Written by: Lindsay Underwood

A recent May 2022 decision from the North Carolina Court of Appeals provides a refresher on the “eggshell plaintiff rule” and taking your claimant how you find them. In Kluttz-Ellison v. Noah’s Playloft Preschool, the claimant sustained two separate incidents to the knees while working as the owner and director of a preschool. One incident took place in 2013, while the claimant was changing a lightbulb, and one took place in 2015, when she tripped over a student’s sleeping cot. Both claims were found to be compensable.

The claimant was ultimately referred for a revision replacement surgery for the right knee, as well as a total knee replacement for the left knee. Before she could undergo the same, her physician opined that she needed to lose a significant amount of weight to get the surgery. Unfortunately, the claimant was unable to lose weight on her own, and the physician recommended a bariatric surgery to assist with weight loss. The parties proceeded to hearing on the issue of weight loss and the need for bariatric surgery. The claimant testified she had tried to lose weight on her own using various diets. The Deputy Commissioner found the claimant’s need for a right knee revision surgery and repair of hardware loosening were not related to the compensable work injury, and, thus, the bariatric surgery, was unrelated as well. The claimant’s claims for the surgeries were denied.

The claimant appealed to the Full Commission. Notably, during the appeals process, the claimant underwent the right knee revision surgery and bariatric surgery on her own. The Full Commission reversed, concluding her right knee condition, treatment, and, now completed, right knee revision surgery was compensable. The Full Commission initially concluded her need for weight loss treatment/bariatric surgery was not directly related to her injury but following a Motion for Reconsideration and a Motion to Allow Additional Evidence filed by the claimant, the Full Commission amended the Opinion and Award. Though the Full Commission did not admit additional evidence, they concluded the bariatric surgery was medically necessary as a precedent to her compensable right knee surgery.

Defendants appealed to the Court of Appeals. The Court noted the claimant’s bariatric surgeon testified it was standard practice to not allow a patient to have knee replacement surgery until their BMI is under 40. Further, the surgeon testified that the claimant had fully participated in efforts to lose weight on her own. Thus, the only way for her to get her BMI under 40 so she could undergo the medically necessary knee replacement revision, was to have bariatric surgery. Further, the claimant needed surgery for both knees, and her authorized treating physician testified that it was an emergent weight loss requirement to get her BMI under 40 before she could undergo the surgeries.

The Court of Appeals cited N.C.G.S. §97-25, and the definition of medical compensation including “other treatment” such as payment of medical expenses incurred as a result of bariatric surgery because it was medically necessary to help her achieve an optimal BMI to allow her to undergo the right knee replacement revision. The question then became whether her need for bariatric surgery was directly related to the work injury. Applying the Act liberally, the Court of Appeals rejected Defendants’ argument that the claimant’s weight issues preexisted the work injury and were not therefore directly related to the compensable claim. Instead, they noted a direct line of causation connecting the dots between the compensable injury and the Commission’s award for bariatric surgery. As the bariatric surgeon testified that, due to physical limitations (the need for bilateral knee surgeries), she could not lose weight fast enough on her own, her need for bariatric surgery was directly related to the compensable injury.

Employers are often frustrated by the “tangential” medical treatments that come up while a claimant is receiving treatment for a compensable condition. Unfortunately, defendants take their claimant as they find them, and this decision only confirms that the Commission, and the Court of Appeals, will require defendants to take steps to return the claimant to their pre-injury status, even if it includes providing treatment like bariatric surgery, weight loss programs, and smoking cessation efforts.

Implications for Defendants

A key point was that the physician testified that the claimant had made her best efforts with other weight loss treatment, such that the bariatric surgery was the only remaining option. A motion to compel the claimant to comply with medical treatment is a potential option if defendants are ordered to pay for weight loss to treat a compensable work-related injury. The claimant will have to show up at meetings and comply with preliminary weight loss programs or they could jeopardize their benefits due to noncompliance with medical treatment. What is clear from this case is that Defendants should not have to immediately pay for the most expensive treatment modality, and the claimant still has to make efforts on their own via less-expensive options.

Claimant was involved in an 8/30/18 work related motor vehicle accident while working as a police officer. The neck and low back were accepted by Employer. She underwent a compensable two-level cervical fusion surgery on 8/7/19.

On 9/15/21, Claimant filed a Petition seeking 26% permanent impairment to the cervical spine and 10% permanent impairment to the lumbar spine, based upon Dr. Rodgers’ opinion. Dr. Rodgers rated permanency under the 5^th Edition of the AMA Guidelines. Employer contested the ratings based upon the opinion of Dr. Piccioni, who found there was 9% permanency to the cervical spine and 3% permanency to the lumbar spine. Dr. Piccioni rated permanency under the 6^th Edition of the AMA Guidelines.

After trial, the Board issued a Decision dated 7/7/22 finding in favor of Employer, and awarding Dr. Piccioni’s ratings. The Board noted that Claimant’s cervical fusion was successful. The surgery improved her pain and function. The treating surgeon released Claimant to work without any restrictions for the neck or back thereafter. Post-surgery imaging showed no nerve root compromise. Claimant declined offered lumbar injections. Claimant did not seek a second opinion for the neck or back. The Board also accepted the opinion of Dr. Piccioni that the 6^th Edition focuses more on objective findings and function, whereas the 5^th Edition relies more on subjective complaints.

Should you have any questions regarding this Decision, please contact Greg Skolnik, or any other attorney in our Workers’ Compensation Department.

Mobley v. City of Wilmington, IAB Hrg. No. 1476680 (July 7, 2022). 

The 2022 Indiana legislature enacted a clarifying change to the statute of limitations under the Worker’s Compensation Act due to recent challenges to a long-held practice honoring the Board’s position that plaintiffs have two years from the last date for which compensation has been paid for  an accepted injury claim to file its Application for Adjustment of Claim.

Statute of Limitations

I.C. 22-3-3-3, effective July 1, 2022, now confirms the two-year period within which an Application for Adjustment of Claim must be filed to begin running on the last day for compensation was paid after the occurrence of an accident for  which compensation is paid as temporary total or temporary partial disability benefits.

Increased Benefits

The Act was amended to increase temporary total disability and benefits for payment of permanent partial impairment beginning July 1, 2023 with regular 3% increases through 2026.

Contact Diana Wann:  diana.wann@jacksonkelly.com  for a schedule of rates and benefits through 2026.

Ambulatory Surgery Centers Included  in 200% of Medicare Cap

Ambulatory surgery centers were defined and included in the medical cap of 200% of Medicare reimbursement as used by CMS previously affecting hospitals only, effective January 1, 2023.

Clean Claim Provision Added, I.C. 22-3-7.2, Payments of Claims

Clean Claim payment deadlines were established, effective January 1,2023.

Written by Tracey Jones and Heather Baker 

On July 26, 2022, the Full Commission issued another extended benefits decision, Messick v. Walmart Stores, Inc. The panel consisted of Vice-Chair Griffin, Commissioner Taylor and Commissioner Goodman.  In this case, the Full Commission awarded the claimant extended benefits. The issue of extended benefits was not an issue at the Deputy Commissioner level. The Deputy Commissioner issued an Opinion and Award finding compensable aggravations to claimant’s pre-existing left knee condition and mental health condition, awarded ongoing TTD benefits, and ordered payment for claimant’s dental treatment related to a post-accident fall. Defendants did not appeal the findings or conclusions related to causation, but appealed on the issue of whether the first date of disability versus the date of injury was controlling in regard to determining the indemnity benefits and/or extended benefits owed to claimant under N.C.G.S. § 97-29.

Claimant sustained two compensable injuries; one to her lumbar spine and another to her right knee. Her lumbar spine injury was pre-2011 statutory reform and her right knee injury was post-2011 reform. Both injuries were accepted by Defendants. Defendants also authorized benefits for psychological treatment as a part of the claim. Ultimately, claimant required, among other treatment, a spinal cord stimulator, a knee replacement surgery, and a knee replacement revision procedure, along with increased psychological treatment for depression, which included a 20-day psychological support and physical reconditioning program where she weaned off Oxycodone. Eventually, claimant’s left knee became problematic, and she required a left total knee replacement, which claimant’s doctor opined was the result of her accepted right knee injury. She was ultimately assessed with failed back syndrome, chronic low lumbar pain, and chronic knee pain.

As a part of litigation, the parties deposed nine experts, consisting of claimant’s medical providers and claimant’s vocational expert. In terms of disability, many providers deferred to other providers and/or a vocational expert, and claimant was assigned permanent sedentary restrictions with no repetitive bending or stooping; no lifting more than twenty pounds; no twisting; no kneeling; no climbing ladders or stairs; no walking more than forty yards at a time; and no sitting or standing for more than thirty minutes at a time. The claimant’s vocational expert concluded that there was no reasonable vocational probability that claimant would be able to secure a job and maintain gainful employment. He testified she had a total loss of wage-earning capacity, despite noting that claimant expressed multiple times she would prefer to be working and productive.

The good news is the Full Commission, in keeping with it’s other extend benefits decisions, clearly states that the standard in extended benefits cases is different than the normal standard for proving entitlement to temporary total disability benefits.  Applying the revised standard set forth in the 2011 revisions to N.C. Gen. Stat. § 97-29(c), the Full Commission reiterated that to establish entitlement to extended compensation, a plaintiff must show that they have a total loss of the ability to earn wages in any employment.  See N.C. Gen. Stat. § 97-29(c) (2021).

However, the Full Commission found the vocational expert’s opinion credible and concluded there were no jobs in the job market within claimant’s functional capabilities. The Commission found ongoing disability for claimant’s pre-reform injury, and the Commission also found a total loss of wage-earning capacity due to her compensable injury for the second post-reform injury. Claimant was awarded ongoing medical benefits and TTD benefits for the pre-reform injury until claimant returns to work or until further order by the Commission and awarded extended benefits for the post-reform injury.  The Commission focused on claimant’s chronic pain, age, and length of time from being in any academic situation and relied on the only vocational expert to testify in the case to conclude that claimant has sustained a total loss of her wage-earning capacity.

Takeaways for Defendants

This Opinion and Award once again demonstrates the importance of expert testimony in these extended benefit cases.  The physicians deposed all found claimant’s pain complaints credible and either would not comment on claimant’s ability to work or deferred to a vocational expert as to whether there were jobs available that claimant could perform.  The only vocational expert that was deposed clearly testified that claimant had suffered a total loss of wage-earning capacity because of her restrictions and chronic pain complaints.  In order for defendants to successfully defend these cases, they must retain or have testimony from both medical and vocational experts that the claimant has some wage earning capacity.  If defendants can successfully present this evidence, past cases suggest that they will prevail and extended benefits will not be awarded.

Our team will continue to monitor the developments as this issue works its way through our court system. 

If you have questions or wish to discuss how to best position yourself in potential extended benefits matters, please reach out to Tracey Jones or a member of our Workers’ Compensation Team. 

Legal Update by Attorney Alison Stewart and Law Clerk Morgan Borron

Compensability Standard for Mental-Mental Claims of Emergency Responders

In Tripp v. Scott County Emergency Communication Center, 977 N.W.2d 459 (Iowa 2022), the Iowa Supreme Court addressed whether Iowa law holds emergency workers to a separate, higher standard to be eligible to receive workers’ compensation benefits for trauma-induced mental injuries, than other workers who sustain identical injuries, but work in other roles. In this case, Claimant was diagnosed with PTSD after receiving a disturbing call from a mother who was screaming about the death of an infant. Claimant had worked in that role for approximately 16 years prior, but testified the screams in this call were “beyond ‘normal’ sounds: ‘guttural, awful.’” In the days that followed, Claimant became withdrawn, unable to process emotions, wanting to sleep, and tearful. The employer approved Claimant’s treatment with a licensed mental health counselor and psychologist, both of whom diagnosed Claimant as having suffered from PTSD as the result of the September 30, 2018 call.

Claimant’s treating psychologist testified her PTSD constituted a chronic episodic condition that resulted in a permanent disability. The Deputy Commissioner denied Plaintiff’s petition for workers’ compensation benefits because 911 dispatchers “’routinely’ take calls involving death and traumatic injuries” and that Plaintiff had failed to establish that the call was “unusual” or “unexpected” as required under the court’s prior mental injury cases. The Commissioner affirmed the Deputy’s Arbitration Decision, as did the District Court. Claimant appealed, which was retained by the Iowa Supreme Court.

Psychological injuries meet the definition of personal injuries for purposes of determining workers’ compensation benefit entitlement in Iowa, but employees claiming mental injuries must prove both medical and legal causation. See Brown v. Quik Trip Corp., 641 N.W.2d 725, 727-29 (Iowa 2002). The legal causation requirement could be satisfied where an “unusual strain” led to the mental injury. The Court held that based on the evidence, Plaintiff Tripp’s PTSD arose directly from her handling of the September 30, 2018, 911 call in the course of her work as an emergency dispatcher. The Court held that focusing on an employee’s job to determine an “unexpected strain” placed emergency workers in a disfavored position when compared to other workers. It held there should be no “heightened evidentiary hurdle” for these types of employees. Rather, because Claimant was able to prove her purely mental injury (PTSD) was traceable to a readily identifiable work event (the September 30, 2018, phone call) she had proven legal causation. The likely impact of this case is that this expands the compensability of mental injuries in Iowa.

Industrial Disability Awarded in Two Cases Involving a Shoulder Injury

The Commissioner awarded industrial disability in two cases involving the shoulder.

• In Carmer v. Nordstrom, Inc., File No. 1656062.01 (Iowa Workers’ Comm’r App. Dec. December 29, 2021), the worker sustained a right shoulder injury and then developed a left shoulder sequela injury due to overuse. The agency concluded that the two shoulder injuries cannot be compensated separately under 85.34(2)(n), as that section refers only to a singular shoulder. Further, because the legislature did not add the shoulder to the list of scheduled members to be compensated on a 500-week basis when two are injured in a single accident, the two shoulder injuries could not be compensated under 85.34(2)(t). The Commissioner therefore held that the two shoulder injuries together should be compensated industrially under “catch all” provision of 85.34(2)(v).
  
  
• In Bridgestone Americas, Inc. v. Charles Anderson, Case No. CVCV063124, Ruling on Petition for Judicial Review (Polk Co. Dist. Ct. Aug. 3, 2022), the district court affirmed the Commissioner’s award of industrial disability under 85.34(2)(v) where the worker sustained an injury to the shoulder and separate injury to the arm arising out of the same incident. The Anderson decision stands for the principle that where an employee sustains injuries to the shoulder and any other scheduled member, the injuries will be compensated industrially.

Both Carmer and Anderson are on appeal; however, they are the current law of the Agency and should be considered when evaluating shoulder cases.

Shoulder Injuries and Second Injury Fund Benefits

In Martinez-Rivera v. Signet Builders, Inc., File No.: 5064517.01 (Arb. Dec. Sept. 16, 2021), the deputy commissioner held that the Claimant did not qualify for Second Injury Fund benefits because section 85.64(1) does not list the shoulder as an enumerated body part which may trigger Fund liability.

Impact of Termination of Employment and Industrial Disability Entitlement

The question of whether a claimant was entitled to industrial disability pursuant to 85.34(2)(v) due to her voluntary choice to transfer to a lower-paying position with Defendant/Employer was addressed in Kish v. University of Dubuque, File No.: 5066482 (Arb. Dec. July 29, 2021), affirmed on appeal, (App. Dec. Nov. 30, 2021). In Kish, claimant injured her back on May 30, 2018, while working as a lead custodian for the University (making $1.00 more per hour than regular custodians). She was released to return to work without restrictions and placed at MMI on June 19, 2019 and returned to work that same day as a lead custodian, at the same rate of pay and working the same number of hours. Claimant did not think she would be able to handle the lead custodian position when students returned to campus, and so she bid into a regular custodial position in August 2019, which reduced her pay by $1.00/hour.

The deputy held that Claimant made a voluntary choice to transfer, that the University did not request/require Claimant to change positions, and no physician had imposed permanent restrictions that would prevent her from continuing to work as a lead custodian. In light of the above, the Deputy found that the employer had offered Claimant ongoing work in a position that paid the same or more than she earned on the date of injury, limiting her recovery to the functional impairment pursuant to 85.34(2)(v). Kish is currently being appealed.

COVID-19 Death Ruled Non-Compensable

The agency addressed employer responsibility for an alleged work related COVID-19 death in Bolton v. Marcus Lumber, File No. 20015335.01, 2022 WL 1787479 (Arb. Dec. Mar. 24, 2022). To establish a compensable injury in Iowa, an employee must establish that the injury has a causal connection to the employment. The question of medical causation is “essentially within the domain of expert testimony.” Cedar Rapids Cmty. Sch. Dist. v. Pease, 807 N.W.2d 839. 844-45 (Iowa 2011). Here, both parties presented expert witnesses to opine when Bolton may have contracted COVID-19, which ultimately led to his death. The employer provided evidence they followed all CDC guidelines and precautions for their employees, including requiring masks, social distancing, temperature checks, and negative COVID tests for employees before return to work after exhibiting symptoms. In this case, multiple employees had tested positive for COVID in the weeks leading up to Bolton’s diagnosis, however, the employer was not found liable. The Claimant did not meet the burden of proof where evidence was introduced indicating Claimant was not following the CDC guidelines in his personal life where he was gathering with family outside of his household, going out to lunch, and working for the fire department all while not wearing a mask.

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NOTICE TO THE PUBLIC

The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. This disclosure is required by rule of the Supreme Court of Iowa.

Peddicord Wharton Legal Updates are intended to provide information on current developments in legislation impacting our clients. Readers should not rely solely upon this information as legal advice. Peddicord Wharton attorneys would be pleased to answer any questions you may have about this update. ©2022 Peddicord Wharton. All Rights Reserved.

Legal Update by Attorneys Alison Stewart and Jordan Gehlhaar

The Iowa Division of Workers’ Compensation recently released a decision assessing how settlement with the Second Injury Fund (SIF) affects an injured employee’s claim against their employer and its insurance carrier in Milbrandt v. R.R. Donnelly.

The SIF compensates injured employees who have proven a previous qualifying injury, a second compensable work injury, and permanent disability resulting from each. In effect, the current employer is responsible only for the portion of disability attributable to the injury occurring during their employ; SIF assumes responsibility for the remainder of total disability.

Claimant Nancy Milbrandt filed a petition alleging a work related cumulative injury to her left and right arms and hands as of November 26, 2019. In addition to the employer and insurance carrier, the petition stated a claim against the Second Injury Fund of Iowa. Prior to the arbitration hearing, the claimant entered into a compromise settlement agreement with SIF, which was approved by the Workers’ Compensation Commissioner.

The subject of the settlement included the November 26, 2019 injury occurring with the defendant employer. As such, the employer argued that once the settlement was approved, the Commissioner lacked jurisdiction over the case. Claimant argued that the settlement was a contract binding only the parties—her and the SIF—and the case against her employer should still proceed to hearing.

The Deputy Commissioner focused on the language of Iowa Code Section 85.35(9): “an approved compromise settlement shall constitute a final bar to any further rights arising under this chapter . . . regarding the subject matter of the compromise . . . .” The Iowa Supreme Court had previously interpreted this language broadly. Accordingly, a previous decision by the Commissioner found that as a matter of law, a settlement with the SIF operated to deprive the agency of jurisdiction, meaning a claimant cannot re-litigate the same injury against the employer that was the subject of the settlement. This is true even when the parties include language attempting to preserve further claims against other defendants.

Since the date of injury against the employer was part of the subject matter of the approved settlement with the SIF, Claimant Milbrandt had no further rights under the workers’ compensation code. Employers and their insurance carriers should be aware their liability may be affected if the SIF is a co-defendant. However, this holding may affect claimants’ willingness to enter into settlement negotiations.

Peddicord Wharton will continue to monitor case law on this issue.

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NOTICE TO THE PUBLIC

The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. This disclosure is required by rule of the Supreme Court of Iowa.

Peddicord Wharton Legal Updates are intended to provide information on current developments in legislation impacting our clients. Readers should not rely solely upon this information as legal advice. Peddicord Wharton attorneys would be pleased to answer any questions you may have about this update. ©2022 Peddicord Wharton. All Rights Reserved.

Practical Advice in New Jersey Workers’ Compensation

Under N.J.A.C. 12:235-3.8, interrogatories are allowed in the following types of cases without motion (meaning, neither party is required to file a Motion for Leave to Serve Interrogatories with the Court): dependency cases (See N.J.A.C. 12:235-3.8(a)), re-opener cases (See N.J.A.C. 12:235-3.8(d)), and occupational exposure cases  (See N.J.A.C. 12:235-3.8(f); for sample occupational interrogatories, click here).

Pursuant to N.J.A.C. 12:235-3.8(g), interrogatories may be allowed in other cases, upon motion, for good cause shown. Examples of cases where a motion for interrogatories may be filed are COVID-19 cases, medical provider cases, or certain types of denied cases where further information is being sought by the Respondent due to a disputed issue in the claim.

Situations where Respondents may consider filing a Motion for Special Interrogatories are cases where there is a specific issue or dispute requiring further clarification and investigation. Special Interrogatories may be used to obtain critical information of a discovery or factual nature that either party needs to prove its case.

While interrogatories are only allowed without a Motion in dependency, re-opener, and occupational exposure cases, respondents can also file Motion for Leave for Special Interrogatories in other cases, and special interrogatories are under-utilized in New Jersey workers’ compensation. For a client and practitioner, one never wants to start trial without pinning down key facts that could make or break one’s case. Trial by surprise remains a risky endeavor. Practitioners should consider filing Motions for Leave to Serve Special Interrogatories in those cases where there is a factual dispute or issue worth investigating.

While most cases in New Jersey workers’ compensation involve traumatic accidents where interrogatories are not allowed without Motion (and granting of the Motion), consider a situation where the authorized treating physician notes that the injured worker had a skiing accident three years ago in Vermont. In this instance, Respondent should consider filing a Motion for Special Interrogatories seeking further, and specific information, from the injured worker about the prior out-of-state accident, including names and addresses of all treating physicians, the nature of the injury, etc.

Respondent may wish to investigate petitioner’s subsequent/ additional employment, and in that instance, a set of interrogatories could be served seeking information regarding a claimant’s second job, including job duties, earnings, and employment information.

Another example of where special interrogatories would be useful is a situation where there is a dispute over ownership and control of an area. In this instance, interrogatories could be served seeking to obtain deeds and/or tax records and other documents to demonstrate ownership and control, or lack of ownership or control.

In those cases with disputed coverage or policy issues, interrogatories could be served seeking policy documents, cancellation notices, and other documents regarding proper cancellation of coverage.

The ultimate goal with filing a Motion for Leave to Serve Special Interrogatories is to obtain a Court Order granting the Motion, and more importantly, having the Order provide that the requested answers to interrogatories be provided within a certain time frame, such as thirty, forty-five, or sixty days. Then, if the answers are not provided within that designated timeframe, Respondent can file an appropriate motion.  Parties and practitioners on both sides should be aware of how important interrogatories can be to centralize the issues.

Turning to those situations where answers to interrogatories are allowed without Motion, we first look at inquiries posed in dependency cases. These inquiries ask the alleged dependent to supply proof of dependency to the decedent, including the manner of relationship between the alleged dependent and decedent, as well as evidence that the decedent’s death was work related. These interrogatories also inquire as to the nature of any financial dependency the alleged dependent had with the decedent prior to the decedent’s passing. Dependency Claim Petitions and filing requirements are subject to N.J.S.A. 34:15-51, which require that a Dependency Claim Petition must be filed within two years of the decedent’s death.

In re-opener cases, inquiries are posed to petitioner regarding any treatment since the entry of the prior Award, including details regarding physicians and the nature of any treatment since the entry of the prior Award. Petitioners are asked to identify any subsequent employment held since the entry of the prior Award, including job duties at any new / subsequent positions. An inquiry is made regarding any new relevant accidents / injuries or claims and any new Awards or settlements. Essentially, these interrogatories are seeking information regarding any new injuries, incidents, or treatment since the entry of the prior Award. It is worth noting that any re-opener application must be filed within two years of the last date of payment made to petitioner, pursuant to N.J.S.A. 34:15-27. If the re-opener application is filed more than two years after the last date of payment or treatment date if treatment is rendered, Respondent should seek a dismissal of the matter pursuant to Section 27.

In occupational exposure cases, a standard set of respondent occupational interrogatories can be found on the NJ Department of Labor’s website, as noted above. In this practitioner’s opinion, the most important inquiry is Number 10: “Set forth the date and circumstances under which the petitioner became aware that the claimed injuries resulted from his employment”. Under N.J.S.A. 34:15-34, a petitioner in an occupational disease claim must file the petition within two years after the date on which the petitioner first knew the nature of the disability and its relation to the employment. For example, if petitioner files an occupational Claim Petition on January 1, 2022, and his response to Inquiry Number 10 states that he became aware of his claimed injuries and their alleged relationship to employment at any time prior to January 1, 2020, Respondent should utilize petitioner’s Answers to seek a dismissal of the claim pursuant to N.J.S.A. 34:15-34. Often, the Answer to Inquiry 10 is something along the lines of, “I became aware of my issues and their relationship to work upon consultation with my attorney”, but if a specific date is noted, Respondent should compare the date listed in Inquiry 10 to the date of the filing of the Claim Petition.

With the increase of COVID-19 cases, this practitioner has seen interrogatories being posed both on petitioners and respondents. Often the interrogatories served by petitioner asks respondent to identify whether petitioner was an essential worker. There is very little guidance on who is an essential employee, so this is actually a complex legal question as proximity to the public is not defined in the Essential Employee Law.

Practitioners should not limit interrogatories to those cases where interrogatories are allowed without Motion, and should consider filing Motions for Leave for Special Interrogatories in cases where further information is needed to flesh out disputed issues.

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Maura Burk, Esq., is a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Ms. Burk concentrates her practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation matters.  If you have any questions or would like more information, please contact Ms. Burk at 856.840.4941 or by e‑mail at mburk@capehart.com.

One recurring question which adjusters and practitioners are often asked is this:   in computing the workers’ compensation lien, does the employee get to reduce the employer’s lien by the amount the injured worker had to pay for costs and expenses in the third party action? Further, does the employee get to reduce the employer or carrier’s lien by the amount the injured worker paid in counsel fees in the workers’ compensation case?

Let’s deal with costs first.   Many third party law suits are complex and require a substantial outlay of funds for depositions, experts and investigation.  When it comes time to repay the workers’ compensation lien, some plaintiffs’ counsel will send the subrogation adjuster a ledger of all expenses paid in the third party case.  Sometimes those costs can amount to many thousands of dollars.

Nonetheless, N.J.S.A. 34:15-40 only allows a reduction in the employer’s lien for costs up to $750.  If the costs are only $300, then $300 is the reduction. But if the costs are well over $750, then the lien is only reduced by a capped amount of $750.   Before the 2007 amendments to N.J.S.A. 34:15-40, the cost cap was only $250!

What about counsel fees in the workers’ compensation case paid by the employee to his or her own attorney?  Let me provide a scenario to make this situation clearer.  Suppose Employer pays $150,000 in workers’ compensation benefits, consisting of $50,000 in medical and temporary disability benefits and eventually $100,000 in permanent partial disability benefits.  In New Jersey the petitioner’s attorney is entitled to a fee of 20% of the gross workers’ compensation award.  So on a $100,000 workers’ compensation award, the legal fee will be $20,000.  Who pays the $20,000 in petitioner’s counsel fee on a percentage award?  The answer is that the employer pays 60% of the injured worker’s legal fee and the injured worker pays 40% of that fee.  In the above scenario, that means that petitioner is paying her attorney $8,000 from her award and the employer or carrier in the workers’ compensation case is paying $12,000 toward petitioner’s attorney’s fee for a total of $20,000.

The third party case settles for $400,000 before the permanency aspect of the case settles.  The attorney in the third party sends a check to the employer for two thirds of $50,000 minus $750 for costs.  That takes care of the lien on the medical and temporary disability benefits.  The statutory costs have also been resolved. The permanency award settles next for $100,000.  Does the employer have a lien on $100,000 or on $92,000.  (Remember, the employee paid her lawyer $8,000 from the $100,000 compensation ward).  The employee may argue that she did not receive $100,000 in the workers’ compensation award and therefore should not have to pay back two thirds of $100,000.  Suppose the plaintiff’s attorney only offers to pay back two thirds of $92,000. Who is right here?

This issue was decided in 2021 in Panckeri v. Allentown Police Department, A-2015-19 (App. Div. March 2, 2021), reaffirmed, (App. Div. August 19, 2022).  While this is an unreported case, the case is useful because the Appellate Division answered this very question head on.  It affirmed the ruling of the Honorable Christopher B. Leitner, Judge of Compensation, who found that the permanency lien is based on the gross award in the compensation case.  So the employer gets back two thirds of $100,000, not two thirds of $92,000.  The Appellate Division said, “We further agree with the judge that had the Legislature intended to include the petitioner’s fees and costs in Section 40, it could have done so through the 2007 amendment or at any other time in the Act’s one-hundred-and-ten-year history.”

The Appellate Division made one other important point based on a prior case called Kuhnel.  It said the employer cannot lien what it paid toward the workers’ compensation counsel fee of petitioner.  In our example above, even though the employer paid $12,000 toward the injured workers’ counsel fee, the employer cannot add that $12,000 to its lien and seek repayment of $112,000 in our scenario above.  The employer’s lien is based on the gross permanency award, which was $100,000 in our scenario.  It is not reduced by what the injured worker had to pay her attorney nor increased by what the employer had to pay toward the legal fee of petitioner’s attorney.

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John H. Geaney, Esq., is a Shareholder and Co-Chair in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.