Stancil v. ACE USA, A-112 September Term 2010; Supreme Court; opinion by Hoens, J.; dissent by Albin, J.; decided August 1, 2012. On certification to the Appellate Division, 418 N.J. Super. 79 (App. Div. 2011). [Sat below: Judges Lisa, Sabatino and Alvarez in the Appellate Division; Judge Waldman in the Law Division.] DDS No. 39-1-7238 [40 pp.]

Plaintiff Wade Stancil suffered a work-related injury and received workers’ compensation benefits from his employer’s compensation carrier, defendant ACE USA. In 2006, he was determined to be totally disabled.

In 2007, plaintiff filed a motion in the compensation court seeking to compel defendant to pay outstanding bills for medical, prescription and transportation services. The court ordered defendant to pay the bills, warned against any further failure to pay, and awarded plaintiff a $2,000 counsel fee.

In October, plaintiff returned to court. It found that defendant’s continued failure to make payment was a willful and intentional violation of its prior order, issued a further order to compel payment, and awarded plaintiff an additional counsel fee. It also suggested that plaintiff seek further relief in Superior Court.

In 2008, plaintiff underwent additional surgery and psychiatric treatment that his physician attributed to an earlier delay in treatment because of the carrier’s delay in making payment to providers.

In April 2009, plaintiff filed this matter contending that defendant’s failure to authorize needed treatment had caused him to sustain unnecessary and additional pain and suffering. Asserting that defendant had either failed to act in good faith or had acted in bad faith, the complaint demanded compensatory and punitive damages.

The trial court granted defendant’s motion to dismiss, finding that the Workers’ Compensation Act, N.J.S.A. 34:15-1 to -142, is the exclusive remedy for the claims asserted. The Appellate Division affirmed.

Certification was granted limited to 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.

Held: A worker who is entitled to receive workers’ compensation benefits does not have a common-law cause of action against his employer’s compensation carrier for pain and suffering that results from the carrier’s delay in payment for medical treatment, prescriptions, or related services.

The court observes that the act is a tradeoff under which employees who suffer work-related injuries relinquish their right to pursue common-law remedies in exchange for swift, automatic entitlement to certain, but reduced, benefits. Although there are exceptions to the act’s exclusivity provision, N.J.S.A. 34:15-8, they have been narrowly defined and carefully tailored to adhere to the Legislature’s clear preference for resolution of work-related injuries in the compensation courts.

However, the system has been criticized. At the time the orders on which plaintiff based his complaint were entered, criticism had been directed to a perceived lack of effective enforcement power. The Legislature responded. It chose to combat the problem of carrier recalcitrance by authorizing courts of compensation to make contempt findings. That authority is now codified in N.J.S.A. 34:15-28.2. In so doing, it made clear its intention to replace the regulation’s earlier option of referral to other tribunals, including a referral to the Superior Court for a civil proceeding.

The court notes that 34:15-28.2 also contains addition enforcement mechanisms, including the imposition of costs, interest and an additional 25 percent assessment for unreasonable delay, closing proofs, suppressing defenses, and excluding evidence or witnesses. Although those added enforcement tools include a grant of authority to the compensation court to “take other action,” the court says the Legislature did not intend that general language to be an invitation for the new cause of action urged by plaintiff. Rather, the evolution of the bill that created the contempt remedy suggests that the Legislature identified, and enacted, the precise remedy for the problem of the recalcitrant carrier that it deemed appropriate.

Therefore, the court rejects plaintiff’s request that it find a common-law right of action against the carrier, for three reasons. First, the workers’ compensation system has been intentionally designed to provide injured workers with a remedy for their injuries outside of the ordinary tort or contract remedies cognizable in the superior courts. Second, the Legislature explicitly rejected the broad authorization to pursue a remedy in the Superior Court and there is no basis on which to substitute a different remedy for the one that it has chosen. Third, plaintiff’s proposed remedy would threaten to obliterate the Legislature’s carefully crafted system of workers’ compensation and would soon become every injured employee’s preferred manner of securing relief in circumstances in which the remedies found in the act are both adequate and entirely appropriate.

Justice Albin, in dissent, says nothing in the act suggests that the Legislature intended to shelter a carrier that not only breaches its covenant of good faith and fair dealing with a worker but also inflicts on him a new injury outside of the workplace. He says 34:15-28.2 places no limitation on the filing of a common-law action against a carrier that causes a disabled worker either a new injury or the aggravation of an old injury outside of the workplace.

Chief Justice Rabner, Justice LaVecchia and Judge Wefing, temporarily assigned, join in Justice Hoens‘ opinion. Justice Albin dissents. Justice Patterson did not participate.

For appellant — Steven L. Kessel (Drazin & Warshaw). For respondent — Frances Wang Deveney (Marks, O’Neill, O’Brien & Courtney; Wang Deveney and Melissa J. Brown on the brief). For amici curiae: American Insurance Association — Richard J. Williams Jr. (McElroy, Deutsch, Mulvaney & Carpenter; Williams and Michael J. Marone of counsel; Williams and Katherine E. Howard on the brief); New Jersey Association for Justice — Alan T. Friedman (Bagolie-Friedman).