New Jersey court affirms Workers' Comp liens apply in police officer’s med-mal suit

By Elizabeth Alt | Jul 9, 2018

TRENTON, N.J. (Legal Newsline) – The New Jersey Superior Court, Appellate Division issued a ruling on June 20 standing behind a Superior Court of New Jersey Law Division ruling that a police officer who alleged medical malpractice after being injured on the job must pay a lien regardless of his award.

TRENTON, N.J. (Legal Newsline) – The New Jersey Superior Court, Appellate Division issued a ruling on June 20 standing behind a Superior Court of New Jersey Law Division ruling that a police officer who alleged medical malpractice after being injured on the job must pay a lien regardless of his award.

Judges Jack M. Sabatino, Mitchel E. Ostrer and Lisa A. Firko made up the panel for the Appellate Court, with Sabatino delivering the opinion.

According to the ruling, Paolo Marano was working as a police officer with Union Township Police Department when he injured his back in 2010. Marano saw an orthopedic surgeon, Clifford J. Schob, at Comprehensive Orthopedics. Marano alleges Schob incorrectly diagnosed his condition and failed to tell Marano to go to the emergency room. 

Marano went through rehabilitation treatments and was paid $51,779.81 from 2013 to 2016 by PMA Cos., Union Township Police Department’s administrator for Workers' Compensation benefits.

Marano filed a complaint in 2012 in the Law Division over medical malpractice allegations and during arbitration in 2016, PMA paid $250,000 to Marano after the arbitrator found no cause of action. Per the agreement, $42,000 was kept in a trust until the Workers' Compensation lien was resolved.

Marano asserted that the “lien had been extinguished as a result of the 'no cause' outcome of the arbitration," but PMA argues that if the lien is not satisfied, the $250,000 award would be “an improper double recovery.”

In 2017, a Workers' Compensation board judge found that the lien must be satisfied and directed the workers' compensation court to determine which expenses should be applied to the lien. The judge specifically noted that “a key purpose of the lien statute, N.J.S.A. 34:15-40(b), is to prevent double recovery by injured workers,” and rejected Marano’s argument that “the change in physician reporting requirements…eliminated the enforceability of PMA's lien in this high/low context.”

Sabatino stated that the N.J.A.C., a Department of Banking and Insurance regulation, “does not affect the validity and enforceability of the carrier's Section 40 lien, and that the lien applies to the proceeds collected by plaintiff from the medical malpractice defendants.”

The court also denied the request to repudiate its decision in a similar case, Pool v. Morristown Memorial Hospital, which determined that a plaintiff’s jury award was subject to a Workers' Compensation lien.

“As we have already noted, and continue to stress here, the rationale for the statutory right to a compensation lien is 13 A-3915-16T2 centered upon the public policy preventing double recovery... whether an alleged tortfeasor is ultimately held to be liable does not affect the enforceability of a lien,” Sabatino stated.

The case was remanded to the Law Division for the “limited purpose of reconsidering a disputed portion of the overall lien amount.”

Superior Court of New Jersey, Appellate Division case number A-3915-16T2

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