrine may be overridden by specific contract terms in a Plan or policy. Providence Wash. Ins. Co. v. Hogges, 171 A.2d 120, 124 (N.J. 1961); Culver v. Ins. Co. of North Am., 559 A.2d 400 (N.J. 1989). In Hogges, the Court explained that: In the absence of express terms in the contract to the contrary, [the insured] must be made or kept whole before the insurer may recover anything from him or from a third party under its right of subrogation. Against the insured, as well as against third parties, there may be recovery by the insurer (again, subject to the express terms of the contract) only if the cause is just and enforcement is consonant with reason and justice. Hogges, supra.
The Made Whole Doctrine should not take precedence over UM/UIM subrogation rights. Nikiper v. Motor Club of America Co., 557 A.2d 332 (N.J. Super. 1989). The Made Whole Doctrine also should not affect PIP recovery rights, but because such rights are limited to the third-party liability policy limits, there is often a race to recover these policy limits. Fernandez v. Nationwide Mut. Fire Ins. Co., 821 A.2d 564 (N.J. Super. 2008).
The New Jersey Supreme Court has observed that the Made Whole Doctrine applies to contractual as well as equitable subrogation. Culver, supra. An insurer may not avoid application of Made Whole Doctrine unless the insurance contract is sufficiently specific and honors reasonable expectations of the parties. In this context the relevant subrogation clause and agreements are to be evaluated. If the subrogation clause or contract is sufficiently specific to alter the common law Made Whole Doctrine neither can be disregarded unless it fails to honor the reasonable expectation of the parties is unconscionable, and violative of public policy. Under this approach the issue of whether the insured has been made whole or fully compensated is a question of law for the court. Werner, supra.
Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Collateral Source Rule: New Jersey has three versions of CSR:
- General CSR Statute: N.J.S.A. 2A:15-97.
- PIP CSR: N.J.S.A. § 39:6A-12.
- Tort Claims Act CSR: J.S.A. § 59:9-2(e).
General CSR Statute passed in 1987. It applies to personal injury/death cases and says if plaintiff receives collateral sources, they must be disclosed to the court and deducted from verdict/ recovery (except for workers’ compensation benefits and life insurance). Perreira v. Rediger, 778 A.2d 429 (N.J. 2001).
Recovery Of Medical Expenses Rule:
Private Insurance: Plaintiff can introduce evidence of the billed amount at trial, but require the past medical expenses be reduced by the court post-trial, less premiums paid. Cockerlin v. Menendez, 988 A.2d 575 (N.J. Super. App. 2010).
Medicare/Medicaid: CSR statute does not apply to Medicaid payments because they are reimbursable pursuant to Medicaid statute, N.J.S.A. § 30:4D-7.1. Lusby By & Through Nichols v. Hitchner, 642 A.2d 1055 (N.J. Super. App. 1994). Unpublished Law Division trial court decision holds plaintiff limited to introducing evidence of amounts actually paid by Medicare, not amounts billed. Charles v. Thomas, 2016 N.J. Super. LEXIS 2199 (Law Div. Oct. 3, 2016) (unpublished).
Related Law/Comments: General CSR Statute reverses the Common Law CSR by requiring plaintiff who receives collateral source benefits to deduct that amount from recovery. It acts as anti-subrogation statute by prohibiting subrogation of medical bills covered by insurance. Perreira v. Rediger, 169 N.J. 399 (N.J. Sup. 2001). It covers health insurance benefits (less premiums paid) even if subrogation required by policy, and social security benefits.
Employee Leasing Laws
An employee leasing company must register with the State under the State’s statutes. If it does, the employee leasing company and the client company are both considered employers and immune from third-party actions under the Exclusive Remedy Rule. N.J.S.A. § 34:8-72.
Hospital Lien Laws
Statute: N.J. Stat. §§ 2A-44-35 to 2A-44-46. Liens/Hospitals and Physicians.
(1) Notice of lien containing name and address of patient, date and location of accident, date of first treatment, name and address of hospital, and name and address of tortfeasor (if known) must be filed in office of country clerk of county in which injuries were incurred, prior to third-party settlement, but no later than 90 days after first treatment.
(2) Send by registered mail (or personal service) copy of notice of lien along with statement of the date of filing to the patient and tortfeasor.
(3) Upon request, must furnish statement of injuries and itemized statement of charges and services to tortfeasor or his attorney.
Comments: Every hospital and nursing home and every physician or dentist have a lien against any personal injury claim of patient. § 2A-44-36. Lien attaches to all claims, suits, action which patient has against tortfeasor responsible for injuries up to date of third-party settlement. § 2A-44-37. Lien amount may not exceed “ward rates” and cannot exceed amount of third-party recovery. § 2A-44-38. For nursing home limited to per diem rate. § 2A-44-39.1. No lien if workers’ compensation. § 2A-44-40. Clerk of court must maintain hospital lien docket, listing name of injured person. Clerk can receive fee for filing of same. § 2A-44-41. No release by patient is valid after filing lien and tortfeasor remains liable to hospital for period of one (1) year. They can contest the charge. § 2A-44-43. Tortfeasor has right to examine statement of charges. § 2A-44-45. Lien must be discharged and released upon payment. § 2A-44-46.
OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases
OCIP Law: New Jersey’s OCIP statute authorizes the use of an OCIP for “school facilities projects.” N.J.S.A. § 18A-7G-44(a).
Statutory Employer Law: A general contractor is liable for payment of compensation benefits to employees of a subcontractor only in the event that the subcontractor has failed to secure workers’ compensation insurance. Wilson v. Faull, 141 A.2d 768 (N.J. 1958). However, there is no exclusive remedy immunity for statutory employers. Boehm v. Witte, 231 A.2d 240 (N.J. Super. 1967). If the general contractor becomes liable for compensation benefits to the employee of a subcontractor, he is granted a right of reimbursement from the derelict subcontractor. N.J.S.A. § 34: 79.
Comments: Note that the term “statutory employer” is not found in the New Jersey Workers’ Compensation Act. “Any contractor placing work with a subcontractor shall, in the event of the subcontractor’s failing to carry workers’ compensation insurance as required by this article, become liable for any compensation which may be due to an employee or the dependents of a deceased employee of a subcontractor. The contractor shall then have a right of action against the subcontractor for reimbursement.” N.J.S.A. § 34:15-79.
Recovery Of Increased Workers’ Compensation Premiums By Employer
Recovery For Increased Premiums? No.
Statute/Case Law: Multiplex Concrete Co. v. Besser Co., 380 A.2d 708 (N.J. Super. App. 1977) (per curiam) (action prohibited in both strict liability and negligence); United States Casualty Co. v. Hercules Powder Co., 72 A.2d 190 (N.J. 1950).
Rule Summary: An action for increased premiums is not an action the employer is pursuing on behalf of its employee’s rights, but rather, directly in its own right; rather it seeks damages directly related to the compensation payments made pursuant to the Workers’ Compensation Act.
Which Workers’ Compensation “Benefits” Can Be Subrogated?
In New Jersey, a § 40 lien includes payments made for temporary disability, permanent disability, and all medical expenses and treatment. The workers’ compensation lien does not include the carrier’s portion of a claimant’s attorney and expert fees, an employer or insurer’s expenses for a defense medical examination, nurse case management fees, or rehabilitative nursing services unless such nursing services primarily benefitted claimant and were reasonably necessary to claimant’s recovery. Kuhnel v. CNA Ins. Companies, 731 A.2d 564 (N.J. Super. 1999). Any expenses incurred by a workers’ compensation carrier for services of a rehabilitative nurse are recoverable as medical expenses under the workers’ compensation lien statute only if the carrier demonstrates that such expenses are necessary to provide medical and other treatment as shall be necessary to cure and relieve claimant of the effects of the injury. Raso v. Ross Steel Erectors, Inc., 725 A.2d 690 (N.J. Super. 1999).
Workers’ Compensation Subrogation Waiver Endorsements
Subrogation Statute: N.J.S.A. § 34:15-40
Waiver Allowed? Yes. New Amsterdam Cas. Co. v. Popovich, 113 A.2d 666 (N.J. 1955)
Effect Of Waiver Endorsement on Carrier’s Right To Assert A Lien On Claimant’s Recovery: A contractual waiver of subrogation provision bars the carrier’s claim for reimbursement as well. SAIF v. Fama Construction, 801 A.2d 459 (N.J. Super L. 2001), aff’d 801 A.2d 334 (N.J. Super. 2001).
Other Applicable Law: None.
Statute of Limitations: 2 Years. N.J.S.A. § 34:15-40.
Can Carrier Sue Third Party Directly: Yes, after 1 year.
Recovery from UM/UIM Benefits: Yes.
Subrogation Against Medical Malpractice: Yes.
Subrogation Against Legal Malpractice: Yes.
Recovery Allocation/Equitable Limitations: A carrier is reimbursed, less pro-rata share of the fees/costs.
Employer Contribution/Negligence: No.
Attorney’s Fees/Costs: Pro-rata of 1/3 fees and up to $750 in costs.
Future Credit: Yes.
Auto No-Fault: Yes.
Workers’ Compensation Claims by Undocumented Employees
Statute: The statute is silent on “aliens” and their legal status. N.J. Stat. Ann. § 34:15-36.
Case Law: Mendoza v. Monmouth Recycling Corp., 672 A.2d 221 (N.J. Super. App. Div. 1996). Fernandez-Lopez v. Cervino, 671 A.2d 1051 (N.J. Super. Ct. App. Div. 1996).
Comments/Explanation/Other: Mendoza concluded that because illegal aliens can file civil actions in court, they should be entitled to statutorily-mandated substitute of workers’ compensation. Cervino held that undocumented aliens could recover workers’ compensation benefits because the statutory definition did not exclude illegal aliens.