On August 2, 1999, the New Jersey Supreme Court handed down a stunning decision which will affect the entire workers' compensation community in this state. In Kibble v. Weeks Dredging & Construction Co. (A-38-98) the Supreme Court held that a worker who settles his or her claim under Section 20 cannot waive the rights of his or her spouse and dependents without proof that the dependents join in the waiver of such dependency claims. This decision also sets forth requirements that waivers by the spouse and other dependents need to occur on the record as part of the Section 20 proceedings, preceded by a full explanation of the effect of the Section 20 on the rights of the dependents.

It is important to understand the facts of the case to appreciate the outcome at the Supreme Court level. Carl Kibble worked for numerous employers from the mid-1950s as a welder with exposure to chromium, nickel, and fumes. The last employer with exposure was Weeks Dredging & Construction Co from September 1980 until March 1984. He had a chest x-ray in 1977 which showed a pneumoconiosis, which is a lung condition caused by retention of dust. In 1984 he saw his family doctor who diagnosed a chronic cough and pulmonary fibrosis caused by exposure to welding fumes. The family doctor diagnosed him with welder's lung and concluded that he was totally and permanently disabled. In January 1989 Mr. Kibble settled his compensation claim under Section 20 for $36,000. The settlement was placed on the record. The preprinted Section 20 form was utilized in court. The form states that the settlement is a dismissal with prejudice, "being final as to all right(s) and benefits of the petitioner and the petitioner's dependents and is a complete and absolute surrender and release of all their rights arising out of this/these claim(s)."

Mr. Kibble and his wife had filed suit in federal court alleging products liability and failure to provide a safe workplace. That case settled prior to the Section 20 settlement, and the release in that case waived any and all claims for injury including any other illness or injury not yet diagnosed, past, present, or future as well as all claims for wrongful death caused by any occupational disease, not yet diagnosed, past, present, or future.

In November 1993 Mr. Kibble was diagnosed with lung cancer and died on March 5, 1994. The cause of death was noted to be lung cancer and pneumoconiosis. In April 1994 petitioner, Mrs. Kibble filed a dependency claim alleging that her husband's lung cancer and death were caused by his occupational exposure to welding fumes. The compensation judge and the appellate division held that petitioner's claims were barred, but the Supreme Court reversed for the reasons stated above.

What is the immediate effect of Kibble? Does this mean that carriers now will face a flood of claims to undo prior Section 20 settlements? The answer is no to this inquiry because the Supreme Court said that it will only apply this ruling prospectively, noting that this is a new rule of law. It stated that for a holding to constitute a new rule of law there must be a sudden and unanticipated change of a longstanding practice. Since this rule dramatically changes the past practice in the division, it will not be retroactive. However, Mrs. Kibble did obtain the benefit of the new ruling since she championed the cause.

Does this ruling consider the potential double benefit to the claimant/dependent? The Supreme Court did comment on the fact that if Mrs. Kibble had recovered money in a wrongful death civil action, and if she now received dependency benefits on remand to the division, there would be a lien in favor of the respondent. Unfortunately, she already waived any wrongful death rights in the civil settlement. Thus, if she now receives dependency benefits there will be no lien rights in favor of the respondent. Clients should remember that payments to the worker can be liened in a civil recovery by the worker; but dependency benefits can only be liened to the extend that there are civil recovery by the worker; but dependency benefits can only be liened to the extent that there are civil payments to the dependent. Those payments typically arise out of a wrongful death action. Dependency benefit payments cannot be liened against the lifetime payments to the worker.

How is the division going to deal with this decision? The Supreme Court has directed the division to come up with procedures to make sure that when a Section 20 is being put through there is a knowing, intelligent, and voluntary waiver by a spouse or other dependents of dependency rights. The Director of the Division has already prepared and disseminated a new form required on all Section 20 settlements. That second page addition on Section 20 settlements is available in our office.