On December 14, 2015, David Mercogliano, an NJ Transit employee, was driving a car owned by NJ Transit when he was struck by another motorist. As a result of the accident, Mr. Mercogliano only suffered minor injuries and therefore his injuries did not overcome the verbal threshold. He was barred from suing the other driver. However, he was still able to receive workers’ compensation benefits through NJ Transit’s workers’ compensation carrier. They paid out a total of $33,625 as compensation for his medical bills and indemnity benefits.
In an effort to recoup the money that was paid out, the workers’ compensation carrier filed a subrogation action against the driver of the other vehicle. A Superior Court judge granted summary judgment against the workers’ compensation carrier, ruling that the Automobile Insurance Cost Reduction Act barred the subrogation claim. The workers’ compensation carrier appealed this decision and the Appellate Division overturned the lower court’s ruling.
Last week, the three-judge panel held that even though Mr. Mercogliano could not recover benefits from his own automobile insurance or sue the other driver for non-economic damages, the workers’ compensation carrier had the right to file a subrogation claim.
Their rationale was all about legislative intent. The court said that the Workers’ Compensation Act applies, not the Automobile Insurance Cost Reduction Act. And if the legislature wanted to bar these claims they would have included that language in the AICRA, which was drafted 87 years after the WCA, but they didn’t.
What does this ruling mean? Well, if it is determined that a plaintiff’s injuries do not meet the verbal threshold in NJ, that doesn’t mean the insurance carrier is in clear. Yes, the insurance carrier won’t need to pay out non-economic damages to the plaintiff, but if the plaintiff was in the scope of his employment at the time of the accident, the motor vehicle insurance carrier needs to be aware of a potential subrogation claim from his employer’s worker’s compensation carrier.
Thanks to Marc Schauer for his contribution to this post. Please email Brian Gibbons with any questions.