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Monday, April 15, 2019

Payment under section 20 invokes the exclusivity bar even if the employer is uninsured

A lump sum payment under Section 20 of the New Jersey Workers’ Compensation law is deemed to be an employee’s complete surrender of rights and therefore it is the exclusive remedy and bars a negligence action.

The facts are that a gas station employee was fatally shot and robbed in his employment. The spouse filed a dependency claim before the New Jersey Workers’ Compensation Division and resolved the administrative law matter with an initial payment of $50,000 followed by $5,000 monthly payments for 24 months.

Upon satisfactory completion of the payments the Judge of Compensation entered an award under NJSA 34:15-20. Dependency rights were reserved under NJSA 34:15-13 in the final consent order and approval of court of compensation.

The employer was uninsured at the time of the accident. Its Workers Compensation insurance had lapsed. Payments under the workers’ compensation award were made directly by the employer.

Three years before the settlement entered by the Judge of Compensation the representative of the estate and the name spouse filed a civil action against the employer and the named owners for negligence.

The trial court dismissed the negligence case regretting the defendants motion for summary judgment based upon the payment workers’ compensation for $150,000. The trial court deemed the payment as a full and final settlement of the claim and held that the payment barred the civil action under the exclusivity provisions of the New Jersey Workers’ Compensation Act. NJSA 34:15-8.

New Jersey Court of appeals affirmed the trial court ruling for dismissal of the civil action holding that, “....the failure to maintain insurance did not alter the effect of the Workers’ Compensation bar, especially since plaintiff took advantage of the Act’s statutory scheme to obtain benefits under the Section 20 settlement.”

Kaur v. Garden State Fuels, Inc., Docket No. A-2315-17T1, 2019 WL1579705, decided April 12, 2019.
This opinion shall not “constitute precedent or be binding upon any court.” Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3. Superior Court of New Jersey, Appellate Division.

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Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters). For over 4 decades the Law Offices of Jon L Gelman 1.973.696.7900 has been representing injured workers and their families who have suffered occupational accidents and illnesses.