BEFORE:                                 HONORABLE RENEE RICCIARDELLI
                                                Administrative Supervising Judge of Compensation

APPEARANCES:

                                                 DEVLIN CITTADINO & SHAW
                                                Attorney for the Petitioner 

                                                MCELROY DEUTSCH MULVANEY & CARPENTER
                                                Attorney for the Respondent

This decision concerns the New Jersey Self-Insurers Guarantee Fund (hereinafter referred to as “Fund”) and its responsibility for paying workers’ compensation benefits to an injured worker, Ms. Patricia Combs.

On September 9, 2002, Ms. Combs was adjudicated to have a 42.5% permanent disability.  Subsequent to this determination, the bond for her bankrupt self-insured employer, Bradlees, was exhausted and its benefit payments to Ms. Combs ceased.  Ms. Combs then sought payment from the Fund for the remainder of the amount owed by Bradlees based on her disability award as well as for further medical treatment.  However, the Fund denied Ms. Combs’ request for payment.

The Fund now takes the position that: (1) this court lacks jurisdiction to decide whether the Fund has an obligation to pay these benefits to Ms. Combs; and (2) pursuant to N.J.S.A. 34:15-120.18, the Fund is not responsible for paying the benefits sought by Ms. Combs,. 

I disagree with both contentions made by the Fund for the reasons that follow.

In regard to the Fund’s first contention (i.e., that this court lacks jurisdiction to decide whether the Fund has an obligation to pay such benefits to Ms. Combs), I find no support for this argument in the language of our statutes or in the case law.  The Fund has relied mainly upon the Dooley case to support its contention that jurisdiction lies with the New Jersey Superior Court (rather than in the New Jersey Division of Workers’ Compensation) to decide whether the Fund must pay claims to workers’ compensation petitioners like Ms. Combs. This is an unpublished opinion of our Appellate Division and therefore cannot constitute precedent or be binding upon any court. R. 1:36-3.  However, I see Dooley as clearly inapposite because no issue of jurisdiction was ever addressed in that case - no party in the Dooley case ever raised the issue of whether jurisdiction lied with the New Jersey Superior Court or with the New Jersey Division of Workers’ Compensation. Therefore, Dooley is not applicable on the jurisdiction issue here and cannot be cited as providing support for the Fund’s first argument.

Furthermore, there is nothing in the Workers’ Compensation Act to support the Fund’s contention that the New Jersey Superior Court has sole jurisdiction to decide such issues as whether the Fund is obligated to pay workers’ compensation benefits to an injured worker. To the contrary, N.J.S.A. 34:15-49 expressly states that “[t]he Division of Workers’ Compensation shall have the exclusive original jurisdiction of all claims for workers’ compensation benefits under this chapter.” (Emphasis added.) In addition, it is indisputable that the Fund was created pursuant to Chapter 15 of the Workers’ Compensation Act.  And N.J.S.A. 34:15-120.18 specifically obligates the Fund to make “payments of compensation under Chapter 15 of Title 34.”  In effect, these sections of the Workers’ Compensation Act combine to obligate the Fund to stand in the stead of a bankrupt employer with regard to the payment of workers’ compensation benefits owed injured workers by bankrupt self-insured employers.  And unlike the New Jersey Legislature’s express language in N.J.S.A. 34:15-120.4 (i.e., where the Legislature specifically directs that appeals of final decisions made by Commissioner of Labor and Workforce Development in Uninsured Employer’s Fund cases be filed in the Appellate Division), the New Jersey Legislature decided not to enunciate any such specific route  for workers’ compensation petitioners who need to challenge denial decisions made by the Fund (see N.J.S.A. 34:15-120.15 to 120.30). Absent any specific legislative directive concerning jurisdiction over Fund obligation issues, I must conclude that the exclusive, original jurisdiction expressly set forth in N.J.S.A. 34:15-49 applies and is dispositive of the issue of jurisdiction raised here. Accordingly, I find that jurisdiction over the issue of the Fund’s obligation to pay workers’ compensation benefits lies with the New Jersey Division of Workers’ Compensation because the workers’ compensation statutes offer no support for the Fund’s contention that such jurisdiction lies elsewhere.

As a final point regarding the Fund’s first argument about jurisdiction, requiring an injured workers’ compensation petitioner to later file another unnecessary claim in the Superior Court is contrary to the spirit of the Workers’ Compensation Act and its goal of providing injured workers with benefits as quickly and as inexpensively as possible. Such an extra requirement, if imposed upon injured workers as the Fund suggests, would subject those injured workers to greater expenses (in the form of filing fees and increased attorney fees) as well as greater delay in obtaining needed medical and wage replacement benefits.  Such an imposition would run afoul of a bedrock public policy goal underlying our workers’ compensation system and is unacceptable on its face.

Turning now to the Fund’s second argument (i.e., that because Ms. Combs received notice of the Bradlees bankruptcy and became an enumerated creditor and she did not object to Bradlees estimate of its debt being $0.00, she is not entitled to benefits from the Fund), I must say that I find this argument is not only contrary to the letter and spirit of our workers’ compensation law, but also clashes with the legislative intent behind the statute that created the Fund to help make injured workers whole in situations where  self-insured employers declare insolvency.

The Fund argues that N.J.S.A. 34:15-120.18 requires an employee of a bankrupt employer to make an application to the bankruptcy court in order to become eligible for payment of workers’ compensation benefits from the Fund.  The Fund also argues that the rule it proposes here should apply categorically to all employees of bankrupt employers, regardless of when their injury occurred (i.e., apply to pre- or post-bankruptcy injuries).  The Fund goes on to argue that, since Ms. Combs did not object to the Bradlees debt estimate of $0.00, she failed to act properly, and therefore lost her rights to the workers’ compensation benefits she was owed by Bradlees. 

I find the Fund’s second argument is spurious and legally ungrounded for a number of reasons. 

A careful reading of N.J.S.A. 34:15-120.18 (i.e., with proper attention paid to its punctuation) is necessary to address this contention.  This statute provides that: 

Upon creation of the Insolvency Fund pursuant to the provisions of Section 5 of this act, the association is obligated for payments of compensation under chapter 15 of Title 34 of the Revised Statutes to insolvent members’ employees resulting from: (1) incidents and injuries existing prior to the member becoming an insolvent member; and (2) incidents and injuries occurring after the member has become an insolvent member, if the employee makes timely claim for those payments according to procedures set forth by a court of competent jurisdiction over the delinquency or bankruptcy proceeding of the insolvent member.

The semi-colon placed between the phrase referring to “incidents and injuries existing prior to the member becoming an insolvent member” and the phrase referring to “incidents and injuries occurring after the member has become an insolvent member” is critical in Ms. Combs’ case because it creates a disjunctive relationship between the kinds of injuries referred to by those phrases, and does not create the conjunctive relationship that the Fund infers from this statute.  Therefore, the requirement expressed by the phrase “if the employee makes timely claim” should not be read as connected to the phrase expressed before the semi-colon (i.e., “incidents or injuries existing prior to the member becoming an insolvent member”).  Accordingly, I find that the Fund’s position that Ms. Combs was required to make a “timely claim” is incorrect - such a requirement does not apply in Ms. Combs’ case because her claim is based upon an injury existing prior to Bradlees becoming an insolvent self-insured employer (rather than injury occurring after Bradlees became insolvent).

Second, if the New Jersey Legislature intended that a “timely claim” be statutorily required before the Fund can pay on both pre-bankruptcy and post-bankruptcy injury claims, there would have been no need for the Legislature to make the careful distinction it has drawn between these two types of injuries by the language and punctuation used in N.J.S.A. 34:15-120.18.  Since federal bankruptcy law requires an insolvent to list all creditors, and this applies to cases involving pre-bankruptcy work injuries, adding an extra requirement (i.e., that the injured worker must also file a timely claim for payments after notification of the bankruptcy) imposes a superfluous burden on the injured worker.  I cannot conclude that the New Jersey Legislature intended to add an extra burden on injured workers when their compensation payments from an employer suddenly cease due to an employer’s bankruptcy which occurs after the worker’s injury has already occurred. 

Again, the Fund depends on the Dooley case, and again that matter is distinguishable. In Dooley, the petitioner was injured and respondent went into bankruptcy prior to the establishment of the Fund. The Appellate Division remanded the matter for the trial court to “…determine whether Dooley’s claim was scheduled by the bankrupt and, if so, whether Dooley’s claim would automatically be recognized without the need for Dooley to file a separate claim.”  On remand the trial court found that Dooley did not file a claim even after being advised to file.  There is nothing in the decision after remand which addresses the issue of Dooley having been listed as a creditor (which is inapposite of the situation at bar.)

I, therefore conclude, based on my review of applicable statutes and case law, that the arguments made by the Fund must be rejected because these arguments lack sufficient grounding and basis in law.  Accordingly, I order that this matter now be placed on the list to address issues pertaining to the Fund’s obligation for payment of further medical treatment, and hereby order the Fund to immediately commence payment to Ms. Combs based upon the permanency award she obtained against Bradlees. 

                                                                        _______________________________

                                                                        Renée C. Ricciardelli
                                                                        Administrative Supervisory Judge

Date: February 18, 2005