It goes without saying that an employer cannot adequately investigate or pay workers’ compensation benefits if it has no awareness that an accident occurred in the first place. For over a century, the Nebraska Workers’ Compensation Act has included a requirement that an employee must give notice of an injury to his or her employer “as soon as practicable” before benefits can be awarded. Good v. City of Omaha, 102 Neb. 654, 655-56, 168 N.W. 639 (1918). Indeed, the current codification of the notice requirement is found in Neb. Rev. Stat. § 48-133, but the operative language has not changed: an employee must give notice “as soon as practicable.”

The purpose of the notice requirement is based on the idea that a person who wants to hold another accountable or liable for his injuries must give that person notice of said potential liability. In this way, the statute has always contemplated than an employer is entitled to an early investigation into the nature and extent of the alleged injury so that he may “investigate the facts and preserve his evidence.” Good, 12 Neb. App. at 646, 682 N.W.2d at 727.

Notice is essentially a two-part test. First, the Court must decide as a matter of fact when notice was first provided to the employer. In other words, the Court must first identify what date the employer was aware of a potential work injury. To that, recall that an employee must provide notice of an injury, not merely notice of an accident. Williamson v. Werner Enterprises, Inc. 12 Neb. App. 642, 682 N.W.2d 723 (2004). In addition, while the initial language of the statute discusses that notice must be in writing, oral notice is sufficient if it is shown that the employer has actual notice or knowledge of the injury. Perkins v. Young, 133 Neb. 234, 274 N.W. 596 (1937).

A few additional points to recall in regard to what constitutes sufficient notice. First, the employee must provide notice to the “employer.” Caselaw has clarified that an “employer” includes the employee’s manager, foreman, supervisor, or superintendent. Snowden v. Helget Gas Products, 15 Neb. App. 33, 721 N.W.2d 362 (2006). An employee is not necessarily required to tell the employer that the injury is a result of a work accident. If a “reasonable person” would conclude that the injury is potentially compensable as a result of a work accident, it is the employer’s burden to investigate the matter further. If the employer fails to perform that investigation and that is why it was not aware of a work-related injury, the employer’s failure to investigate will not act as a bar to the employee’s right to benefits. Scott v. Pepsi Cola Co., 249 Neb. 60, 541 N.W.2d 49 (1995).

After the Court factually determines when notice was provided, the second question is whether that notice was given “as soon as practicable” which is a question of law. Risor v. Nebraska Boiler, 277 Neb. 679, 765 N.W.2d 170 (2009). The Nebraska Supreme Court has defined the phrase “as soon as practicable” as meaning “capable of being done, effected, or put into practice with available means, i.e., feasible.” Snowden v. Helget Gas Products, Inc., 15 Neb. App. 33, 721 N.W.2d 362 (2006). Historically, convincing the compensation court to dismiss an employee’s Petition on the basis that notice was not “as soon as practicable” was difficult if the delay was less than five months. This was because of the Nebraska Court of Appeals decision in Williamson v. Werner Enters., 12 Neb. App. 642, 682 N.W.2d 723 (2004). In Williamson,  the Court of Appeals held that an employee’s failure to provide notice of an injury for approximately five months was not “as soon as practicable.”  Following Williams, notice issues were often raised by Defendants, but commonly only when the delay in reporting extended several months.

Fifteen years later, the issue of notice was again before the Court of Appeals in the case of Bauer v. Genesis Healthcare Group, 27 Neb. App. 904, 937 N.W.2d 492 (2019).  At the trial level, Judge Fitzgerald dismissed Bauer’s Petition noting that his delay of 39 days before giving notice was not “as soon as practicable” under § 48-133. On appeal, the Court of Appeals affirmed the dismissal. In the decision, the Court cited Larson’s treatise on workers’ compensation law which stated: “The purposes of the notice requirement are first, to enable the employer to provide immediate medical diagnosis and treatment with a view to minimizing the seriousness of the injury; and second, to facilitate the earliest possible investigation of the facts surrounding the injury.” Citing 7 Arthur Larson & Lex K. Larson, Larson’s Workers’ Compensation Law § 126.01 (2003).  The Bauer Court continued, “the question is not about how many days, weeks, or months elapse from the time of the injury until the reporting date, but whether the claimant reported the injury ‘as soon as practicable’ under the specific facts and circumstances of this case.”

Since the Bauer decision, notice arguments have been on the rise in the compensation court, and the recent trial decisions confirm these arguments are successful more frequently than they were even five years ago. With the right facts, employers can and should allege that an employee failed to give notice of an injury as soon as practicable.

To successfully argue there is a lack of timely notice, an employer should first understand the employee’s anticipated testimony regarding when he or she claims notice was provided. As Judge Martin pointed out, “Resolution of the notice defense rests primarily on the credibility of the plaintiff. Various factors go in to this determination including … corroboration of his statements from the evidence offered by the parties.” Espinoza v. Reiman Corp., 2015 WL 5566477 (Neb. Work. Comp. Ct.) (J. Martin). More often than not, an employee will testify that he or she gave timely oral notice of an injury and that his or her supervisor failed to investigate further. Indeed, it’s only on rare occasions that an employee admits he failed to provide notice of an injury. See Settje v. Walmart Associates, Inc., 2021 WL 4202842 (Neb. Work. Comp. Ct.) (J. Fridrich).

More commonly, an employer needs to present evidence to discredit the employee’s testimony that notice was timely provided. This evidence can be presented in a number of different formats. For example, an employer should call the supervisor or manager that the employee alleged she gave notice to (assuming the manager actually does dispute that testimony). Other evidence the Court found relevant to a notice dispute includes:

·         Statements made by plaintiff to medical providers on intake forms admitting he had not reported his accident to his employer;

·         Evidence the employee continued to work full duty without missing work and without any noticeable issues;

·         Confirmation that Plaintiff was not working on the day he allegedly gave notice; and

·         Documents showing the Plaintiff submitted his medical bills to his personal health insurance despite having prior workers’ compensation claims where his treatment was paid by the employer

After developing evidence regarding the factual question of when notice was provided, an employer should take additional steps to determine whether that notice was given as soon as practicable. Employees often put forth two arguments to convince the Judge that the delay in reporting was still as soon as practicable. In Klausen v. Commonwealth Electric Company, 2021 WL 880880 (Neb. Work. Comp. Ct.), Judge Hoffert held that a delay of 21 days was reasonable because the employee testified that he thought his injury would get better. After feeling like he had given it “adequate” time to heal on its own, the employee provided notice to his employer immediately thereafter. Judge Hoffert felt that testimony was consistent with claimant’s reports to his medical providers and therefore, he opined that a delay of 3 weeks was not untimely even under Bauer. Alternatively, relying on historic caselaw, employees also push the Court to find that delays of less than five months are still not “untimely.” See Reimers v. Rosens Diversified, Inc., 2021 WL 1514033 (Neb. Work. Comp. Ct.)(J. Block)(holding a delay of 13.5 weeks was not untimely). To contradict this argument, an employer should rely on the language in Bauer discussing the purpose of the notice requirement – to give the employer the chance to “investigate the facts and preserve his evidence.” Good, 12 Neb. App. at 646, 682 N.W.2d at 727.  In some cases, a delay of only a few days may very well not be “as soon as practicable.”

An employer should never underestimate the importance of the notice requirement. Even a lack of notice for a week or two may not be “as soon as practicable” with the right supporting facts. Likewise, it cannot be emphasized enough that lack of timely notice may be relevant to other issues in the claim including whether an accident even occurred, or the claimant’s overall credibility. The current trend in the compensation court decisions certainly indicates that notice issues are becoming a hotly contested issue, and therefore warrant careful consideration by adjusters and defense attorneys alike.

If you have questions about a potential notice issue, please contact any of the lawyers at CPW by phone or email. Want to ensure you don’t miss out on the next post in the CPW compendium series? Be sure to subscribe to our newsletter.

On the corner of my desk sits a coffee cup that reads: “A good lawyer knows the law; a great lawyer knows the Judge.” At first blush, the cup is just meant to garner a laugh or two. For those of us who practice Nebraska workers’ compensation law, however, the quote has a more practical meaning.

If you’re familiar with the work comp system in Nebraska, you know that there are only seven Judges appointed to hear all disputes that arise under the Nebraska Workers’ Compensation Act. With a work force population of just over 1,022,000, it’s no secret that the seven Judges are certainly kept busy. In 2020 alone, there were over 119 workers’ compensation trials. Each trial resulted in a written decision where the Judge was tasked with applying the law to facts. This is in addition to the hundreds of motion hearings that the Judges heard.

Compare these numbers to the only 20 workers’ compensation related opinions that were released by the Nebraska Court of Appeals and Supreme Court in 2020. It doesn’t take a scientific calculator to see that there are drastically more trial court decisions every year than there are appellate level decisions. So why is this significant, and what does my coffee cup have to do with this? Ponder this: suppose a lawyer only reads the appellate court decisions that come out every year. There’s no disputing it’s important to read those cases – after all, law established by the Nebraska Supreme Court, or the Court of Appeals is in fact “stare decisis” and is therefore binding law. But contained in the 119 trial court decisions is equally (if not more) valuable information. Contained in those 119 trial court decisions are the thoughts, opinions, and legal interpretations of the only seven people who decide workers’ compensation cases. While all seven of the workers’ compensation judges are tasked with holding plaintiffs and defendants to the same statutory law, that doesn’t necessarily mean the judges are perfect clones who handle and evaluate their cases in the same exact way. It can and frequently does happen that the judges dispute how a particular statute should apply, or what exactly is binding case law. How Judge Fitzgerald interprets Form 50 rules may not necessarily be the same as Judge Martin or Judge Block. Indeed, how Judge Hoffert interprets the Supreme Court’s holding in Picard v. P&C Group 1 may differ from Judge Fridrich’s interpretation of the exact same case. And that’s how it clicks: A good lawyer knows the law; a great lawyer knows the thought process of the judge who will ultimately apply it.

After researching, reading, and studying every single trial level decision written over the last several years, it’s time to share the wealth of that information with you. Written for lawyers, adjusters, employers, or even just the lay person who wants to learn more about workers’ compensation law in Nebraska, the CPW Compendium series is meant to be a tool to help educate others about the patterns being seen at the trial court level. While trial court decisions may lack the fanciness of being “stare decisis,” make no mistake that knowing your judge is one of the most valuable tools a Plaintiff or Defense attorney can and should have before ever evaluating or trying a case. After all, being a good lawyer is merely knowing the law. Being a great lawyer is knowing the judge who applies it.

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Coverage Issues in Workers’ Compensation

A common issue arises where an employee works for an employer who does not maintain proper workers’ compensation coverage and alleges that there is a general contractor with coverage from whom they will seek benefits. As noted in our recent article, https://njworkerscompblog.com/how-to-properly-cancel-a-workers-compensation-policy/, claims that are denied for lack of coverage based on a cancelled policy often result in ongoing litigation regarding issues related to whether the policy was cancelled effectively. In these cases, the claimant’s counsel will often seek to bring any potential entity with whom the petitioner’s employer worked with and argue that they are liable for benefits as a “general contractor.” Therefore, an issue that can be simultaneously tried in connection with whether a policy was appropriately cancelled is whether there is a liable entity pursuant to Section 79.

Section 79 of the Workers’ Compensation Statute provides for penalties to employers who fail to carry workers’ compensation insurance but also provides a pathway for liability to a general contractor when a subcontractor they work with does not have coverage. The language of Section 79 provides:

Any contractor placing work with a subcontractor shall, in the event of the subcontractor’s failing to carry workers’ compensation insurance as required by this article, become liable for any compensation which may be due an employee or the dependents of a deceased employee of a subcontractor. The contractor shall then have a right of action against the subcontractor for reimbursement.

N.J.S.A. 34:15-79. The purpose of the foregoing is to protect the employee by permitting him to recover from a general contractor who gets direct benefit of the employee’s work.

In order for Section 79 to apply, three essential elements must be met: “(1) a contractor, (2) a subcontractor, and (3) failure by the subcontractor to carry workman’s compensation insurance.” Gaydos v. Packanack Woods Development Co., 64 N.J. Super. 395, 399 (Cty. Ct. 1960). “A contractor is ‘[o]ne who formally undertakes to do anything for another; specifically, one who contracts to perform work, or supply articles.” Jordan v. Lindeman & Co., Inc., 23 N.J. Misc. 194, 196 (Cty. Ct. 1945). A subcontractor is noted to be “one who enters into a contract with a person for the performance of work which such person has already contracted with another to perform. In other words, subcontracting is merely ‘farming out’ to others all or part of work contracted to be performed by the original contractor.” Brygidyr v. Rieman, 31 N.J. Super. 450, 454 (App. Div. 1954).

The foregoing criteria are highly fact sensitive and will often result in a number of fact witnesses testifying as to the issue of whether there was a general contractor/subcontractor relationship. As a result, some of the following examples provide guidance to litigants.

In Pollack v. Pino’s Formal Wear & Tailoring, 253 N.J. Super. 397 (App. Div. 1992), Pino’s Formal Wear decided to expand their business and have an extension put on their building to add dry cleaning services. Pino’s Formal Wear arranged for the co-respondent, Ernest Polgardy, to purchase the dry-cleaning machinery and to have the machinery installed. The decedent-employee was hired by Ernest Polgardy to install burners and to hook up the machines. The decedent-employee fell from a ladder and was injured. He ultimately passed away shortly thereafter from a number of conditions related to alcohol withdrawal and liver failure. The petitioner-dependent argued that that due to the decedent-employee’s fall, he was not able to drink which resulted in liver failure and death.

The petitioner-dependent filed claim petitions against Pino’s Formal Wear alleging that Pino’s Formal Wear was liable for benefits as the general contractor and that Ernest Polgardy, his direct employer, was an uninsured subcontractor.  The Appellate Division found that Pino’s Formal Wear was not a general contractor within the meaning of N.J.S.A. 34:15-79. It noted that Pino’s Formal Wear relied upon Ernest Polgardy’s skill and knowledge to purchase and install the dry-cleaning machinery with no restrictions placed on Ernest Polgardy. The relationship between Pino’s Formal Wear and Ernest Polgardy was that of owner and contractor, not general contractor and subcontractor. Therefore petitioner’s claim was dismissed.

In Brygidyr v. Rieman, 31 N.J. Super. 450 (App. Div. 1954), the petitioner was injured while washing windows for a building that was owned by Respondent Schwaben Halle. The petitioner filed claim petitions against Schwaben Halle and Federal Window Cleaning Company as an alleged uninsured subcontractor. The petitioner testified that he was regularly employed by another company but that in his free time he worked for Federal Window Cleaning Company and that on their instructions he was washing the windows of Schwaben Halle. Schwaben Halle, however, asserted that it was a cultural and singing society which owned and operated the building. The Appellate Division found that under these circumstances, Schwaben Halle could not have been a contractor and that “the washing of windows was not in the line of Schwaben’s regular business, and the contention that it had contracted to keep the windows clean is without merit… To hold otherwise would mean that any property owner who contracted for services would be liable for injuries sustained by the contractor’s employees.” Id. at 453-54.

In a more recent matter involving an action in the Superior Court filed by the carrier asserting that an employer withheld material information about its operations and use of subcontractors and thereby underpaid its workers’ compensation premiums, the Appellate Division affirmed the trial court’s order of the policyholder to pay the carrier additional unpaid premiums, plus interest, costs, and counsel fees in the amount of $145,231.00. In Fournier Trucking, Inc. v. New Jersey Manufacturers Ins. Co., No. A-1353-18T2, 2020 WL 1802840 (App. Div. Apr. 9, 2020), certif. denied, 244 N.J. 161 (2020), the trial court found that the employer-policyholder, a freight company that facilitated the transport of goods, was liable under N.J.S.A. 34:15-79 to provide workers’ compensation coverage for the employees of uninsured motor carriers it used for hauling of shipments to its customers. The Appellate Division noted that customers hired the employer-policyholder “to consolidate and transport goods; Fournier Trucking consolidates the goods itself, and then subcontracts with the carriers to perform the transportation. Therefore, Fournier Trucking is a contractor, and the carriers it uses to fulfill part of its contracts with shippers are subcontractors.” Id. at *12.

The policyholder-employer attempted to argue that the carriers it contracted with are independent contractors and therefore are not liable for workers’ compensation benefits. However, “to the extent that the carriers maintain employees, those carriers are statutorily obligated to maintain workers’ compensation coverage, as is any other employer within the state. By operation of N.J.S.A. 34:15-79(a), to the extent those carriers fail to satisfy their statutory obligation, Fournier Trucking, as the general contractor, is obliged to provide benefits to any carrier employee who suffers an injury while providing services under Fournier Trucking’s general contract. Ibid. In discussing the argument that the carriers were independent contractors, the Appellate Division stated that “a company can choose to use its own workers to carry out its responsibilities, or it can retain independent companies who may also qualify as subcontractors to discharge some of those tasks. When it does the latter, the law of our State requires the contracting company to assure that the subcontractor’s employees have adequate workers’ compensation insurance.” Id. at *14.

The issue of Section 79 liability for alleged general contractor/subcontractor disputes involve the various parties exchanging information regarding the petitioner’s work, the work site or assignment wherein the petitioner was injured, and investigation into any and all entities who were involved in the business which was related to the petitioner’s work. Carriers should perform initial investigation with their insureds regarding any possible subcontractors that they work with and claimant’s counsel should investigate with their client any information they may have regarding their work. Readers with questions regarding issues related to coverage and potential general contractor liability can reach the undersigned at knagy@capehart.com.

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Keith E. Nagy, Esq., is a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Nagy concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation matters. Should you have any questions or would like more information, please contact Mr. Nagy at 856.840.4928 or by e‑mail at knagy@capehart.com.

By:  Edward Hummer (Associate Attorney - Santa Rosa)

On March 21, 2022, the California State Senate's Committee on Labor, Public Employment and Retirement voted  4 - 1 to advance SB 1127, authored by Sen. Toni Atkins (D - San Diego). If passed, this bill would amend Labor Code Section 5402 to shorten the time within which to investigate a claim from 90 days to 60 days. If a claim is not denied within 60 days, it would be presumed compensable. The amendment would further reduce the investigation time for claims involving safety officer presumptions (Labor Code Sections 3212 through 3213.2) to 30 days. 

The bill would also amend Labor Code Section 4656 to provide first responders covered by the Labor Code Section 3212.1 cancer presumption with additional temporary disability benefits. The proposal would provide covered employees with up to 240 weeks of aggregate disability benefits for injuries occurring on or after 1/1/2023. 

Particularly concerning to employers and claim administrators is a provision in the bill that would add Section 5414.3 to the Labor Code. This proposed section would impose a penalty for "unreasonably" denying first responder claims subject to the Labor Code Section 3212 through 3213.2 presumptions. The penalty would be five times the amount of the benefits "unreasonably delayed", with a $100,000.00 cap. The determination of whether a claim denial was "unreasonable" would be left to the WCAB. 

A similar proposal introduced in the California Assembly in 2021 died in committee. The 2021 proposal was evaluated by the CWCI and the RAND Corporation. Both evaluations determined that shortened investigation times and faster claim decisions did not meaningfully assist workers and may actually lead to more provisional claim denials. 

The legislation is opposed by a coalition of business interests including the Family Business Association. The opponents argue that the legislation does not provide sufficient time to investigate claims, creates new penalties that make taxpayer funded presumption claims dangerous to investigate, and increases costs because it more than doubles temporary disability benefits. 

The next hearing on the proposed legislation went forward on April 4, 2022 in the Senate Appropriation Committee. 

Learn more here:  https://highlights.hannabrophy.com/post/102hlsf/committee-approves-proposal-to-shorten-investigation-time-for-workers-compensatio

Written by: Lindsay Underwood

The North Carolina Court of Appeals issued a new decision concerning medical treatment, and what evidence is necessary to prove causation and establish compensability.

In Mahone v. Home Fix Custom Remodeling, the claimant worked for a home remodeling company. On July 24, 2018, the claimant climbed into the attic of a potential customer to take measurements for an estimate and the floor beneath him collapsed. The claimant fell twenty feet and landed in the staircase area of the lower level of the home. He suffered severe injuries to his cervical and thoracic spine, and fractured ribs on his left side. When EMS responded to the injury, the claimant was unconscious. The claimant underwent an immediate surgery for his spinal injuries. Following surgery, a cognitive screening and mental assessment was completed to evaluate for a possible traumatic brain injury (TBI). It was determined inpatient neuropsychological services were not warranted, though the claimant was provided with verbal and written information regarding treatment for a mild TBI. On November 2, 2018, Dr. Lance Goetz wrote a letter stating the claimant was hospitalized and under his care. In that letter, Dr. Goetz stated the claimant had incurred a traumatic brain injury with loss of consciousness. Dr. Goetz was not deposed as part of the case, and the physician who was deposed did not provide an opinion on the TBI or causation either in his records or during his testimony.

Defendants denied the claim on the basis that there was no employer/employee relationship. At the Deputy Commissioner level, the main issues presented were whether the claimant was permanently and totally disabled, and what attendant care the claimant was entitled to. Following the hearing, Defendants accepted compensability of the spine, rib fractures, and hematoma of the parietal bone. The TBI was not accepted. The Deputy Commissioner found that claimant had failed to present evidence regarding how many hours per day he required attendant care, or the appropriate rate of care. Further, it was not yet possible to determine whether the claimant met the requirements for permanent total disability. The claimant appealed to the Full Commission. The Commission entered an Opinion and Award finding the claimant had not presented sufficient medical evidence of causation linking his TBI to the July 24, 2018 incident, and, thus, the claimant was not entitled to medical compensation for the treatment of his TBI. The Commission found the claimant required attendant care but there was insufficient evidence in the record on which to base such an award. Both parties appealed to the Court of Appeals.

The Court ultimately found the Commission applied the incorrect legal standard in denying that the claimant’s TBI was not compensable. The Court opined the Commission erred in stating that the claimant was required to present expert testimony, either at a hearing or deposition, to a reasonable degree of medical certainty, that the TBI was causally related to the accident. The Court held the appropriate standard is that the claimant is required to present expert opinion evidence, not necessarily in the form of testimony, that it is likely that the accident caused the claimant’s injury. Thus, the letter written by Dr. Goetz in which he opined that the claimant’s TBI was likely the result of his July 24, 2018 incident was sufficient to establish causation. The Court reversed the Commission’s Opinion and Award with respect to the compensability of the claimant’s TBI and remanded to the Commission to make findings and conclusions applying the correct standards of proof.

Implications for Defendants

Though we do not have the final decision on remand, this case is a good reminder that if you want to contest compensability or causation of a specific aspect of the claim, you must have evidence to combat the claimant’s evidence, even if said evidence is in the form of a letter or a medical record. In this case, it was likely assumed that since Dr. Goetz did not testify, and did not provide an opinion specifically to a reasonable degree of medical certainty, that his causation opinion would not be sufficient. The Court of Appeals clearly disagreed, and specifically noted that testimony is not required by the Court to establish causation. All that is necessary is opinion evidence. In the event you are presented with a medical report or correspondence from a physician, in which it appears causation is established, even if not to a reasonable degree of medical certainty, it is a necessary next step for defendants to obtain counter evidence, and take deposition testimony of both the claimant’s physician, and any IME or 2nd opinion physician, to support the defense.

There are few cases in the Division that discuss penalties for late payments of permanency awards, so the recently published Appellate Division decision in Ripp v. County of Hudson, No. A-2972-20 (App. Div. June 3, 2022) should be studied by workers’ compensation practitioners.

The Ripp case was not about delayed temporary disability benefits, which are subject to a potential 25% penalty for delays over 30 days.  This case was about a delay in paying a permanency award on a total disability claim. On January 26, 2021 the Judge of Compensation entered an Order for Total and Permanent Disability.   The County was required to pay Ripp the sum of $173,480 for accrued permanency benefits within 60 days of the entry of the Order followed by weekly benefits for life. The County failed to pay the Order within 60 days. The County made the payment on the 76^th day after the award, a delay of 16 days.   

Ripp filed a motion to enforce the Order.  He sought simple interest on the settlement and an additional assessment of 25% of the moneys due.  The County explained that delays were due to the failure of the third party administrator to submit the payment request in a timely manner, changes in adjuster assignment on the case, and delays due to the pandemic.

There were also substantial delays before the Order was entered in terms of the County’s formal approval of the total disability award.  Ripp and his wife wrote to the judge to complain about how long it was taking the County to get authority to settle the case.  The Judge of Compensation noted that the delays had a severe effect on the family, which had no wages for four years. This also had an impact on the couple’s disabled child.  Although the County had agreed in early 2019 that Ripp was totally disabled, authority did not come through for many months.  The Judge of Compensation noted that the failure of the County to obtain authority further delayed the computation of Ripp’s “average current earnings” calculations from the Social Security Administration. That information was necessary to complete the final court paperwork.

In deciding the appropriate penalty, The Judge of Compensation considered the delays in getting approval for the settlement as well as the 16-day delay in paying the final Order.  The judge relied on N.J.A.C. 12:235-3.16 in assessing against the County an additional 25% of the accrued payment amount due or $43,370.  The County appealed.

The Appellate Division began by stating, “The Workers’ Compensation Act does not require that payment of settlement benefits must be made within a specific period of time.”  Yet N.J.S.A. 34:15-28 (cited by the Court) states: 

Whenever lawful compensation shall have been withheld from an injured employee or dependents for a term of sixty or more days following entry of a judgment or order, simple interest on each weekly payment for the period of delay of each payment may, at the discretion of the Division, be added to the amount due at the time of settlement.

Practitioners generally advise clients that all permanency awards must be paid within 60 days.   The Court also observed that N.J.S.A. 34:15-28.2 provides:

If any employer …. Fails to comply with any order of a judge of compensation ….. a judge of compensation may, in addition to any other remedies provided by law:

a) Impose costs, simple interest on any moneys due, an additional assessment not to exceed 25% of moneys due for unreasonable payment delay, and reasonable legal fees, to enforce the order, statute or regulation;

b) Impose additional fines and other penalties on parties or counsel in an amount not exceeding $5,000 for unreasonable delay, with the proceeds of the penalties paid into the Second Injury Fund;

The New Jersey Division of Workers’ Compensation added N.J.A.C. 12:235-3.16 (h) (1) (i) which allows a judge to “impose an additional assessment not to exceed 25 percent on any moneys due if the judge finds the payment delay to be unreasonable.”

There are two key parts to the Appellate Division decision in the Ripp case.  First, the Appellate Division fully endorsed the Judge of Compensation’s right to assess a 25% penalty in this case.  Second, the Court clarified that only the 16-day delay could be considered for the penalty.  The Court did not endorse any penalty for failure to obtain authority in a timely manner. The Court requested that the Judge of Compensation reconsider an appropriate penalty “for the minimal, yet ‘unreasonable payment delay’ in this case.”

For practitioners, this decision is a strong reminder that awards must be paid within 60 days, notwithstanding the statement in this decision that the New Jersey Act does not prescribe a specific time period to pay an award.  The practice in place in all insurance companies, third party administrators and self-insured entities is to make sure awards get paid within 60 days. 

This case sends a message that if a motion to enforce is filed, the employer will pay not only simple interest but also potentially 25% on the total amount due – depending on how long the delay is.  While the Appellate Division made clear that it thought a penalty of $43,370 was too high for a 16-day delay, the Court did not provide guidance on what amount was too low.  The case has been remanded to the Judge of Compensation to reconsider a new penalty amount on the County. 

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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.

What happens if an employee dies during the pendency of the open and ongoing workers’ compensation claim? The answer to this depends on a few factors. The first consideration is when the petitioner died (during treatment/ before permanency exams, after permanency exams, or after an Order Approving Settlement for permanency has been entered). The second consideration is whether the cause of death is, or is not, work related.

Below are various potential situations regarding dependency/ death cases, and how we would recommend handling each scenario.

Scenario 1: Petitioner dies from a cause not related to his workers’ compensation injury while he is under authorized treatment. Permanency exams have not yet occurred on either side. Who gets paid benefits, and what type of benefits are they owed?

It is our general position in this scenario that all that is owed is a contribution to funeral expenses as set forth in N.J.S.A. 34:15-12(e) (up to $5,000). In almost all cases like this, it is difficult for a petitioner to prove permanency without permanency examinations.

There are exceptions of course. In certain circumstances (such as a case involving a truly catastrophic accident), permanency could possibly be assessed without permanency exams, but these circumstances are quite rare. In most cases, permanency cannot be assessed without permanency exams where the employee is examined and provides their current complaints.

Since permanency benefits are based on current complaints as provided to permanency experts and testimony or a settlement affidavit, it is difficult to assess permanency without permanency exams on both sides having occurred, and without current complaints given to permanency experts. Generally, permanency cannot be attributed in a case where petitioner was under ongoing authorized treatment when he passed away.

We generally maintain that an employee is not entitled to permanency if the employee was still in treatment and had not medically plateaued, since he cannot sustain his burden of proof that he sustained permanency from the work accident.

Case Study/ Example: Logan is treating for a work-related tendinopathy condition. Treatment is progressing with physical therapy. Logan dies from a non-work related motor vehicle accident halfway through physical therapy. Does the employer owe permanency? No, because there is no way to prove permanency. Who could say that Logan would have had permanency when treatment was not even finished?

Scenario 2: Petitioner died from a cause not related to his workers’ compensation injury after permanency exams have occurred. Who gets paid benefits, and what type of benefits?

The difference between Scenario 1 and Scenario 2 is that in this scenario, permanency can be reasonably assessed and negotiated, based on the permanency exams that have occurred on both sides and the expert reports. Therefore, in this case, permanency can be assessed and negotiated between the parties.

Pursuant to N.J.S.A. 34:15(12)(e), when an employee dies from a non-work related cause after permanency exams, permanency payments are paid to the decedent’s dependents.

This is supported by the case law of Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326 (1962), where the parties both obtained permanency reports with both experts assessing disability.

Scenario 3: Employee dies during the course of authorized treatment due to the work-related incident, and the work accident is the cause of death.

First, we note that a dependency claim can be filed when death is caused directly or indirectly from a work injury and it does not have to be the sole or primary cause of death.  As long as the work accident is a contributing cause, there can be a valid dependency claim. Also of note is the statutory time period in which a dependency claim must be filed under N.J.S.A. 34:15-51, which states that a claim must be filed within two years of the date of the accident. In a dependency claim, the dependency claim petition must be filed within two years from the date of death.

The compensation to a dependent (once the individual is determined to be a dependent, subject to N.J.S.A. 34:15-13(f)) is based on 70% of the employee’s wages at the time of death.

Dependency interrogatories should be served on any individual filing a dependency claim petition, to investigate the nature or the relationship between decedent and potential dependent and to confirm that the individual qualifies as a dependent as defined by Section 13. Employers should obtain a copy of the autopsy report and death certificate. Information should also be obtained regarding decedent’s treating physicians.

Scenario 4: Employee dies after an Order Approving Settlement is entered.

After an employee passes away, the remaining permanency payments are paid to the dependents. Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326 (1962), referenced above, holds that any permanency benefits that were accrued but not yet paid at the time of death become part of the estate.

But ongoing un-accrued permanency benefits owed to an employee after the date of death are paid to dependents. An individual has no “dependents” until after he has passed away.

Case Study/ Example: Joan gets an Award of 15% permanent partial disability on January 1, 2022. The date of last temporary disability benefits was January 1, 2021, so one year of accrued permanency benefits exists. Joan’s accrued permanency benefits are paid over 90 weeks. Joan dies on January 2, 2022 from a non-work related cause. Who gets the permanency Award? The estate gets the portion of the accrued amount for the dates of January 1, 2021 through January 2, 2022. The statutory dependents get the future payments due after January 2, 2022.

Employers must always keep in mind when and how an employee passes away, to determine potential exposure, and the type of benefits that may be owed, and to whom the benefits might be owed.

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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.

Well, we don’t know yet. The position has remained unfilled since September, 2021 when Commissioner Cassie Brown left to accept Governor Abbott’s appointment as Commissioner of Insurance, a position that itself had been vacant since September 2020, following Commissioner Kent Sullivan’s resignation to return to the private sector. 

So after nine months, we wonder when a new Commissioner will be appointed to guide the Division into the future…although we must say that the Division seems to be humming along just fine without one.
 

Copyright 2022, Stone Loughlin & Swanson, LLP 

In response to our firm’s Public Information request, the Division has produced its records of activity by the Appeals Panel during 2021. In this past year, the panel has resolved 2,108 appeals, up 132 cases over the 1,976 appeals resolved in 2020.

Lest you wonder how six judges could possibly handle and resolve so many appeals, let us look a bit closer at the numbers.  

Of those 2,108 appeals resolved, 2,005 became final by operation of law as a result of the Appeals Panel taking no action and allowing the ALJ’s Decision and Order to become the final decision of the Division.

Using a calculator so as not to rely solely on our imperfect math skills, we note that the Appeals Panel wrote decisions in only 103 cases, up significantly from the 60 decisions written in 2020, but still an average of only two decisions per week.  

Of those 103 Appeals Panel Decisions, eight affirmed all issues and 95 reversed and/or remanded issues back to the ALJ. So, in 2021, the odds that the panel would reverse or remand any given Decision and Order were about 4.5%, up from 1.97% the previous year.

Copyright 2022, Stone Loughlin & Swanson, LLP