Opinion
DOCKET NO. A-4667-12T2
06-23-2014
SHAUN CRONRATH, Petitioner, v. BURLINGTON COUNTY COLLEGE, Respondent-Respondent.
Leitner, Tort, DeFazio, Leitner & Brause, P.C., attorneys for appellant Travelers Casualty Insurance Company of America (Vikrant K. Advani, of counsel and on the brief; Stephen M. Leitner, on the brief). Affanato Marut, L.L.C., attorneys for respondent (Michael S. Affanato, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Espinosa and Koblitz.
On appeal from Department of Labor and Workforce Development, Division of Workers' Compensation, Claim Petition No. 2009-29019.
Leitner, Tort, DeFazio, Leitner & Brause, P.C., attorneys for appellant Travelers Casualty Insurance Company of America (Vikrant K. Advani, of counsel and on the brief; Stephen M. Leitner, on the brief).
Affanato Marut, L.L.C., attorneys for respondent (Michael S. Affanato, on the brief). PER CURIAM
Appellant Travelers Casualty Insurance Company of America (Travelers) discovered that it had mistakenly represented Burlington Community College (BCC), the respondent in the workers' compensation case, and mistakenly agreed to pay a $35,000 settlement on BCC's behalf, although BCC was not insured by Travelers. Travelers appeals from a May 2, 2013 order entered by a Judge of Workers' Compensation (JWC) denying Travelers' application, filed well after it paid the judgment in question, to modify the award to remove its name. We affirm.
Shaun Cronrath, a BCC employee, filed a claim petition after he was attacked by a fan while coaching a basketball game. On the claim petition form, in the space labeled "Insurance Carrier," Cronrath listed "St. Paul Travelers Ins. Co." BCC was not and had never been insured by Travelers. Nevertheless, for reasons that do not appear in the record, Travelers accepted Cronrath's claim and negotiated a settlement on behalf of BCC. Under the terms of the settlement, Cronrath received a lump sum payment of $35,000. Travelers incurred $8,640.22 in legal expenses.
A hearing regarding the settlement was held at which Cronrath responded "Yes" to the following question: "Sir, you do understand that if the Judge approves the settlement that's the end of this workers' compensation claim for all time?" The JWC then issued an order approving settlement with dismissal pursuant to N.J.S.A. 34:15-20.
Travelers became aware that BCC was not one of its insured approximately three weeks after the JWC entered the judgment against Travelers. Travelers paid the agreed-upon sum to Cronrath and moved to modify the award nine months after the judgment was entered. A Travelers representative certified that BCC was "a self-insured entity utilizing Scibal Associates as a third-party administrator." Travelers explained it sought modification "simply to change who is listed as the representative of the Burlington County College. It [was] not in any way to affect any of the petitioner's rights." In opposing the application, BCC argued that Travelers was bound by the settlement agreement.
BCC does not deny that it was never insured by Travelers, but challenges the characterization that it is self-insured, stating that BCC is insured as part of the New Jersey Community College Insurance Pool, with Scibal Associates (now known as Qual-Linx) as its third-party administrator.
Focusing on N.J.S.A. 34:15-27, modification of agreement, as the operative "reopener statute," the JWC concluded that he had neither a statutory basis nor jurisdiction to reopen the settlement. On appeal, Travelers argues that the JWC had the inherent power to open the agreement, both in the interests of justice and equity and pursuant to Rule 4:50-1, because the judgment was entered as a result of mistake or inadvertence.
The statute reads in pertinent part:
Upon the application of any party, a formal award, determination, judgment, or order approving settlement may be reviewed within two years from the date when the injured person last received a payment on the ground that the incapacity of the injured employee has subsequently increased. . . . An award, determination, judgment, or order approving settlement may be reviewed at any time on the ground that the disability has diminished.
When reviewing a decision made by a JWC, we give substantial deference to the judge's factual findings. Bellino v. Verizon Wireless, 435 N.J. Super. 85, 94 (App. Div. 2014). However, we owe "no particular deference to the judge of compensation's interpretation of the law." Sexton v. Cnty. of Cumberland/Cumberland Manor, 404 N.J. Super. 542, 548 (App. Div. 2009).
Our courts have long recognized that the Division of Workers' Compensation (Division) "has that power inherent in all tribunals to reopen judgments in instances of fraud, mistake, inadvertence and the like," Estelle v. Bd. of Educ., 14 N.J. 256, 261 (1954), and the Supreme Court has cited R.S. 34:15-58, the predecessor to N.J.S.A. 34:15-58, as embracing that inherent right. N.J.S.A. 34:15-58 provides in pertinent part that an "order approving settlement shall be final and conclusive between the parties and shall bar any subsequent action or proceeding, unless reopened by the Division of Workers' Compensation or appealed as hereinafter provided." (Emphasis added).
In Stone v. Dugan Bros. of N.J., 1 N.J. Super. 13, 17 (App. Div. 1948), we held that under R.S. 34:15-58, the agency charged with enforcing the workers' compensation statutes "had implied statutory power to reopen its earlier judgment of dismissal" and "that the statutory power to reopen fully embraces instances where the judgment has been entered through mistake or inadvertence." The Stone interpretation was cited with approval by our Supreme Court in Estelle, supra, 14 N.J. at 261, and later in Beese v. First Nat'l Stores, 52 N.J. 196, 200-01 (1968) and by us in Hyman v. Essex Cnty. Carpet Cleaning Co., 157 N.J. Super. 510, 516 (App. Div. 1978). A JWC thus has both the statutory power under N.J.S.A. 34:15-58 and the inherent power, "comparable to that possessed by the courts ([Rule 4:50-1]), to reopen judgments for fraud, mistake, inadvertence, or other equitable ground." Beese, supra, 52 N.J. at 200.
The Court referred to R.R. 4:62-2, the predecessor of Rule 4:50-1.
Rule 4:50-1 makes relief available, even from a consent judgment, in appropriate circumstances, such as when mistake or inadvertence, newly discovered evidence, fraud or other reasons justify relief. See DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261 (2009) (stating that Rule 4:50-1 "denominates with specificity the narrow band of triggering events that will warrant relief from judgment if justice is to be so served"). The type of mistake contemplated is "errors that a party could not have protected against." Id. at 263 (quotation marks omitted).
Travelers, however, did not present sufficient cause to reopen the settlement to change the identity of the settling entity. If Travelers is entitled to reimbursement for a settlement it mistakenly entered into, it must seek such reimbursement from the liable entity in another court. As Travelers acknowledges, petitioner is not at blame nor should petitioner be involved in litigation seeking to modify the settlement. Workers' Compensation Court is not the proper forum for litigation between two insurers after a judgment has been entered and payment of that judgment made to petitioner.
Generally, the Division concerns itself with issues of compensability, or benefits to which an employee may be entitled "for personal injuries to, or for the death of, such employee by accident arising out of and in the course of [his or her] employment." N.J.S.A. 34:15-7 and -49. Travelers' claim against BCC lies outside this narrow scope.
Our Supreme Court's decision in Conway v. Mister Softee, Inc., 51 N.J. 254 (1968) is instructive. In that case one of two possible employers, "Pennsylvania," sought to initiate a direct action in compensation for contribution against a related employer after the petitioner's compensation case was decided and paid. Id. at 256. The Court emphasized that the issue would have been entirely different had the paying employer sought to join the alleged non-paying co-employer during the pendency of the proceedings. Id. at 257. The Court encouraged procedures that would justly resolve the controversy in one forum and concluded that the Division was without jurisdiction to "entertain the petition" filed post-judgment by Pennsylvania against another employer. Id. at 258. The Court opined:
We find nothing in the express language of the Workmen's Compensation Act which might confer jurisdiction over Pennsylvania's petition. Under the Act only a "claimant for compensation under article 2 of this chapter (§ 34:15-7 et seq.)" may file a petition. N.J.S.A. 34:15-51. Pennsylvania's claim here is not for "compensation," nor is Pennsylvania a "claimant under article 2" which article provides solely for benefits to an employee or his dependents.The Court further explained that no provision of the Act "gives the Division the authority to entertain an independent action between employers. The exercise by the Division of jurisdiction over litigation solely between two employers in no way would advance the purposes of the Compensation Act and cannot be considered as incident to the powers expressly granted by the Act." Id. at 259. Although Travelers did not file a new petition, but rather moved to correct the judgment due to "mistake" or "inadvertence," Travelers similarly attempted to involve the Division in a post-judgment dispute between two insurers, a dispute that lies outside the scope of the Compensation Act. The JWC correctly determined that he lacked jurisdiction to entertain Travelers' litigation against BCC to amend the judgment. This is particularly true in light of the fact that Travelers waited until October 19, 2012 to move to correct the JWC's February 3, 2012 judgment. Travelers could have sought to be dismissed from the action prior to paying the judgment. See Domanoski v. Borough of Fanwood, 237 N.J. Super. 452, 454 (App. Div. 1989) (resolving a dispute between employers aired in compensation court during the pendency of the original petition). Instead, Travelers entered into the settlement, realized it was not the proper insurer and paid the award within five weeks thereafter and then waited nearly six months, thus losing the ability to seek a remedy against BCC in that forum. See Conway, supra, 51 N.J. at 260-61 (stating that the because the paying employer failed to implead the non-paying employer during the pendency of the original petition, the paying employer has no ability to seek contribution from the non-paying employer in compensation court).
[Ibid.]
Travelers certified it attempted to resolve the payment issue with BCC informally when it realized its error, after settlement, but before the judgment was satisfied.
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Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION