Counsel Fees in Dependent Spouse Claims May Be Based On The Life Expectancy Of The Dependent Spouse, Not 450 Weeks


In an important reported decision, and one of first impression at the Appellate level, the Court in Collas v. Raritan River Garage, A-3103-17T4, (App. Div. July 19, 2019), held that the Judge of Compensation was correct in basing the counsel fee of petitioner on petitioner’s life expectancy, not limited to 450 weeks, as has been the practice in the New Jersey Division.

For many decades, judges of compensation have awarded counsel fees in dependency cases on a 450-week period, even though dependent spouses receive benefits until their death, unless they should remarry. Counsel in Collas argued that basing the fee on the life expectancy of the dependent spouse makes more sense. The Judge of Compensation reviewed two places in the statute where 450 weeks is referenced. First N.J.S.A. 34:15-12(b) provides in total disability claims that compensation shall be for a period of 450 weeks, at which time compensation payments shall cease unless the employee shall have submitted to such physical or educational rehabilitation as may have been ordered by the rehabilitation commission, and can show that because of such disability it is impossible for the employee to obtain wages or earnings equal to those earned at the time of the accident.”  Otherwise the statute makes clear that total disability benefits continue beyond 450 weeks.

The other statute that discusses 450 weeks appears in N.J.S.A. 34:15-13 pertaining to dependency claims. That section states that “This compensation shall be paid, in the case of the surviving spouse, during the entire period of survivorship or until such surviving spouse shall remarry and, in the case of other dependents, during 450 weeks. . .   If a surviving spouse remarries before the total compensation is paid, he or she is entitled to a payment of 100 times the amount of the weekly compensation immediately preceding the remarriage, whichever is lesser. The statute makes clear that a dependent child may receive dependency benefits throughout attendance at a full-time college or university but no later than age 23. The so-called marriage penalty does not apply to the surviving spouse of a deceased member of the state police or member of a fire or police department or force who died in the line of duty.

Raritan River Garage argued that it has always been the accepted practice in the Division to base the counsel fee of the prevailing dependent on a 450-week period. Further, Garage argued that it is speculation to pay a counsel fee on an amount of years beyond 450 weeks because the spouse may remarry or die. The Judge of Compensation disagreed and asked the following rhetorical question: “Is a previously legislatively mandated 450-week period less speculative in terms of calculating [Collas’] true award than the life expectancy tables published in the court rules?”

The Appellate Division agreed that using life expectancy tables is no more speculative than using a 450-week period. The Court also observed that there is no link in Section 13 governing dependency awards to the section of the statute governing counsel fees in N.J.S.A. 34:15-64. That section authorizes the Judge of Compensation to award a counsel fee to a successful petitioner’s attorney “not exceeding twenty percent of the judgment.”

The Appellate Division also noted that the 450-week period does not distinguish whether a surviving spouse is 20 years old or 60 years old. In this case, Ms. Collas had a life expectancy of 12.7 years.  The Court did not hold that the life expectancy calculation must always be used. “We determine only that the use of the table method was a reasonable option utilized by the judge. We recognize that using the table method will, in many cases, increase the potential size of a fee award. We thus caution against a reflexive application of a twenty-percent award without full analysis.”

Attorney Rick Rubenstein, who argued this case successfulyl in the Appellate Division, was interviewed following this decision. He addressed two issues that many practitioners are now considering in light of the Collas decision. One is whether acceleration of one-third payments when there is a very large third party recovery in a dependency case should also be based on the life expectancy of the dependent spouse. Mr. Rubenstein said that he believes that the logic of Collas would extend to this situation. He noted that payments of one third to a dependent where there is a large third party recovery are not technically payments of compensation but rather contribution to counsel fees.If the counsel fee to a dependent spouse is based on the life expectancy of the dependent, the argument would be that the return of the counsel fee to the dependent spouse would be analyzed in the same manner.

The other issue which Mr. Rubenstein addressed is whether the rule in Collas may be applied by future courts to total disability claims. He said it is possible but less likely than the decision in Collas.“Courts will likely see a distinction between the marriage penalty in Section 13, and the re-employment offset in Section 12, both on practical grounds and public policy grounds. There is no public policy promoting remarriage, or marriage, for that matter. There IS a public policy favoring rehabilitation and re-employment. That public policy is reflected in the base period of 450 weeks absent from the dependency statute, and also reflected in the “contingent” nature of 12(b) benefits. 12(b) is contingent upon no active income, qualification upon examination, and lack of rehabilitation which is an ‘aim’ of the Act.”                 

This decision is certainly a significant one for practitioners and will require employers, carriers and third party administrators to amend the traditional calculation of reserves for counsel fees in dependency cases.

By John H. Geaney

Courtesy of New Jersey Workers Compensation Blog

Read More

Request a Demo

To request a free demo of one of our products, please fill in this form. Our sales team will get back to you shortly.