PAOLO MARANO VS. CLIFFORD J. SCHOB, M.D., ET AL. (L-6604-12, ESSEX COUNTY AND STAEWIDE) (A-3915-16T2)
In Pool v. Morristown Memorial Hospital, 400 N.J. Super. 572, 577 (App. Div. 2008), this court ruled that a worker's compensation lien under N.J.S.A. 34:15-40 attached to funds that an injured plaintiff received from a defendant physician in a medical malpractice case pursuant to the terms of a "high/low" agreement. Pool held that the money paid to plaintiff as the negotiated "low" figure in accordance with the agreement was subject to the statutory lien, even though a jury had rendered a "no cause" verdict in favor of the physician and absolved him of liability. Id. at 575-77.
Similarly, in the present case, despite a "no cause" decision, an injured plaintiff recovered the "low" amount under a high/low agreement he entered into with defendants who provided medical treatment to him after a work-related accident. Relying upon Pool, his employer's workers' compensation carrier seeks to enforce its lien for compensation benefits it paid to plaintiff. Plaintiff argues that N.J.A.C. 11:1-7.3(a)(1), a regulation adopted by the Department of Banking and Insurance exempting certain payments made under a high/low agreement from physician reporting requirements, alters the analysis in Pool. Plaintiff claims the regulation renders the compensation lien unenforceable in this setting. In essence, plaintiff desires a lien-free "low."
The panel rejects plaintiff's novel argument. It concurs with the trial court that the regulation does not affect the validity and enforceability of the carrier's Section 40 lien, and that the lien applies to the proceeds collected by plaintiff from the medical malpractice defendants. A contrary result would allow plaintiff to retain an inappropriate double recovery.
