CP# 94-48656 Anglin v. Rutgers University
CP No. 1994-48656
Petitioner, respondent and the Second Injury Fund (“Fund”) entered into a settlement and award approved by this court on October 8, 1998 that found petitioner totally and permanent disabled due to the combined effects of a 1996 work accident (85% of the total disability) and preexisting disabilities (15% of the total disability). The date of total disability was set as April 20, 1996. Benefits were to be paid by respondent at the rate of $431.00 a week which would provide for an initial lump sum payment for accumulated benefits from the date of total disability to the first payment and continuing weekly benefits by respondent until the August 19, 2003 commencement date for Second Injury Fund payments.
On October 8, 2002, petitioner filed a motion to have respondent comply with the 1998 award. It was asserted that respondent stopped payment on the award a year early and that payments should continue by respondent until the Second Injury Fund commencement date. There were no papers or appearance in opposition to the motion. See N.J.A.C. 12:235-3.3. An order was entered on December 6, 2002 requiring respondent to comply with the October 8, 1998 award and to immediately reinstate benefits and pay to petitioner any benefits that had been withheld. There was no appeal of this order and respondent paid withheld benefits and reinstated payments.
Respondent thereafter filed the present motion “to relieve the respondent Rutgers, from paying any additional money to the petitioner and for a finding that the petitioner was unjustly enriched.” In support of the motion, respondent’s counsel filed a certification claiming that the initial payment that included accumulated benefits was an overpayment and that respondent had fully paid petitioner under the settlement as of August, 2002.
At trial, respondent presented the testimony of Ms. Patricia Sutton, who is employed by the PMA Insurance Group, which is the third party administrator for respondent’s self-insured workers’ compensation program. Ms. Sutton stated that the initial check to petitioner was sent on November 2, 1998. It was explained that the amount of the initial check was for benefits from the date of total disability until November 13, 1998 and should have been for 134 weeks of benefits. She maintained that this information was somehow entered as 186.5 weeks of benefits or 52.5 additional weeks. The initial check for $72,163.57 therefore represented 186.5 weeks of benefits less petitioner’s share of assessments for counsel fee and medical reports. However, Ms. Sutton conceded that the overpayment on the initial check was the result of a mistake in the administration of the claim and that petitioner did not cause the mistake or mislead respondent in any manner. In fact, Ms. Sutton presented that this error was found by PMA on June 7, 2000 and that respondent’s administrator without notice to petitioner reconfigured the payments so that benefits would cease in August, 2002 rather than August, 2003. It is acknowledged that respondent through its administrator unilaterally stopped paying benefits after August, 2002 without advising petitioner or seeking a court modification of the award.
Petitioner, who is 72 year old and had worked as a plumber for respondent prior to the work accident, testified that he was told at the time of the 1998 award that he was to receive a large initial check. He maintained that the amount of the initial check did not surprise him and that the money was used to pay bills since he had not worked for several years. Petitioner presented that he had a monthly income of $3,757.76 from combined workers’ compensation, social security and a Rutgers pension and he detailed expenses that approximated this income. While petitioner owns a condominium, he stated that his mortgage of $1,382.00 a month was based on a mortgage loan of about 100% of the purchase price. He maintains he has no bank accounts, equities or bonds and that he has no finances to pay respondent for the asserted overpayment.
Hajnas v. Englehard Mineral & Chemical Company, 231 N.J. Super. 353 (App. Div. 1989), presents a comprehensive background on the issue of the overpayment of workers’ compensation benefits and the jurisdiction of the workers’ compensation court in such matters. It was recognized in that decision that this court has jurisdiction to hear a claim of benefit overpayment which would be reviewed in the context of unjust enrichment. Specifically, a respondent would have the burden of proof in establishing unjust enrichment and the petitioner would have the right to assert any defense to the claim. If this court should find that a respondent has established unjust enrichment, the original judgment or order can appropriately be modified. A successful respondent could thereafter seek reimbursement by instituting enforcement proceedings in the Law Division which may be heard as a summary proceeding. This process was more recently discussed in Montgomery v. Abex Corp., 253 N.J. Super. 480 (App. Div. 1992).
My December 6, 2002 order requiring respondent to reinstate benefits and pay benefits that had been withheld was not appealed and respondent’s responsibility for total and permanent disability benefits has now ended. The Second Injury Fund commenced payments effective August 19, 2003. The legislature, in setting the statutory process for permanent disability awards utilized a weekly benefit schedule to ensure that such affected injured workers have a set and continuous payment program similar to weekly wages. The law allows very few exceptions to this process. For instance, an individual may seek to have an award commuted under specific circumstances by court review and order finding that a commutation is in the best interests of the petitioner (N.J.S.A. 34:15-25) and an employer may deposit future monies owed to a trust which would then make payments “in the same amounts and at the same times as are required by the employer” after court review and order (N.J.S.A. 34:15-24).
I recognize, as stated in Montgomery, supra, that there may be times when concepts of equity would work against a rigid enforcement of the weekly benefit situation and I am mindful of the public policy to avoid duplicative payments for the same disability. However, such equitable or policy issues would be considered in the context of the clear and long established legislative and judicial foundation that in the absence of a court approved basis to commute a workers’ compensation award or for the implementation of a statutory offset “compensation payments are in lieu of wages, and are to be received by the injured employee or his dependents in the same manner in which wages are ordinarily paid.” N.J.S.A. 34:15-25. See, e.g., Newark Paving Co. v. Klotz, 85 N.J.L. 432 (Sup. Ct. 1914) aff’d 86 N.J.L. 690 (E & A 1914); Williams v.Department of City Welfare, 43 N.J. Super. 473 (Co. Ct. 1957). Further, commutation of an award is not even permitted in a total disability case such as Mr. Anglin’s situation where payments are generally made until a petitioner’s death with no clear cut-off date on which a commutation can be based. N.J.A.C. 12:235-6.3 (d). Therefore, absent a controlling basis to disrupt the statutory weekly schedule, adherence to this benefit program should be enforced. In this context and on the facts of this case, respondent’s initial payment and attempt to later discontinue weekly benefits can be viewed as an attempted commutation of petitioner’s benefits contrary to law and the intent of the workers’ compensation benefits provisions.
The parties in the present matter were provided by this court with a copy of unreported appellate decisions on overpayments and unjust enrichment which were decided subsequent to Hajnas, supra and Montgomery, supra. In Thomas v. Gregorowicz v. New Jersey Turnpike Authority, A-1528-96T3 (App. Div. 1998) (unreported), a case similar to the present matter, the respondent unilaterally reduced weekly benefits after entry of a total and permanent disability settlement with Second Injury Fund participation where respondent sought to recoup a credit for a bona fide tender. On petitioner’s motion, the workers’ compensation court ordered a reinstatement of the full weekly benefits and reimbursement of any moneys unilaterally withheld. No appeal of that order was taken. Thereafter, the respondent filed a motion to modify the award to allow reimbursement which was denied by the workers’ compensation judge. The Appellate Division first found that since no timely appeal was taken from the order requiring a reinstatement and reimbursement of benefits, a challenge to the order was denied on jurisdictional grounds. The court further noted that even if it were to disregard this issue, the delay by respondent in recognizing the overpayment and seeking recovery precluded relief. In reaching its decision, the appellate court also recognized that the denial of the respondent’s modification motion was within the sound discretion of the trial court. See also, Lewis v. Trafalgar House, A-6713-98T2 (App. Div. 2000) (unreported), where the court upheld the workers’ compensation court’s denial of respondent’s reimbursement request for an overpayment of temporary disability citing, among other cases, Levins v. Fulton Specialty, 99 N.J.L. 380 (E. & A. 1923), Ifka v. International Smelting & Ref. Co., 188 N.J. Super. 586 (App. Div. 1983) and DiMeglia v. Slonk Construction Co., 121 N.J.L. 366 (Sup. Ct. 1938), affirmed o.b., 122 N.J.L. 379 (E. & A. 1939), as precedent for a denial of overpayment requests in workers’ compensation proceedings.
It is well recognized that the one who charges unjust enrichment has the burden of proof on this issue. See, e.g., Kutzin v. Pirnie, 124 N.J. 500 (1991). In Messner v, County of Union, 34 N.J. 233, 238 (1961), the Court denied reimbursement to the plaintiff for monies mistakenly paid to the defendant for his former wife’s care in a public hospital after their divorce, and stated:
The theory of restitution is grounded upon the unjust retention of
a benefit. Even where a person has received a benefit from another,
liability to pay does not attach if the circumstances of the retention
are such that, as between the two persons, it is not unjust for the payee
to retain the benefit. The mere fact that a person benefits another is
not sufficient of itself to require the other to make restitution. (emphasis
Issues involving unjust enrichment require a close analysis of the facts in a particular case. Where there is fraud, failure to comply with a court directive or duress, there may be a sufficient basis to establish unjust enrichment and require a reimbursement or a suspension of benefits. See, Macula v. Rockaway Valley Regional Sewage Authority, A-3844-95T5 (App. Div. 1997) (unreported).
Both Ms. Sutton and petitioner were credible witnesses and there is no dispute as to any material fact as to the cause of the overpayment. It is acknowledged that respondent, through its program administrator, made an initial payment to petitioner for 186.5 weeks rather than 134 weeks or an additional $22,627.50 in benefits. Further, respondent presents that this payment was not based on any fraudulent or misleading actions by petitioner. It was therefore solely a calculation mistake by the administrator. Further, respondent, through its program administrator, was aware of this overpayment in June, 2000 and failed to alert petitioner or this court of any problem. No motion for modification or other action was taken and respondent then unilaterally suspended workers’ compensation benefits to petitioner in August, 2002, a year earlier than required by the consent agreement and court order. Petitioner thereafter sought reinstatement of benefits and payment of withheld monies. This relief was granted by this court without opposition and no appeal from that order was ever taken.
I accept as fact petitioner’s testimony that he was unaware that there was a mistake in the initial lump sum check and that the monies received at that time were utilized to pay bills and loans that he incurred from the work accident until the settlement of his workers’ compensation case. Additionally, based on petitioner’s income and expenses, I find that he does not have the financial resources to pay the $22,627.50 overpayment in the initial check. Moreover, respondent has completed its payments under the court order and workers’ compensation benefits are now being paid from the Second Injury Fund. Clearly, the equities establish that petitioner, who has limited resources and was unaware of the initial check error, should not now be held to reimburse respondent Rutgers for its program administrator’s mistake and concealment of the mistake for over a year.
The suggestion by respondent that Second Injury Fund benefits be paid to respondent rather than petitioner in order for respondent to recoup the initial check overpayment is misplaced. First, the Second Injury Fund was never made a party to respondent’s motion and has not participated in these proceedings. Therefore, any modification of the 1998 order affecting the Fund would be inappropriate. I also find that it would be contrary to the administration and policy of the Fund to stop or reduce the weekly benefits that petitioner is entitled to receive under the 1998 order. Besides being the trial judge in the present matter, I am also Director and Chief Judge of the Division of Workers’ Compensation. In my role as Director and Chief Judge, I have responsibility for, among other things, the operation of the Second Injury Fund in consultation with the Commissioner of Labor and others. Fund beneficiaries in accident cases receive fixed benefits based on their wages at the time of the disabling event. In the present matter, petitioner’s workers’ compensation rate of $431.00 is based on the 1994 work accident and his wages at that time. Despite expected cost of living increases and inflationary pressures, petitioner will never receive more than $431.00 a week in workers’ compensation benefits. To allow respondent to recoup its mistake through an attachment of Fund benefits to petitioner is neither supported in law and would clearly be inequitable and contrary to the public policy of providing a fixed generally lifetime benefit for individuals who are totally and permanently disabled under the Fund’s statutory program and mandate. I also find, based on petitioner’s income and expenses, that full Fund weekly benefits which will never increase are essential for petitioner to meet his necessary household costs.
After fully considering this case and the facts presented, I find that respondent has failed to meet its burden of proof and is not entitled to recoup the initial check overpayment since there has been no unjust enrichment under these circumstances. The October 8, 1998 order will remain in full force and effect and will not be modified.
While petitioner did not receive any additional monies in defending against respondent’s present motion, he did successfully avoid a repayment and loss of $22,627.50 in workers’ compensation payments. In such circumstances, I believe petitioner’s attorney is entitled to a reasonable counsel fee to be paid by the respondent. Any payment of a counsel fee by the petitioner would, in effect, be a reduction in his overall award and weekly benefit schedule. The Appellate Division in Maher v. Johnson & Johnson, A-256-00T2 (App. Div. 2002) (unreported), upheld the award of counsel fees in a similar situation where the workers’ compensation court dismissed a respondent’s application to modify a total and permanent disability award based on surveillance videos. Since the prior award was not modified, the court recognized that the award of counsel fees was allowed stating “[t]he confirmation of the prior judgment which requires continuation of benefits, cash and medical treatment, is tantamount to a money judgment in favor of petitioner.” Similarly, in the present matter, the continuation of benefits and the dismissal of respondent’s motion provides sufficient support for an award of counsel fees. Petitioner’s attorney may submit an affidavit of services and I will enter a separate order as to an appropriate counsel fee. A stenographic fee of $300.00 to Trainor Reporting Services will also be paid by the respondent.
September 26, 2003 ________________________
Peter J. Calderone
Judge of Compensation