Whitfield v. Bonanno Real Estate Group, A-2830-09T1; Appellate Division; opinion by Messano, J.A.D.; decided and approved for publication May 12, 2011. Before Judges Carchman, Messano and Waugh. On appeal from the Law Division, Bergen County, L-1604-07. [Sat below: Judge Polifroni.] DDS No. 39-2-2118 [31 pp.]

Plaintiff, an employee of Time Warner Entertainment Co., L.P. (Time Warner), was injured at work and received workers’ compensation benefits from her employer. She instituted a third-party negligence action against a number of parties, including the lessee of the premises TWF, a general partnership in which her employer was a partner. The partnership sought summary judgment, arguing that the immunity provided by N.J.S.A. 34:15-8 applied. It contended that because the partnership shared liability for the actions of its agents, i.e., the individual partners, it was entitled to share in the immunities provided to those partners.

This appeal involves a question of first impression in New Jersey. Specifically, may plaintiff pursue a third-party action in negligence against a general partnership after receiving workers’ compensation benefits from her employer, a partner in that partnership?

Held: The immunity provided by N.J.S.A. 34:15-8 does not bar plaintiff’s third-party action in negligence against a general partnership after receiving workers’ compensation benefits from her employer, a partner in that partnership.

At issue in this case is the interplay between the Workers’ Compensation Act and the Revised Uniform Partnership Act (the RUPA), enacted in New Jersey in 2000, and case law decided under its statutory predecessor, the Uniform Partnership Act (the UPA). Significantly for the purposes of this case, the RUPA provides that “[a] partnership is an entity distinct from its partners,” and may be sued separately from its partners in the same action. The UPA contained no similar provisions. The UPA modified the common law, which “did not recognize the separate existence of partnerships,” but rather viewed the partnership as simply an aggregate of its individual partners. Under the aggregate theory of partnership, a general partnership was an aggregation of individuals. Therefore, it was considered to be a relationship between individuals engaged in business as co-owners who jointly owned property and who were jointly liable for partnership debts or obligations. Over time, the aggregate theory proved to be unworkable. As a result, the RUPA adopted the entity theory of partnership. Under this concept, the partnership is viewed as “a legal person [entirely] separate from its partners” with the power to sue and be sued in its own name.

Here, TWF’s argument is that it is entitled to the immunity bestowed on Time Warner by N.J.S.A. 34:15-8 “because … partners share each others’ and the partnership’s liabilities, [and] the partners also share each others’ and the partnership’s immunities … from suit.” In the end, this case devolves to consideration of two issues: (1) the nature of the relationship between a general partner and its partnership; and (2) the public policies fostered by the WCA, both through the immunity provided by N.J.S.A. 34:15-8, and the reserved right of an injured worker to commence a common-law suit against a third person, N.J.S.A. 34:15-40.

Absent out-of-state cases from New Hampshire, Nevada and New York, TWF offers no precedent to support the proposition that a statutory immunity granted to one partner necessarily flows to the general partnership. In fact, in other contexts, New Jersey courts have held to the contrary.

In this case, the appellate panel finds the immunity accorded to Time Warner under the Workers’ Compensation Act does not, as a matter of general partnership jurisprudence, flow to TWF so as to immunize the partnership from plaintiff’s common-law negligence claims. The partnership was a separate entity, a third party, under the Workers’ Compensation Act. Further, the RUPA reflected an evolution in the legal theory of partnerships, rejecting the common-law notion of a partnership being an aggregate of its partners, and adopting the entity theory. Pursuant to the express language of both statutes, and the policy goals of the Workers’ Compensation Act, the partnership was not entitled to the immunity from plaintiff’s common-law negligence claim provided by N.J.S.A. 34:15-8 to its partner, the employer of plaintiff.

The motion judge properly denied summary judgment to defendant.

— By Debra McLoughlin

For appellant — Charles Dewey Cole Jr. (Newman Myers Kreines Gross Harris). For respondent — George B. Wolfe.