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Thursday, August 2, 2012

NJ Supreme Court Bars Expansion of Injured Workers Remedies

Additional tort claim disallowed against insurance companies for intentional failure to comply with court of compensation's, an administrative agency, order to provide provide benefits.

Wade Stancil v. ACE USA (067640)
Argued 3/26/12 Decided 8/1/12 see


(This syllabus is not part of the opinion of the Court.  It has been prepared by the Office of the Clerk for the 

convenience of the reader.  It has been neither reviewed nor approved by the Supreme Court.  Please note that, in the 
interests of brevity, portions of any opinion may not have been summarized.) 

Wade Stancil v. ACE USA (A-112-10) (067640) 
Argued March 26, 2012 -- Decided August 1, 2012

HOENS, J., writing for a majority of the Court.
The Court considers whether an injured employee may sue his employer’s compensation carrier for pain and suffering caused by the carrier’s delay in paying for medical treatment, prescriptions, and other services. Plaintiff Wade Stancil was injured in 1995 while employed by Orient Originals.  He received workers’ compensation benefits from his employer’s compensation carrier, defendant ACE USA (ACE).  In 2006, following a  trial, the court of compensation determined that Stancil was totally disabled.  In 2007, Stancil filed a motion in the compensation court seeking an order compelling ACE to pay outstanding medical bills.  

During a hearing on the motion, the compensation judge commented that ACE had a history of failing to make payments when ordered to do so.  On September 12, 2007, the compensation judge granted Stancil’s motion, warned ACE against any further violation of the order to pay, and awarded Stancil counsel fees.  On October 29, 2007, the parties returned to the compensation court for a further proceeding relating to the disputed bills.  After finding that the bills identified in the September 12 order remained unpaid and that ACE’s failure to make payment was a willful and intentional violation of the order, the court issued another order compelling ACE to make immediate payment and again awarding counsel fees.  

The court commented on its limited ability to ensure that carriers would comply with orders, noted that it lacked the authority to enforce orders through contempt proceedings, found that Stancil had exhausted his administrative remedies, and suggested that he seek further relief in the Superior Court.  In 2008, Stancil underwent additional surgery and psychiatric treatment.  Stancil’s physician attributed the need for additional treatment to an earlier treatment delay caused by the carrier’s delay in paying medical providers.  

On April 15, 2009, Stancil filed this lawsuit in the Superior Court.  In his complaint, Stancil claimed that ACE required him to undergo medical examinations by physicians of its own choosing and then rejected the recommendations of those physicians and refused to authorize the recommended medical care.  The complaint stated further that Stancil obtained orders from the compensation court, but ACE failed to comply.  Stancil contended that ACE’s failure to authorize needed treatment caused him unnecessary pain and suffering, a worsening of his medical condition, and expenses that should have been paid by ACE.  ACE responded by filing a motion to dismiss the complaint.  ACE argued that the Workers’ Compensation Act, N.J.S.A. 34:15-1 to -142 (the Act), is the exclusive remedy for the claims pled in the complaint and therefore no damages could be awarded.  The trial court granted ACE’s motion.  The court analyzed the impact of then-recently adopted amendments to the Act and found that the Legislature had foreclosed resort to the Superior Court for the kind of tort-based relief demanded by Stancil.

The Appellate Division affirmed.  418 N.J. Super. 79 (App. Div. 2011).  The panel agreed with the trial court that The Legislature’s amendments to the Act foreclosed Stancil’s claims.  The panel also rejected Stancil’s argument that ACE’s willful disregard of compensation court orders met the Act’s intentional wrong exception to the litigation bar. The Supreme Court granted certification limited to determining whether an employee who suffered a work-related injury has a common-law cause of action for damages against a workers’ compensation carrier for its willful failure to comply with court orders compelling it to provide medical treatment when the delay or denial of treatment causes a worsening of the employee’s medical condition and/or pain and suffering.  207 N.J. 66 (2011).  

HELD:  An injured employee does not have a common law right of action against a workers’ compensation carrier for pain and suffering caused by the carrier’s delay in paying for or authorizing treatment because 1) the workers’ compensation system was designed to provide injured workers with a remedy outside of the ordinary tort or contract remedies cognizable in the Superior Court; 2) in amending the Workers’ Compensation Act in 2008, the Legislature rejected a provision that would have given the compensation courts broader permission to authorize a resort to the Superior Court and adopted a remedy that permits compensation courts to act through a contempt power; and 3) 2allowing a direct common-law cause of action against a carrier would undermine the workers’ compensation system by substituting a cause of action that would become the preferred manner of securing relief.

CHIEF JUSTICE RABNER, JUSTICE LaVECCHIA, and JUDGE WEFING (temporarily assigned) join  in JUSTICE HOENS’s opinion. JUSTICE ALBIN filed a separate, dissenting opinion. JUSTICE  PATTERSON did not participate.

Related Blog Articles

Aug 05, 2011
The lower court had rejected the case and dismissed it holding that the jurisdiction for bad faith is exclusively within the purview of the Division of Workers' Compensation. Stancil v. ACE USA, 418 N.J. Super. 79, 12 A. 3rd 223...
Apr 23, 2012
A-112-10 Wade Stancil v. ACE USA (067640). 3. The Exclusivity Rule: Under the circumstances of this case, which include a finding by the federal Occupational Safety and Health Administration that the accident was the result ...