State News

What if the conduct of an employee during the course of employment is found to so reckless as to be potentially criminal? Does that permit an injured co-employee to sue his or her fellow employee in civil court for intentional harm?  That was the issue addressed in Morales v. Christopher S. Schneider, A-0862-12T4 (App. Div. December 16, 2013).

Luciano Morales was injured on December 31, 2009 in the course of his employment.  He was a passenger in a vehicle driven by Christopher Schneider, who was driving a construction truck southbound on Rivervale Road in River Vale, N.J.  It was snowing at the time, and both men were on their way to the company’s place of business to meet other contractors in order to perform snowplowing services for clients.

While driving the truck, Schneider crossed the double yellow line and entered the northbound lane on Rivervale Road, which was a two lane road.  He drove for more than a full block in the northbound lane.  A truck travelling lawfully in the southbound lane began to make a left turn onto a local side street. Schneider veered left to avoid that vehicle, lost control of his truck, left the roadway and hit a utility pole and tree.  Morales was seriously injured in the accident and received workers’ compensation benefits.

Schneider was given motor vehicle summonses for reckless driving, failing to keep right, improper passing, and he was also charged by the Bergen County Prosecutor with fourth-degree assault by auto for “causing serious bodily injury to . . . Morales by recklessly driving.”  Schneider was admitted into the pre-trial intervention program and pled guilty to the motor vehicle summons for reckless driving.

Morales brought a civil suit against Schneider, who contended that the suit should be barred by the exclusive remedy provision in the New Jersey Workers’ Compensation Act. Morales countered that a co-employee should not be protected where the conduct is “outrageous and egregious.”

The trial judge dismissed Morales’s law suit, and the Appellate Division affirmed.  It relied on an important decision by the New Jersey Supreme Court in 2012 entitledVan Dunk v. Reckson Associates Realty Corp., 210 N.J. 449 (2012).  The court said, “Most recently, inVan Dunk, the Court held that the Act’s exclusivity bar applied where the workplace accident produced an OSHA violation for a ‘willful’ violation of OSHA safety rules.”

Thus, in addition to violations of safety regulations or failure to follow good safety practice, an intentional wrong must be accompanied by something more, typically deception, affirmative acts that defeat safety devices, or a willful failure to remedy past violations.

The court concluded, “While it might be said that Schneider ignored various safety precautions and statutory provisions, and in doing so created a greater risk of injury to plaintiff -- conduct that clearly cannot be condoned -- we are convinced it does not amount to an intentional wrong that allows plaintiff to avoid the workers’ compensation bar.

            The case shows that the high standard in New Jersey for screening intentional harm law suits applies to both suits against employers and co-employees, even where the co-employee acts in a fashion that could subject him to criminal negligence charges.

          Saul Liebman was living alone after the recent death of his wife in September 2008.  At the time he was 81 years old.  His daughter made inquiries to find someone who could move into her father’s home and take care of him, including cooking meals and assisting in daily activities. Myroslava Kotsovska, a 59-year-old Ukrainian woman, was referred to Liebman.  She had performed similar services to a New Jersey family in the past.

            Kotsovska met with Liebman and the parties agreed that she would move in and work seven days a week for $100 per day in cash doing laundry, cooking, light housekeeping, and assisting with general tasks.  There was no formal discussion of her employment status, specifically whether she would be considered an independent contractor.  The working arrangement began on October 21, 2008. 

            On December 8, 2008, Liebman and Kotsovska ran some errands and stopped at the Millburn Diner for lunch. Kotsovska exited the car and stood on the sidewalk while Liebman pulled into the parking space in front of her.  Liebman then accidentally pressed the accelerator and the car drove over the parking block and onto the sidewalk, crashing into Kotsovska, and pinning her against a low wall.  The car severed her leg below the knee, leading to her death within an hour.

            The estate of Kotsovska filed a wrongful death action against Liebman in Superior Court.  Liebman answered and contended that the exclusive jurisdiction was in the Division of Workers’ Compensation since Kotsovska was his employee.  The Estate argued that the decedent was an independent contractor.  The homeowner’s carrier acknowledged the existence of workers’ compensation coverage and notice of the claim and agreed that the accident arose from the decedent’s employment.  It also agreed not to raise a statute of limitations defense although no workers’ compensation claim had been timely filed. 

            The trial judge refused to send the case to the Division of Workers’ Compensation, and a jury determined that the decedent was an independent contractor, awarding the estate $300,000 for decedent’s pain and suffering and $225,000 for her wrongful death.  Liebman appealed and the Appellate Division reversed in a published decision atEstate of Myroslava Kotsovska v. Saul Liebman, A-5512-11T4, (App. Div. December 26, 2013).   The court held, “We conclude that this matter should have been transferred to the Division (Workers’ Compensation) for determination of decedent’s employment status.  The Court in Kristiansen held that, although the Superior Court and the Division have concurrent jurisdiction to decide an exclusivity defense, primary jurisdiction is in the Division where, as here, ‘no issue has been raised that the Division cannot decide in a manner that is binding on all the interested parties.’” (citingKristiansen v. Morgan, 153 N.J. 298 (1998) modified on other grounds, 158N.J. 681 (1999).

             The Appellate Division made clear that the Division of Workers’ Compensation hasprimary jurisdiction, not merely concurrent jurisdiction.  It said that the Division of Workers’ Compensation is the best forum to decide employment issues and compensability issues.  The court said,“Accordingly, we hold that because Liebman’s exclusivity defense turned on whether decedent was his employee or an independent contractor, an issue over which the Division could enter a binding judgment, and one which the Division was best suited ‘by virtue of its statutory status, administrative competence and regulatory expertise to adjudicate,’. . . (citations omitted) the trial court should have transferred the case to the Division.”

            The next question the court focused on was whether it should reverse the finding of liability on the part of Liebman or allow the jury verdict to stand given that the Superior Court was acknowledged to have concurrent jurisdiction.   In this case, the court found that the instructions to the jury on the factors that determine employee status were vague and insufficient.  The court reversed the judgment on liability only and remanded the matter to the Division of Workers’ Compensation to determine whether the decedent was Liebman’s employee or performed services for him as an independent contractor.  If the Division of Workers’ Compensation should find Kotsovska to be an employee, the verdict would be thrown out completely.

            Practitioners should study this case.  First, it is a published decision and will be cited by other courts.  Secondly, it is really the first reported decision in New Jersey to emphasize that not only does the Division of Workers’ Compensation have concurrent jurisdiction with the Superior Court in matters of compensability and employment, but it hasprimary jurisdiction. 

Supreme Court of South Dakota

Schuelke vs. Belle Fourche Irrigation District and First Dakota Indemnity Company

Mike Simpson/Charles A. Larson

Issue: Whether the cumulative trauma doctrine prevents the application of the three year statute of limitation under SDCL-62-7-35.1.

Claimant started working for Employer in 1988 as a laborer and heavy equipment operator. Claimant’s main job was to dig trenches using an excavator or track hoe. He suffered a cumulative trauma injury in 2000 to his hands/wrists, treated and was released in 2004. The last payment of benefits was August 4, 2004, but Claimant continued to have problems. He decided to "tough it out" and not treat until 2009. Once he resumed treating, the claim was denied as there had been more than three years since the last payment of benefits.

After the denial, Claimant continued to seek medical attention and even underwent another surgery on May 25, 2010. Claimant’s treating physicians wrote to Insurer and stated that Claimant’s current care was related to his original claim. Additionally, Claimant’s doctors noted that his symptoms had accumulated over several years and were consistent with repetitive use injuries.

Claimant argued SDCL 62-7-35.1 (the three year limitations statute) did not apply to cumulative trauma injuries. The SD Supreme Court rejected Claimant’s argument and held that the three year limitations period applies to all injuries, including cumulative trauma injuries.

Waterman vs. Morningside Manor and MHA Insurance Company

Jolene R. Nasser and Dean Nasser/Charles A. Larson

Issue: Whether an amended petition related back to the original petition for purposes of determining the proper statute of limitations.

The department granted summary judgment finding that the Claimant’s claim was barred. This was purely a procedural issue. Without boring you with the details, the SD Supreme Court reversed the grant of summary judgment and held Claimant could proceed with her claim. The important thing to take away from this case is that the SD Supreme Court went out of its way to allow Claimant’s case to go forward. The Court ignored case law in South Dakota and made its ruling based, in part, on federal case law. This is another example of the Court issuing a results oriented ruling. This case is so fact specific that it will not have much impact on future cases.

Smith vs. Stan Houston Equipment Company and United Fire and Casualty Company

Mike Simpson/Michael S. McKnight

Issue: Whether the Claimant’s employment was a major contributing cause of his current condition and need for treatment.

Claimant, aged 53, worked for Employer for over ten years as a diesel mechanic. Claimant’s job required heavy lifting and regular twisting. He currently suffered from neck, shoulder and back pain. Employer denied the claim based on causation.

Claimant has a history of injuries. In November of 2008, Claimant had three incidents which he later claimed caused neck, back, shoulder, and arm pain. Claimant did not report any of these incidents to Work Comp and decided to work through the pain. However, the pain became too much and Claimant sought the help of a chiropractor. On the intake paperwork, Claimant marked that his pain was from an old injury and chronic in nature. Claimant listed the injury as a 1981 whiplash incident. Claimant did not tell the chiropractor, his orthopedic surgeon, physical therapist, or other doctors about the 2008 incidents until after treating for about 5 months.

In August 2010, Claimant petitioned the Department of Labor for a hearing. Claimant testified that he did not tell his various medical providers about the November 2008 incidence because he was submitting his claims to his health insurance carrier and he was concerned with getting treatment and getting back to work. The IME doctor testified that he believed Claimant was not injured when he hit his head in November 2008 because Claimant did not mention the incident to his treating physicians and because Claimant told the chiropractor he had chronic pain.

Claimant’s treating physicians noted that they learned of the November 2008 injury from Claimant’s attorney rather than Claimant but opined that the injuries were related to his work activities. Claimant’s treating physician noted that sustaining a hit to the top of the head hard enough to knock Claimant to the ground certainly caused damage to Claimant’s neck and herniated a disc in the cervical spine.

The Department issued a decision and found Claimant credible and accepted that the November 2008 incidence occurred. However, the Department determined that Claimant’s employment was not a major contributing cause of the current condition and need for treatment because it rejected Claimant’s treating physician’s opinion due to the fact that the treating physician’s opinion was based on mere assumptions and not facts directly related from Claimant to the physician. The Circuit Court affirmed the Department with a slight modification in the language of the Order.

The SD Supreme Court found that the Department’s findings of fact did not support the conclusions of law that Claimant failed to prove causation by a preponderance of the evidence. The Court noted that the Department found the Claimant credible and accepted the November 2008 incidents occurred. The Department also found that Claimant reported to multiple medical providers about the specific pain that he was experiencing. Finally the Department found that the experts all agreed that Claimant’s 2008 injuries could be a major contributing cause of Claimant’s current condition. The Court noted that it was therefore illogical that Claimant failed to establish causation. Additionally, the Court noted that Claimant’s treating physician’s opinion did contain the adequate foundation as Claimant’s treating physician had knowledge of the 2008 incidents before he offered his opinion on causation (here is that treater bias again).

South Dakota Department of Labor

Whittecar v. Metrix, LLC and Reliamax Insurance

Michael M. Hickey/J.G. Schultz

Issue: Whether Claimant’s employment was a major contributing cause of Claimant’s condition.

Claimant worked for Employer in the fall of 2006 doing sandblasting and powder coating on equipment surfaces. On March 7, 2007, Claimant was injured while working for Employer when a truck body was dropped on him. Claimant continued working the remainder of his shift and then went to the emergency room. The x-rays were negative and Claimant was discharged. Claimant treated with various doctors in 2007 for back, neck, and shoulder pain. Claimant was given work restrictions and returned to work within those restrictions until he was terminated in May of 2007 for reasons unrelated to the injury.

Claimant was involved in a motorcycle accident after his work injury in June of 2007. Claimant was thrown from his motorcycle and rendered unconscious. He was treated at the local emergency room and released as there were no broken bones. Following the motorcycle incident, Claimant went through an IME wherein the IME doctor determined that the Claimant’s allegations of pain were subjective without organic findings and opined that the March 7, 2007 work injury was not a major contributing cause of the ongoing problems. Additionally, Claimant was unable to obtain medical opinions as to causation from his treating physicians. Accordingly, Employer moved for summary judgment based on Claimant’s lack of medical causation opinions.

In response to Employer’s motion, Claimant submitted three identical written reports prepared by Claimant’s counsel and signed by Claimant’s treating doctors (which is becoming more common). The Department determined that the Claimant’s propounded reports were entitled to little or no weight as they were not precise and well supported by the evidence. The reports did not comment about Claimant’s current conditions nor the motorcycle accident that Claimant was involved in. To the contrary, the IME doctor’s written report discussed the history of pain, the motorcycle accident, and the lack of diagnostic findings to support Claimant’s allegations. The Department granted Employer’s motion for Summary Judgment and Claimant was entitled to no benefits.

Terveen vs. SD DOT and South Dakota Worker’s Compensation Fund

ALJ: Taya Runyan

Issue: Whether Claimant sustained an injury arising out of and in the course of his employment.

Claimant was employed by the South Dakota Department of Transportation at the Belle Fourche, South Dakota location as a Journey Transportation Technician. Claimant’s job mandated that he be on the road on a daily basis during the summer and approximately 70% of the time in the winter. On November 14, 2011, Claimant left Belle Fourche on a work-related trip to Yankton, South Dakota. Two days later, he was returning to Belle Fourche and was seriously injured in a single vehicle accident.

It was later learned that Claimant was injured when he deviated from his employment to do a job for another employer. Claimant argued that his deviation from the main road of travel was minimal and expected and/or condoned by the Employer. On the other hand, Employer argued that Claimant was engaged in a non work-related side trip when he was injured.

The Judge rejected Employer’s arguments and found the primary purpose of Claimant’s trip was for Employer-related business and the slight detour for the other employer did not automatically relieve Employer of liability for the injury. While there was a deviation in employment, the Judge found the deviation was not "substantial" as the personal detour was only a few miles off of the Claimant’s route home and was only going to take a little bit.

Voorhees vs. Raven Industries Inc. and Dakota Truck Underwriters

Russ Janklow/Michael S. McKnight (ALJ Duenwald)

Issue: Whether Claimant’s employment was a major contributing cause of the bilateral carpal tunnel syndrome.

Claimant was born in the Philippines and moved to the United States in 1998. Additionally, she was diagnosed with diabetes in 1988. After Claimant moved to the United States, she worked at a nursing home and as a seamstress in Huron, South Dakota. In 2003, she started working for Aerostar, which is a subsidiary of Raven Industries, sewing parachutes. There was a time from 2004 to 2005 that she was unemployed but returned to Aerostar in 2005. Between the years of 2007 and 2009, Claimant typically worked 10 hours per day and 5 or 6 days per week. Claimant’s job consisted of fine finger and hand movements of slight pinching, and gripping. She would also move her hands over the fabric, pushing the fabric through the machine. Claimant also worked as an inspector, which would entail pinching the fabric seam and pulling it through her pinched fingers in order to test the product.

In 2009, after Claimant started to work as an inspector, Claimant noticed that her hands became numb. She filed an incident report in April for numbness in her hands. Claimant met with Employer’s plant ergonomist, who recommended she wear gloves to alleviate the wrist pain and numbness. Claimant admitted that when she wore the gloves, she did not experience much pain. However, when the gloves were removed, Claimant’s hands would hurt. Claimant was also taught some ergonomic stretches for her hands and wrists and used over-the-counter pain reliever to alleviate the pain. Unfortunately, Claimant’s hand pain increased over time.

On November 3, 2011, Claimant filed another incident report with Employer and Insurer regarding the pain in her hands. Claimant immediately began treating the pain and was diagnosed with carpal tunnel syndrome, and had carpal tunnel release.

Employer offered the testimony of an occupational therapist and certified ergonomic evaluation specialist, who stated that the pain Claimant was experiencing was not related to work and instead related to non-occupational risk factors like gender, age, and diabetes. The ergonomic specialist also testified that Claimant’s work activities would not cause carpal tunnel syndrome.

Employer also submitted the testimony of two separate orthopedic surgeons that opined that Claimant did have carpal tunnel syndrome but that her diagnosis was not related to work and instead related to her gender, age, and diabetes. The IME doctors opined that there is scientific evidence that repetitive activities are not causally related to carpal tunnel syndrome.

The Department ruled that the work activities were a major contributing cause of Claimant’s carpal tunnel syndrome. The Department rejected the ergonomic specialist’s opinion because he did not observe the Claimant doing every job that she had prior to filing the First Report of Injury. Additionally, the Department held that the ergonomic specialist did not obtain accurate facts in determining his opinion and the opinion lacked foundation.

The Department rejected the IME doctors’ opinions due to the fact that they gave much reliance to the ergonomic specialist’s opinion. Basically, the Department held that since the ergonomic specialist lacked foundation, so did the IME doctors. The Department accepted the treating physician’s opinion that the work activities were a major contributing cause of the carpal tunnel syndrome. This case shows the huge bias given to treating doctors’ opinions.

Sorenson vs. Harbor Bar LLC and Midwest Family Mutual Insurance Company

Kit McCahren/Steve Morgans (ALJ Hageman)

Issues: 1. Whether Claimant’s work related injury was a major contributing cause of her intracranial hemorrhage; and 2. Whether Claimant is permanently and totally disabled as a result of the work related injury.

Claimant and her brother lived in Watertown with her adoptive parents. Claimant initially had some difficulties common with foster children but eventually became a relatively stable and intelligent young woman. After graduating from high school, Claimant lived on her own and looked after her own finances. She worked several waitressing positions at that time and was capable of working a full time job. One of her positions was at the Harbor Bar in Watertown.

Claimant was working at Harbor Bar on December 31, 2009, when a fight broke out among the patrons shortly before midnight. Claimant attempted to break up the fight and eventually became involved in the fight. During the fight, Claimant was struck numerous times by a patron. After the fight ended, Claimant continued her shift but was noted to have black eyes and complained of a bad headache. It was also thought that Claimant had broken her nose during the fight.

On January 7, 2010, Claimant sought medical treatment at a local hospital. An MRI of Claimant’s head revealed a hemorrhage in Claimant’s brain. Claimant was transported to Sioux Falls where she underwent brain surgery on January 8, 2010. Ultimately, Claimant underwent three brain surgeries to alleviate the hemorrhage.

During Claimant’s hospitalization, she was diagnosed with Moya Moya disease, which is a vascular disease of the brain. The neurosurgeon testified that the condition was either congenital or developed in early childhood. Moya Moya disease is a situation where a network of new, small and less stable vessels grow in the brain and are prone to bleeding and puts the person at risk for a major vascular event.

After Claimant’s brain surgeries, she was evaluated by a licensed psychologist. The psychologist testified that Claimant suffered clear mental deficits particularly in the area of memory and date details. The psychologist noted that Claimant was depressed due to her loss of memory. He also noted that Claimant could not remember what she last ate or when and that she had lost the natural signals to tell us when we are hungry or full. The psychologist concluded that Claimant was totally disabled and that she was not capable of managing her own affairs. Likewise, Claimant’s neurosurgeon testified that her work related injury was a major contributing cause of her brain hemorrhage and need for medical treatment. The neurosurgeon stated that the fact that Claimant was punched was the likely cause of the brain hemorrhage.

Employer and Insurer utilized the testimony of a neurologist, who opined that the fight at the bar was not a major contributing cause of Claimant’s brain hemorrhage. The neurologist stated that the Moya Moya disease was the primary cause of the hemorrhage. The neurologist based the opinion on the fact that Claimant was able to continue her normal activities for a number of days following the fight. The neurologist also stated that the headache Claimant experienced would have been much more severe had it been related to the hemorrhage.

The Department held that Claimant’s work activities were a major contributing cause of her brain injury. The Department noted that it was undisputed Claimant was in a fight on December 31, 2009, and that she received injuries as a result of that fight. Also, the Department accepted the opinion of the treating physician and psychologist. Both doctors stated that the work activities, i.e., the bar fight, were a major contributing cause of the brain hemorrhage. The Department noted that the treating physician’s opinions were well documented by the medical record. Finally, the Department noted that Employer’s neurologist opined that the Moya Moya disease was "the" major contributing cause and did not opine on whether the bar fight could be "a" major contributing cause. Thus, the Employer’s neurologist’s opinion was rejected.

The Department also held that Claimant was permanently and totally disabled. The Department noted that the depression and loss of memory severely reduced Claimant’s functionality and Claimant was unable to take care of her own finances.

Gibson v. Human Services Center, State of South Dakota

Mike Bornitz/Robert Anderson (ALJ Duenwald)

Issue: Whether the April 24, 2010 work injury was a major contributing cause for the Claimant’s need for surgery and current condition.

Claimant was employed as a counselor at the Human Services Center in Yankton, South Dakota. On April 24, 2010, while assisting another counselor to physically restrain a patient, Claimant injured his back. Claimant initially reported that he suffered low back pain that radiated into his lower left side. Claimant treated with a local chiropractor and was off work for two days. The chiropractor utilized conservative treatments and on May 18, 2010, the Claimant reported that he no longer felt symptoms. Claimant was then released without restrictions and placed at MMI.

In July of 2010, Claimant went to his family physician and reported pain in his lower left back and hip that radiated into the lower leg. Claimant told his physician that this was the same pain he experienced in April. Claimant did not report any intervening accidents or injuries that could explain the pain. An MRI was taken and showed that Claimant suffered from disc herniations at L4-5 and L5-S1. Claimant had a discectomy on October 19, 2010, which was successful.

Prior to April of 2010, Claimant reported to his chiropractor that he had fallen down several stairs in his home and landed on his backside. However, an x-ray was taken of that event that did not reveal any issues with the bony structures in the Claimant’s spine. Additionally, the Claimant did not miss any work from that incident and the condition resolved.

Claimant’s treating chiropractor and physicians opined that the April work injury was a major contributing cause of the need for the discectomy. The treating doctors testified and explained that a large part of Claimant’s initial pain was due to inflammation and the other part of the pain is the herniation itself. This explained why Claimant initially thought his work injury had resolved itself but later it was determined that he had a herniated disc.

Employer offered the IME opinion of Dr. John Dowdle that Claimant’s condition and need for surgery was caused by the non-work related injury from the prior incident where he fell down the stairs. Dr. Dowdle stated that the April work injury was not a major contributing cause of Claimant’s back condition and need for surgery.

The Department accepted the opinions of Claimant’s treating physicians as they were corroborated by each other and were based on the record. The Department rejected the IME opinion as Dowdle was not familiar with Claimant’s case and did not have all the medical records.

Wieber vs. Morton Buildings, Inc. and American Zurich Insurance Company

Kit McCahren/Alan Peterson (ALJ Runyan)

Issue: What to include to determine the proper Workers’ Compensation rate.

The Employer and Insurer contended that appropriate Workers’ Compensation rate be calculated by Claimant’s wages in the fifty weeks prior to the injury, using his actual hours at straight time and excluding overtime multipliers, expense reimbursements, and crew bonuses. Claimant argued that the calculation of wages should include bad weather pay, crew bonus, holiday pay, meal/motel reimbursement, miscellaneous payments, personal time, profit sharing, overtime, training bonuses and vacation time.

In coming to its decision, the Department relied on SDCL 62-1-1(6) and determined that vacation, sick leave, holiday pay, etc. do not constitute earnings. Benefits from paid time off should not be calculated as earnings for Workers’ Compensation purposes because those amounts do not represent hours worked and should not be factored into the compensation rate. The Department excluded the crew bonus, the profit sharing, the motel and meal reimbursements, the bad weather pay, and the holiday pay.

McKinney vs. Rapid City Regional Hospital and FinCor Solutions

Jim Leach/Dennis Finch (first insurer); Charles A. Larson (second insurer)

Issue: Whether Claimant’s alleged 2007 work injury was an aggravation or recurrence of her 1998 compensable work injury.

Claimant experienced a work injury on August 28, 1998, while working for RCRH (who was self insured at the time). The 1998 work injury consisted of wrist and hand injuries. Claimant treated for her work injury and continued to do so over the years. Claimant had flare-ups, and filed another FROI in 2007 when FinCor was the insurer, although she was having the same issues.

Claimant and RCRH identified the same expert, who testified Claimant suffered a recurrence and everything was related to the 1998 claim. FinCor moved for summary judgment and the Department granted the motion as the experts testified Claimant suffered from a recurrence and found RCRH was still on the risk.

Milbrandt vs. Bibbs, Inc. and Dakota Truck Underwriters

Glenn Boomsma/Michael S. McKnight and Thomas J. Von Wald (ALJ Hageman)

Issue: Whether Claimant needed to personally exhaust the personal injury proceeds he received from a third-party tortfeasor before Insurer had to continue actual Workers’ Compensation benefits.

Claimant was employed by Employer as a long haul over-the-road trucker, and was in an accident caused by the negligence of a third party. He sustained injuries to his head, chest, neck, left shoulder, and right hip. Employer and Insurer accepted the injuries as compensable and benefits were paid. As a result of the May 30, 2007 accident, Milbrandt made a claim against the third-party tortfeasor who was responsible for the accident. In June of 2009, Milbrandt negotiated a settlement of $160,000.00 with the tortfeasor. After reducing the settlement amount for fees, costs and reimbursement to the Insurer for Workers’ Compensation benefits paid at the time of the settlement, Claimant was left with a net recovery of $73,541.32. The parties agreed that Employer and Insurer were entitled to an offset against Workers’ Compensation benefits in the amount of $73,541.32 pursuant to SDCL 62-4-38.

In September of 2011, Claimant continued to have pain in his right hip to the point where he needed a hip replacement. In January of 2012, Claimant had his right hip replaced. Insurer denied benefits for the hip replacement and in the alternative has requested an offset or credit against any benefits in the amount of $73,541.32. Claimant’s hip surgery and post-surgery care were mostly paid for by Medicare and Blue Cross Blue Shield supplemental insurance.

Employer and Insurer filed a motion for summary judgment making the argument that Milbrandt needed to personally exhaust the $73, 541.32 on medical bills and/or Worker’s Compensation benefits which become due in the future. Employer and Insurer argued that the offset should not be applied to any bills paid by Medicare and Blue Cross Blue Shield as the personal injury proceeds benefited Milbrandt personally and by having Medicare and Blue Cross Blue Shield pay his medical bills, Milbrandt was making a double recovery.

Claimant argued the actual medical bills versus the amounts paid by Medicare and Blue Cross Blue Shield, should be used to reduce the offset against future Workers’ Compensation benefits. Claimant argued that Employer and Insurer should not be able to benefit from his separate contractual obligation with Medicare and Blue Cross Blue Shield for health insurance.

In coming to its conclusion, the Department focused on the language in 62-4-38, which stated that "In the event the injured Employer recovers any like damages from such other person, the recovered damages shall be an offset against any Workers’ Compensation which the Employee would otherwise been entitled to receive." The Department determined this language meant that the benefits the Employee would otherwise have been entitled to receive means the amount the Employee would have been entitled to receive had the damages from the tortfeasor not been recovered. The Department went on to state that there was no question Claimant would be entitled to medical expenses if it is ultimately decided that the hip replacement is deemed compensable.

The Department held that in this case, the cost of the benefits which Milbrandt would be entitled, and to which the offset would apply, if his hip replacement is compensable, is the amounts actually paid by Medicare and Blue Cross Blue Shield and Milbrandt himself. The Department also noted that Milbrandt was not entitled to reduce the offset amount by the actual medical bills. However, in coming to its conclusion, the Department completely bypassed the well-accepted provision in Workers’ Compensation law that a Claimant may not make a double recovery. In this instance, the Employer and Insurer argued that Claimant made a double recovery because he was able to keep his personal injury proceeds while at the same time have a third-party pay his medical expenses without any form of reimbursement to that third-party. This decision defies common sense and is on appeal.

Dudash vs. City of Rapid City and Berkley Risk Administrators Company, LLC

Brad Lee/Tim Becker (ALJ Hageman)

Issue: Whether Employer and Insurer’s claim files needed to be turned over to Claimant pursuant to a discovery request.

The facts of the case aren’t important. The significance of this case is that the Department required the insurer’s claims file to be produced. The rule had been that the nurse case manger file was subject to production, but the claims file was off limits. This case changes that. Here, the Claimant filed a motion to compel seeking to get the claims file. The insurer argued the information was not relevant, and was protected by the work product doctrine.

The Department held the claims file may have relevant information so that objection was overruled. The closer call was whether the information was protected as work product. The Department followed some recent federal cases (not work comp cases) that it is part of an insurer’s job to investigate claims. Therefore, simply investigating claims is not done in "anticipate of litigation" which is the standard on whether something is work product. In this case, the claim was compensable and so the investigation and claims’ handling was not done in anticipate of litigation. Once it appeared the claim was headed toward litigation (either a denial or an attorney’s involvement), all documents and notes from after that date did not have to be produced.

I’ve been waiting for a decision like this. It was only a matter of time that our Department started requiring the claims’ file to be produced. It is absolutely critical that you keep the claims’ file purely professional and do not put anything in your notes that you wouldn’t want Claimant or his/her attorney to read. For instance, do not put that the Claimant is a liar, is a perm total, or anything that could be used against you if your file has to be turned over.

I spoke to Claimant’s attorney about this decision. He said that several defense attorneys have simply been producing the claims’ file without a motion to compel (which shocked me) and he has had several motions to compel granted; I have not seen a Department decision requiring production yet. He told me he has one case where the adjuster wrote in the notes that she was going to find a way to get the claim denied. I don’t know what her intent was in writing that, but it doesn’t look good on paper, especially when she denied the claim shortly thereafter.

Conclusion

As always, we hope you find these summaries helpful. In order to evaluate a case, you must know what the Department has been doing lately. There were several important decisions lately and I know there will be a couple more Supreme Court decisions in the coming months and some of the department decisions above are being appealed (remember, all Department decisions are subject to appeal). We hope all is well and look forward to working with you all for another year. Please let us know if you have any questions.  You can reach me, Charlie Larson, at 605-336-2424 orcalarson@bgpw.com.

It is not uncommon for a claimant to file an occupational disease claim but then at trial attempt to prove a case that is much more like a traumatic injury claim.  The reverse is also sometimes true.  How do courts treat these shifting proofs? 

            In Rivera v. United Parcel Service, the claimant began with UPS in 1992 initially loading trucks.  He became a commercial driver in 1999 delivering packages that weighed between one ounce and 190 pounds. On May 3, 2004, Rivera filed a claim petition alleging that constant bending and lifting caused an occupational back condition.   UPS filed an answer denying the claim petition.

            Trial ensued and petitioner said during his testimony that there was one particular day in July 2003 that was the cause of his back problem.  He said he was picking up for a company named Albees and felt sharp pain while lifting a 15-20 pound box.   He said he notified his supervisor,  Mr. Sam Battista, of his injury.  Nonetheless, he continued working and finished the day “with pain.” 

Petitioner further alleged that Battista told him to go home the next day because he was still in pain. That was a Friday and he rested over the weekend and returned to work on Monday.  Rivera claimed that he was unable to get clearance to see a doctor at  Concentra, the company approved facility for workers’ compensation, on Monday because Battista’s manager was not working that day.   Rivera said he went to see his union shop steward, Mr. Chris Eltzholtz, who instructed him to see a personal physician using his health insurance. 

Rivera obtained treatment through health insurance, including back surgery at NYU Medical Center.  NYU later intervened in the workers’ compensation case to obtain reimbursement of $49,525.35 for medical treatment it contended should have been paid in workers’ compensation.

During trial the following discussion took place on the record about the inconsistency between the claim petition and the proofs:

[The Court]:  The claim petition in this matter alleges occupational exposure on or about 1/2003?

[Counse]: Correct.

[The Court]:  Did I mishear when I heard July, 2003? . . . . Well, in other words, the direct testimony, July, 2003, picking up at Albees? . . . . But yet the claim petition talks about January 2003, an occupational?

[Counsel]:  Right.  Those are not inconsistent. He also said, even after he finished picking up the box at Albee’s, he continued to lift boxes and continued to have problems.  That was the particular day when his back got really bad but he was having problems since January 2003, which is consistent with the treating records. . .

UPS called Battista as a witness.  He said he did not recall any conversation with Rivera about a back injury in July 2003.  He denied being petitioner’s supervisor at that time.  Battista also said that it did not ring true that the shop steward would have told petitioner to see his own personal physician.  There was apparently no testimony at trial from the shop steward.

Petitioner produced testimony from Ricky Lezott, a center manager employed by UPS.  Mr. Lezott said that Rivera was out of work from January 4, 2003 until April 21, 2003 and from August 12, 2003 to December 26, 2003.  He did not know whether the absences were work related.

The Judge of Compensation considered all the evidence and found that petitioner had sustained a compensable accident with UPS in July 2003.  He found petitioner to be credible in his testimony.  He also found that Rivera did not “precisely follow and adhere to UPS policy and procedures” in reporting and treating his injury but found that petitioner did report the incident to Mr. Battista.   This was a critical finding by the judge because it negated any notice defense that UPS might have had.

The case was ultimately concluded by another judge as the first trial judge retired.  The succeeding Judge of Compensation awarded petitioner 35% credit 5% for his back.  UPS was also ordered to reimburse NYU for $49,525.35.

UPS appealed and argued that there were inconsistencies in the claim petition and petitioner’s testimony that should have disqualified Rivera from an award. The Appellate Division addressed these inconsistencies:

We acknowledge that petitioner’s claim petition referenced an occupational claim manifesting in January 2003, while Judge Rosamond’s finding of compensability hinged upon the occurrence of a work-related injury in July 2003.  However, Rivera’s testimony alleged a specific accident in July 2003, and the case was tried as such.  Essentially, the judge disregarded this inconsistency and amended the pleadings to conform to the evidence.  In so doing, we perceive no error.

The Court also rejected the argument that it was unfair surprise to UPS for petitioner to discuss a July 2003 accident for the first time at trial since there was a treating report from Dr. Ferrer of August 5, 2003, furnished during pre-hearing discovery, referencing an incident in July 2003.  The case shows that judges will generally conform the pleadings to the proofs at trial.  In essence, the judge disregarded the language on the claim petition and focused on whether a work-related accident occurred pursuant to the proofs at trial.  There are risks to both parties when this happens:  if the trial judge had found that Rivera failed to provide timely notice of a specific accident, there would have been no award.  Lack of notice is a defense in New Jersey to traumatic claims but there is no notice defense in occupational disease claims.

The case can be found at Rivera v. United Parcel Service, A-0710-12T1 (App. Div. December 17, 2013).

Anthony DiFabrizio worked for US Airways since 1985 at both Newark Airport and LaGuardia Airport.  At Newark Airport he loaded and unloaded baggage from planes, trucks and conveyor belts, as well as driving equipment to push back planes from ramp areas.  At LaGuardia he worked from 1995 to 2008 doing similar work. He also worked two years in the freight facility, which he described as stuffy.  From 1999 to 2008 he drove trucks to push back planes and directed planes. As of the time of the court decision he was still working for US Airways but had returned to Newark Airport.

            In 2001, DiFabrizio started to feel short of breath and noticed that he could not exercise or play sports to the same degree he had been able to in the past. He saw his doctor for upper respiratory conditions and took some medication for a viral infection. However, he was able to do his job and volunteer for overtime work.  He never sought treatment from an allergist or pulmonologist. 

            DiFabrizio was examined as part of his workers’ compensation case by two experts:  Dr. Malcolm Hermele for petitioner and Dr. Benjamin Safistein for respondent.  Dr. Hermele interpreted his chest x-ray as showing “increased interstitial markings” indicative of restrictive disease. He also diagnosed chronic bronchitis, estimating an impairment of 35%.  Dr. Hermele relied on a 2001 article from OSHA regarding the negative health effects of exposure to diesel exhaust.  That article did not refer to any other substances that DiFabrizio claimed exposure to.

            For his part, Dr. Safirstein found petitioner’s physical exam to be normal.  He noted that petitioner denied shortness of breath and a cough, which would negate the diagnosis of chronic bronchitis.  He said the x-ray of the chest was normal and his pulmonary function testing was just shy of normal.  Unlike Dr. Hermele, Dr. Safirstein was board certified in pulmonary medicine.  Further, Dr. Safirstein performed more extensive pulmonary testing, while Dr. Hermele only performed spirometry. 

            Notwithstanding these significant differences between the experts, the Judge of Compensation awarded petitioner 5% permanent partial disability.  US Airways appealed and argued that the evidence did not support the award. 

            The Appellate Division said that where two experts have diametrically opposed views, it is crucial for the Judge of Compensation to explain why he or she favored one expert over the other.  The court said that in this case there was no such explanation.  The Appellate Division commented on the more thorough examination by respondent’s expert.  “While Dr. Hermele performed lung function tests that measured only spirometry, Dr. Safirstein administered additional tests including diffusion analysis, which he termed ‘the most important test that anyone can have in lung function.”  Dr. Safirstein said that doing spirometry alone is not enough because sprirometry is only preliminary in nature and cannot be used to diagnose restrictive pulmonary disease.

            The court also noted the specific standards that a claimant must meet in an occupational disease claim. It reversed the decision of the compensation judge and remanded the case. “On remand, the judge of compensation must make detailed findings and determine on the present record whether DiFabrizio has proven ‘by suitable medical evidence that the employment exposure did indeed cause or contribute to the disease . . [and] that the employment exposure substantially contributed to the development of the disease.’”

            The case illustrates a number of lessons for practitioners.  In respiratory claims, it is particularly important to retain board certified experts who do the complete testing that is necessary to establish either an obstructive or restrictive impairment.  The abbreviated testing by petitioner’s expert put petitioner at a disadvantage. Moreover, science matters in occupational claims:  simply saying one is exposed to various pulmonary irritants is seldom enough without some scientific support linking the alleged exposure to the particular medical condition.

    This case can be found at DiFabrizio v. US Airways, A-1497-12T4 (App. Div. November 20, 2013).

Loparex, LLC and Sentry Insurance v. James Bates, Court of Appeals of Iowa, No. 3-593 / 13-0121

The Claimant was injured when his left hand was caught in a machine. He underwent several surgeries which resulted in the amputation of two fingers. He subsequently developed complex regional pain syndrome (CRPS). He experienced abnormal sensations and sensitivity to touch. He also suffered from severe depression as a result of the injury. Due to this, he was proscribed a variety of medications which he contended made him drowsy.

The agency entered a decision finding the Claimant to be permanent and totally disabled, which was affirmed by the District Court on appeal. The case was then appealed on the findings that the drowsiness complaints were related to the work injury, as well as the award of permanent total disability benefits. The Court reviewed these issues for substantial evidence.

The Court found that there was evidence in the record to support the employer’s assertions that the Claimant was not credible, his partner stood much to gain by testifying on his behalf, the medical records did not contain consistent claims of sleepiness, the Claimant was diagnosed with sleep apnea which improved with therapy, he did not lose weight or avoid alcohol as instructed to help with drowsiness, a subsequent on the job injury was not caused by drowsiness as he claimed and that the Claimant had a history of carelessness at work. However, the Court went on to state that this didn’t mean the record lacked substantial evidence to support the finding of a causal connection. Ultimately the Court relied on the references in the medical records to medications causing drowsiness to find substantial evidence and chose not to reweigh that evidence.

The Court next took up the issue of permanent total disability and indicated that it would only overturn the Commissioner’s finding if it was “irrational, illogical or wholly unjustifiable”. The Court opined that they might draw different inferences in regards to Claimant’s permanent disability based upon the records as a whole, the Court could not say that the findings made by the Commissioner lacked substantial evidentiary support or that his determination was irrational, illogical or wholly unjustifiable. As such, the finding of the Commissioner was affirmed.

Iowa Newspapers, Inc. and AIG v. Michelle Watson, Court of Appeals of Iowa, No. 3-783 / 13-0334

On December 19, 2008, the Claimant injured her left side in the course of her employment when she slipped on ice. At first, the Claimant did not think the injury was significant, but it later led to back pain, burning and numbness, headaches, interrupted sleep and depression. In May of 2009, the Claimant ended her employment with Iowa Newspapers as it became too difficult to work.

The Claimant filed a petition for workers compensation benefits and a hearing was held on September 10, 2010. The agency found that the Claimant’s condition arose out of her work injury, that her healing period ended as she was at MMI and that she was permanently and totally disabled. The decision was appealed and affirmed by both the Commissioner and the District Court.

The decision was appealed by the employer on the grounds that the agency erred in finding the Claimant’s injury was related to her fall, her healing period and ended and that she was permanently and totally disabled. The Court opined that their review was for substantial evidence, and though there was conflicting medical evidence, the Court found substantial evidence supported the finding of the agency and affirmed the decision. 

Call Mark Bosscher or Lee Hook with any questions @ 515-243-2100.  We’d be happy to help, whether it be a quick or a complex issue!

Jennifer Caswell successfully defended a claim arguing the injury was temporary and minor.  The judge restricted claimant to benefits already paid and denied additional extensive temporary benefits and potential permanent benefits.  Ms. Caswell also successfully defended a permanent total disability claim brought by a 49 year old claimant, thereby avoiding large permanency exposure.  Judge Fitzgerald also declined to award any future medical treatment in that case.

Ritsema & Lyon is proud to announce U.S. News & World Report selected us as a 2014 Tier 1Best Lawyers® “Best Law Firm” in Workers’ Compensation Law – Employer.  This is the second year Ritsema & Lyon received this recognition.  Here is just one sampling of some of the great things our clients had to say: “Ritsema & Lyon is the household name for workers’ compensation law in the community. Their attorneys are of the utmost quality with customer service being a top priority… They are truly a top notch firm.”  We are deeply appreciative to our clients for their feedback.  We strive to provide this type of service to each and every client.  Receiving recognition based on such positive feedback is a great honor!

TOP REASONS WHY INJURED WORKERS SEEK ATTORNEYS

By Kevin L. Connors, Esquire

Defying the conspicuously silent logic of the hoary adage that “what happens in Vegas, stays in Vegas”, disavowing any apostolic compulsion to confess, we herewith reveal the transparent composition of our recent presentation before the National Workers’ Compensation and Disability Conference and Expo, held in Las Vegas from November 20, 2013 through November 22, 2013, with apologies and atonements to David Letterman, he of the infamous Top Ten, as well as Alan Pierce, Esquire, our tactfully laconic moderator during our Vegas session on November 22, 2013, allowing our panel, and our attentive audience, to review and identify the following potential causes as reasons injured workers seek attorney representation in workers’ compensation matters:

1.      CLAIM DENIAL:

·                     This is the number one reason why injured workers hire attorneys;

·                     Denials are often, but not always, triggered by claim investigation;

·                     Multiple factors influence claim denials, to include medical evaluations, work restrictions, availability of alternative-duty work, prior claim history, and employer input.

2.      INJURED WORKER REPRESENTED IN PRIOR CLAIM:

·                     The existence of a prior attorney-client relationship, obviously dependent upon prior claim outcome, will usually result in an injured worker retaining attorney for a new claim.

3.      CONFUSING STATE FORMS:

·                     Certain jurisdictions, Pennsylvania being one of them, employ compensation forms that even judges, experienced trained counsel, and the most highly sophisticated claims adjusters struggle to understand, in terms of their effect on compensability, disability, and related issues;

·                     Receipt of a State form, accompanied by a form letter, can be confusing to an injured worker unskilled in compensationitis;

·                     The same form can be the impetus for the Google keystroke, the counterpoint being to use simple, direct, and non-insulting directions for form execution and return.

4.      CESSATION/TERMINATION OF CLAIM BENEFITS:

·                     The stoppage of benefits, absent agreement to the stoppage, generally results in attorney retainage;

·                     Employer-filed WC litigation seeking to cease/terminate claim benefits drives injured workers to attorneys.

5.      PROCESS OVERWHELMES AND CONFUSES:

·                     Although not rocket science, it is a not uncomplicated process, to secure or retain workers’ compensation benefits, particularly when potentially impacting on other alphabet soup statutes, FMLA, ADA, Unemployment Compensation, as well as private disability coverage.

6.      DISSATISFACITON WITH MEDICAL CARE:

·                     Cannot get medical treatment authorized;

·                     Does not like employer-designated health care practioner;

·                     Disagrees with, or will not follow through with treatment recommendation;

·                     Cannot get the claims adjuster to answer questions regarding medical compensation benefits.

7.      THIRD-PARTY LIABILITY:

·                     The existence of third-party liability typically results in the involvement of personal injury attorneys, with referral to workers’ compensation Claimant attorneys;

·                     Potential third-party liability triggers potential subrogation lien interests of the employer/insured.

8.      GOOGLE IT:

·                     In general, the ability to find and retain skilled legal representation, in any kind of practice area, is only a computer keystroke away;

·                     It is also there on the radio, on the drive to the doctor’s office;

·                     It is ubiquitous;

·                     It is splattered all over public transportation;

·                     It is emboldened in numerous publications and periodicals.

9.      UNPAID MEDICAL BILLS:

·                     Collection notices for unpaid medical bills drive injured workers crazy, resulting in attorney involvement.

10.  I HATE MY JOB ALMOST AS MUCH AS I HATE MY BOSS:

·                     It happens!

·                     This evidences a lack of trust, not to be confused with pure retaliation;

·                     It is the perception that has festered, infecting claim dispositions.

11.  REFERRALS BY MEDICAL CARE:

·                     Particularly true with chiropractors, as well as physical therapists, as they tend to be quicker referral sources than other practioners;

·                     It is a symbiotic medico-legal universe.

12.  FEAR OF BEING FIRED:

·                     Are we surprised?

·                     The fear of being fired, besides producing cold sweats and trepidation, produces psychological crisis, resulting in guttural confrontation.

13.  FAMILY PRODDING:

·                     It is the nudge while watching TV;

·                     It is the frustrated “when are you going to do something about this?”;

·                     It is the stuck at home, no paycheck, no ride to the doctor, no work, and no taking out the trash, no doing house chores, building a base of friction and frustration.

Practical Tips:

Is there a moral to our priceless story?

Anyone attending the National Workers’ Compensation Disability Conference and Expo heard numerous presenters characterize workers’ compensation systems and procedures as having at their core, the function of restoring injured workers’ physical and psychological capabilities to return to work in order to achieve pre-injury status.

Several NWCDC panelists underscored the humanitarian policies upon which workers’ compensation statutes and systems are structured, placing great emphasis on the moral obligation of all workers’ compensation stakeholders to employ fairness in the administration of claims.

Embodying this turn, the following tips are suggested for all, in the course of dealing with injured workers, to include:

·                     Be courteous;

·                     Be polite;

·                     Be truthful;

·                     Be fair;

·                     Be direct;

·                     Be responsive;

·                     Be informed;

·                     Be civil;

·                     Avoid argument;

·                     Avoid making assumptions about claim facts and claim personas;

·                     Be credible;

·                     Be yourself;

·                     Be real.

In short, even in contested/disputed claims, it is critically important to treat others, to include the Claimant, Claimant’s Counsel, the Employer, any Third-Parties involved in the claims administration process, Defense Counsel, and the administrative factfinder, as you would want others to treat you.

 ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

         In one of the most puzzling decisions in decades dealing with N.J.S.A. 34:15-40, the court inDever v. New Jersey Manufacturers Insurance Company, 2013 N.J. Super. Unpub. LEXIS 2553, (App. Div. October 23, 2013) ruled that respondent has no lien on the medical portion of a third party claim against a UM or UIM carrier.

            The case involved a motor vehicle accident which took place on January 3, 2000.  Plaintiff, John Dever, was an on-duty Atlantic City police officer who suffered injuries when his vehicle was struck by a vehicle driven by Alice Turner.  Plaintiff’s injuries were severe enough that he was granted an accidental disability pension effective January 1, 2001 granting him two thirds of his pay for life free of state and federal taxes. 

Dever settled his claim against Turner, who only had a $25,000 policy limit and then filed a claim under his underinsured motorist policy issued by NJM. At trial the parties stipulated liability based on an agreement to cap damages within the $500,000 policy limits as reduced by the $25,000 payment from Turner. 

Notwithstanding the extent of Dever’s injuries, the jury determined that he had not proven a permanent injury and awarded Dever $275,000 as compensation for his economic loss.  He was not awarded pain and suffering damages. Both parties then challenged the verdict.  NJM argued that the jury overcompensated Dever for what it contended were temporary injuries because most of the treatment ended in May 2000.  The trial judge and the Appellate Division both rejected that contention and noted that Dever’s depression disrupted his ability to obtain and retain employment and therefore the jury verdict was supportable.

NJM also challenged the reimbursement of plaintiff’s medical expenses.  The workers’ compensation carrier paid all the medical bills.  Following the verdict, Dever moved for NJM to pay $8,482.11 arguing that he should not be forced to absorb his own medical expenses.  The trial judge agreed with Dever in a post-verdict motion but the Appellate Division reversed.  The court noted that it was missing key information at the time it issued its decision. “The workers’ compensation carrier paid all medical bills and we are told placed a lien on plaintiff’s recovery from the tortfeasor.  The record does not disclose whether the workers’ compensation carrier was paid $8,482.11 from plaintiff’s settlement with Turner.”  

First, the Appellate Division noted that every automobile insurance policy must provide PIP benefits for the payment of medical expenses to the insured. The court further observed case law stating that an “injured person who was the beneficiary of the PIP payments could not and should not recover from the tortfeasor the medical, hospital and other losses for which he had already been reimbursed.” (citations omitted). Therefore, the court said, a plaintiff in this situation cannot offer evidence of the amounts collectible or paid under a standard automobile insurance policy of PIP benefits. The court added that when an accident victim is not compensated for medical expenses, the accident victim may recover medical expenses.

Next the court examined what happens when an accident victim incurs medical expenses arising from work.  It noted that workers’ compensation coverage is primary, as in this case, meaning that Dever’s medical bills were appropriately paid under workers’ compensation.  PIP carriers need not make payments which are covered by workers’ compensation.  In fact, had NJM paid the medical bills under PIP, the carrier would have had a right to recover those payments from the workers’ compensation carrier.

The court then discussed the subrogation rights of the workers’ compensation carrier underN.J.S.A. 34:15-40.  It said, “Section 40 has been found to require reimbursement when an employee obtains a recovery from his or her UIM carrier as a result of third-party liability.”Midland Ins. Co. v. Colatrella, 102 N.J. 612, 616-618 (1986).  This furthers the policy goal of workers’ compensation to avoid double recovery.

The court seemed to believe that there was tension between the automobile law and workers’ compensation law.  It said in a far-reaching opinion:

The record is not clear as to whether the workers’ compensation carrier invoked its lien against the $25,000 recovery from Turner.  We conclude such action would be inappropriate.  Under these facts, plaintiff’s medical expenses are the responsibility of the workers’ compensation carrier and are not reimbursable by defendant.  The trial court’s decision is reversed and the order for defendant to pay $8,482.11 representing plaintiff’s medical bills is vacated.

The court’s reasoning is hard to follow since it does not focus on the concept of double recovery so much as it does the concept of permitted recoveries. 

Also, the Legislature has decreed workers’ compensation insurance must be the primary source of payment for work-related automobile injuries, and the cost of the employee’s medical expenses is born (sic) by the worker’s (sic) compensation carrier not the PIP insurance carrier.  Therefore, a section 40 lien, which attaches only topermitted recoveries, cannot include medical expenses from a New Jersey no-fault insured; there is no right to recover such expenses.Patterson v. Adventure Trails, 364 N.J. Super. 444, 448-49, 836 A.2d 856 (Law Div. 2003).  Allowing reimbursement to a workers’ compensation carrier from an employee’s UIM carrier is counter to the legislative intent of this express statutory reimbursement scheme.

It is important for practitioners to understand the limitations in this decision. First, there was no workers’ compensation carrier involved in this case.  The compensation carrier’s identify is not disclosed, and there is no evidence that the compensation carrier appeared or made any argument.  NJM was the UIM carrier, not the workers’ compensation carrier. It appears that counsel for NJM was arguing that the UIM carrier did not owe plaintiff the sum of $8,482.11 because that sum had been paid by the workers’ compensation carrier.  The court took this a step further and went on to address the subrogation rights of the workers’ compensation carrier, which was not even involved in the proceeding.  As such, respondents can argue that the court’s holding in this case is what is called “dictum,” or irrelevant to the facts of the case. 

The reverberations of this case will be felt by employers until further clarification is given in future litigation.  Claimants’ attorneys will seize on this case to argue that in a work-related car accident case, employers have no rights to subrogation of medical benefits.  The Dever case is already being widely discussed by practitioners throughout the state, and employers need to seek a published decision clarifying theDever decision since it seems contrary to the established rule against double recoveries.