State News : New Jersey

In the past few years there has been a rise in the number of cases where injured workers have been loaned money in advance of their workers’ compensation settlements by private pre-settlement companies.  This practice is more common in other states like Pennsylvania, but it is now creeping into New Jersey.  Companies which make private advances or loans to injured workers then attempt to appear at settlement and seek judicial enforcement of the amount due their company by placing their company’s loan on the settlement sheet.  In that way, the lending company can obtain a court order for direct payment by the employer, carrier or third party administrator.

In our office’s opinion, this recognition on the order approving settlement is improper.  We believe that pre-settlement companies have no right to be listed as an expense or payee on a court order, whether on a Section 20 or an Order Approving Settlement.  One of my partners has a case now involving a Pennsylvania resident injured in New Jersey who was advanced a large sum of money by a pre-settlement company unknown to any party other than petitioner and his attorney.  The claim petition was filed in New Jersey, and the parties have reached a substantial settlement on an order approving settlement under Section 22 (petitioner retains reopener rights).  The lawyer for the pre-settlement company appeared in court, asking the Judge of Compensation to include the loan as an expense to be paid by respondent on the order approving settlement.  We opposed this request.

N.J.S.A. 34:15-29 states, “Claims or payments due under this Chapter shall not be assignable, and shall be exempt for all claims of creditors from levy, execution or attachments.”   Child support liens and TDB liens are recognized as valid obligations in New Jersey.  Medical providers by statute also have a right to file a claim for reimbursement in New Jersey.  However, there is nothing in the statute or the rules of the Division that permit pre-settlement companies from appearing in court as a represented party to protect their loans or seek enforcement from a Judge of Compensation.

The Division of Workers’ Compensation has an interest in preventing such companies from expanding in New Jersey.  These companies do not make such loans out of charity:  they do so for reasons of financial gain at the expense of the injured worker.  One could argue that the whole practice of advancing a settlement with an injured worker in exchange for subsequent repayment violates the New Jersey Workers’ Compensation Act because under our law, only a Judge of Compensation can approve a settlement.  These are in essence private partial settlements between a lending company and petitioner as to future rights of compensation. They really constitute an end around the statute.

Another argument against placing a loan on an OAS is that it contravenes the rules against commutations.  An employer cannot make a commutation in New Jersey without filing a motion and obtaining court permission.  Paying a lending company in advance on unaccrued monies would be an illegal commutation without a motion for a commutation being first filed by the petitioner.  In New Jersey, most settlement are under Section 22.  Payments are made in weekly amounts, sometimes over several years, with claimants retaining reopener rights.  Pre-settlement lending companies have no right to step in and alter the statutory rules of payment.   Settlements in Pennsylvania and many other states involve lump sums, often rather large, but that is not how most settlements in New Jersey resolve.

Our office takes the view that all payments go to the petitioner under the Order Approving Settlement or Section 20 order.  This is prescribed under N.J.S.A. 34:15-64. The pre-settlement company has its contract with the petitioner and the petitioner only, and it must negotiate its terms of repayment directly with the petitioner without involving employers, carriers, third party administrators or Judges of Compensation.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

The case of Billups v. Emerald Coast Utilities Authority, 33 AD Cases 1312 (11^th Cir. October 26, 2017) presented a challenge by an injured employee to his company’s six month limitation of leave.

Mr. Billups injured his shoulder on December 18, 2013 doing his work as a Utility Service Technician II. He felt a pop in his shoulder while opening an air-release valve.  The case was accepted by the workers’ compensation carrier.  Billups’ job was a very physical one, requiring use of heavy tools such as a jackhammer.  He began FMLA leave on December 19, 2013.

After several months of physical therapy, Billups was referred on February 11, 2014 to an orthopedic surgeon, who scheduled Billups for a shoulder procedure.  That surgery had to be postponed due to Billups’ reaction to anesthesia.  The surgery finally took place on April 16, 2014.  Billups’ 12 weeks of FMLA expired on March 14, 2014, but the company policy granted 26 weeks of leave for work injuries.

Following surgery, Billups was informed by his doctor that it would likely take six months for his shoulder to recover to the degree that he could perform the essential functions of the job.  The need for Billups to return to work became more acute on April 30, 2014 when the county was struck by severe flooding damage to the water and sewer infrastructure.  Personnel were stretched trying to cope with the flooding.

On May 27, 2014, the surgeon signed a workers’ compensation form stating Billups was restricted to sedentary duty alone.  The company sent Billups a notice in early June 2014 that he would be terminated if he could not return to full duty by June 18, 2014, which was the end of his six month period of leave.  Billups was offered a predetermination hearing, which he attended.  Billups argued at the hearing that his surgery was delayed due to an uncontrollable health reaction to anesthesia.  Emerald Coast gave Billups one day to obtain a more definitive statement from his doctor regarding his full-duty return to work date.

The very next day Billups produced a note from his physical therapist stating that he could return to work full duty after he completed physical therapy.   But the anticipated discharge from PT was not until July 21, 2014.  Billups was not able to get a doctor’s note saying he could return to full duty on July 21, 2014.  On June 23, 2014, the company notified Billups that he was fired.  The company noted that his continued absence from work was creating a hardship on the company.

It turned out that Billups did not get discharged from PT until August 13, 2014.  He was not cleared by his doctor to return to work full duty until October 23, 2014.  Even when the doctor cleared Billups to return to work, it was with a limitation of no lifting more than 20 pounds overhead and working with his arms close to his body.

Billups filed a law suit against his employer for failing to provide a reasonable accommodation.  The district court ruled for the employer and dismissed the case.  The court said that “Billups had not identified a reasonable accommodation that would allow Billups to perform the essential functions of the job.”

Billups appealed to the United States Court of Appeals, 11^th Circuit, and argued that a short period of leave would have been a reasonable accommodation under the ADA.   The Court said, “Billlups has not shown his requested accommodation would have allowed him to return to work ‘in the present or in the immediate future.’” The Court added,  “But an accommodation is unreasonable if it would only allow an employee to ‘work at some uncertain point in the future.’”  The Court added:

As Billups foreshadowed at the hearing, his physician in mid-July 2014 limited him to lifting no more than twenty pounds overhead and advised him to complete all work with his arms close to his body.  According to Dawson (Department Director), those limitations would have prevented Billups from performing the essential functions of the UST-2 position.  Although Billups believed he could perform the job with those limitations, his testimony reflects that he could only perform ‘most’ of the work, but not all of it.  And even a ‘relatively infrequent inability to perform a job’s essential functions is enough to render a plaintiff not a ‘qualified individual’ under the ADA.

The Court interpreted Billups’ request for additional leave under the ADA as a request for indefinite leave.  Virtually all courts have held that requests for indefinite leave are not reasonable.

The Court also rejected Billups’ argument that Emerald Coast’s six-month leave policy for work-related injuries violates the ADA because, according to Billups, it does not consider individual circumstances.  The Court commented, “While Emerald Coast’s policy provides, as a general rule, six months for an employee who suffered an on-the-job injury to return to employment, it also expressly incorporates an individual assessment of the employee’s ability to work.”  The Court noted that the Department Head in consultation with HR may extend time past six months in certain circumstances.

This case is helpful because it focuses on a situation where the request for additional leave was actually for a rather short period of time, perhaps a month or two, just until PT finished. Yet, the employer correctly considered this as a request for indefinite leave because there was no expectation that the employee would be able to return to full duty even with the additional leave being granted.  The Court of Appeals concluded that just because the request for leave was short in duration, that fact alone does not make it reasonable if the employee cannot show he or she would be able to return to work and perform all the essential job functions.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

It is challenging for a petitioner to relate an increase in disability or need for treatment to a relatively modest award that has remained unchanged for over a decade.  That was the situation in Batts v. Flag House, A-5616-15T4 (App. Div. January 16, 2018).   The case involved an award of 50% disability of the right foot and 10% psychiatric disability going back to 2003.  Petitioner was originally injured on April 2, 1998 when a forklift ran over his right ankle in the course of employment.

Petitioner reopened the case several times – but only with respect to the foot.  In 2007 his foot award was increased to 57.5%.  Five years later, his foot award was increased again to 60%.  But the psychiatric aspect was not increased.  It remained at 10%.

The same day petitioner received an increase to 60% of his foot, he filed a modification application along with a motion for medical and temporary disability benefits seeking psychiatric treatment.

At trial, petitioner testified that his increased level of depression was due to his foot injury.  He said that he developed intimacy issues with his wife leading to his divorce nine years earlier.  He also alleged that he gained 50 pounds and was diagnosed with depression following the accident.

Petitioner presented Dr. Devendra Kurani as an expert in psychiatry.  Dr. Kurani stated that petitioner’s divorce, lack of mobility, weight gain, hypertension, diabetes, unemployment, financial concerns, inability to socialize, and depression were all due to his 1998 accident.  Dr. Kurani said petitioner needed psychotherapy and medication.  Up to that point in time, petitioner had never been prescribed any psychiatric medication.

Respondent produced Dr. David Gallina, who agreed that petitioner had depression.  However, Dr. Gallina testified that the depression was not due to the work accident in 1998.  He felt that his obesity and loneliness were due to his divorce.   Respondent pointed out that petitioner had not had any psychiatric treatment throughout the life of his case and had not been prescribed psychiatric medications.

The Judge of Compensation ruled against petitioner.  The Judge noted that petitioner had never sought psychiatric treatment from 1998 to 2016.   Although his awards had been increased for the foot, his underlying foot condition had not changed all that much.  The Judge felt petitioner failed to link his divorce to the ankle injury in 1998.  According to the Judge, Dr. Gallina’s testimony made more sense in that petitioner made certain lifestyle choices which could account for his obesity.

Petitioner appealed and argued that res judicata principles applied and the Judge was bound by the prior acceptance of the psychiatric aspect of the case.  The Appellate Division disagreed:  “Thus, there is no basis for the assertion that petitioner had a right to have his psychiatric disability award increased because of a prior court order.”  The Appellate Division stated that petitioner simply failed to prove that his current depression was caused by his 1998 accident.

The case illustrates that employers can win reopener claims at trial.  The case was extraordinary in that petitioner was seeking psychiatric treatment after an accident going back to 1998 with no intervening psychiatric treatment.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

Can a Judge of Compensation order a respondent to pay temporary disability benefits without a motion being filed in the first place?  The answer is no according to the decision in Munch v. Atlantic Health System, A-1265-16T1 (App. Div. December 21, 2017).

Petitioner, Dana Munch, worked as a paramedic for Atlantic Health System (AHS) and witnessed the death of a child during the course of her employment on October 12, 2014. She received authorized treatment and temporary disability benefits from November 14, 2014 to January 14, 2015.  She then returned to work.

On June 18, 2015 petitioner had a hand injury at work and received temporary disability benefits from June 22, 2015 through April 21, 2016.  During this period of time she began treating with Dr. Nayak, a psychologist, for a psychiatric reaction to the October 12, 2014 incident noted above.  Dr. Nayak treated petitioner from January 2016 through June 2016.

A key fact in this case is that petitioner failed to return to work in June 2016 and was therefore terminated.

On August 16, 2016, petitioner filed a claim petition for psychiatric injuries related to the incident on October 12, 2014.  AHS accepted the case as compensable.  Petitioner did not request temporary disability benefits, nor did she file a motion for temporary disability benefits.

The first listing of the case occurred on November 2, 2016.  Counsel for petitioner presented the Judge of Compensation with a report from Dr. Nayak, the psychologist, dated October 28, 2016.  The doctor said that petitioner suffered from post traumatic stress disorder related to the October 12, 2014 incident.  He added, “Ms. Munch has not been able to return to work for the duration of time that I have been treating her since January 18, 2016.  Furthermore, I believe within a reasonable degree of probability based on my expertise as a clinical psychologist that in Ms. Munch’s current psychological state she will not be able to return to her old job as a paramedic at the present time.”

After reading this letter, the Judge of Compenstion indicated that he was inclined to enter an order for payment of temporary disability benefits.  Capehart Scatchard represented AHS and argued that there had been no motion filed and no request for temporary disability benefits from petitioner.  Further, defense counsel argued that petitioner had no job and therefore no wage loss to replace.  Moreover, counsel argued that Dr. Nayak failed to explain why petitioner was able to return to work after the October 12, 2014 incident up until June 2015 when she injured her hand but now could not work.

The Judge of Compensation allowed oral arguments on the issue of temporary disability benefits at the same first court listing but denied a request by AHS for a three week adjournment.    The Judge then entered an order for temporary disability benefits without requiring a motion for medical and temporary disability benefits to be filed. AHS appealed.

The Appellate Division reviewed the administrative rules that require a motion to be filed for an order to be entered for temporary disability benefits.  The Court said, “Petitioner did not undertake any of the steps pursuant to N.J.A.C. 12:235-3.2 to support an award of temporary disability benefits.  Thus, Atlantic had no opportunity to respond to or oppose an award of benefits.”  The Court added, “The Workers’ Compensation judge did not afford Atlantic an opportunity to challenge the legal or factual basis for awarding benefits to petitioner despite Atlantic’s request for a brief adjournment to submit such opposition.  Moreover, there were no depositions, sworn statement, or documentary evidence (other than Dr. Nayak’s letter) submitted in support of petitioner’s claim.”

The court then cited the basic principle in law regarding due process. “In accordance with due process principles, the opportunity to be heard, ‘includes not only the right to cross-examine the adversary’s witnesses but also the right to present witnesses to refute the adversary’s evidence.’”  Paco v. Am. Leather Mfg. Co., 213 N.J. Super. 90, 97 (App. Div. 1986).

While the technical rules of evidence may be relaxed in workers’ compensation proceedings, they may not be relaxed to the point of infringing on the parties’ due process rights or other fundamental rights. Id.At 95-96.  Atlantic was not given the opportunity to proffer any medical records or reports, call witnesses, or submit any evidence in opposition to petitioner’s claim.  Based on the foregoing, we find that Atlantic was denied a meaningful opportunity to be heard in accordance with the due process principles.

The Appellate Division also concluded that the rule applied in Cunningham v. Atl. States Cast Iron Pipe Co., 386 N.J. Super. 423, 432 (App. Div. 2006) requiring claimants to prove that they were both available and willing to work and would have been working if not for the disability.  The Court noted that petitioner had been terminated well before the order was entered in the first listing of the case.  The Court also observed that petitioner had in fact returned to work for six months after the October 12, 2014 incident, a fact which Dr. Nayak seemed unaware of.  Further, the petitioner herself never sought temporary disability benefits nor filed  a motion for benefits.  The first time there was any mention of petitioner requiring temporary disability benefits was when her attorney produced the report from Dr. Nayak in court, several months after petitioner had been terminated for not returning to work.

Dr. Nayak’s letter did not address petitioner’s ability to work in a different capacity or perform light duty assignments.  Dr. Nayak did not testify before the Workers’ Compensation judge or provide an affidavit in support of petitioner’s claimed disability.  Dr. Nayak’s letter does not explain how petitioner was able to return to work for six months after the October 2014 incident but was unable to return to work in June 2016.  More importantly, petitioner did not testify or present evidence that she suffered a wage loss as a result of her disability because she was available and willing to work and would have been working if not for the disability.

 The Appellate Division concluded that the petitioner failed to demonstrate any entitlement to temporary disability benefits.  Therefore the Court reversed the decision of the Judge of Compensation.   This case is significant because it emphasizes how important it is to allow due process to the parties in a workers’ compensation claim.  Further, it underscores the solid principles outlined in the Cunningham case.

This case was successfully handled by the Capehart team of Stephen Fannon, Esq. and John Pszwaro, Esq., who successfully argued before the Appellate Division.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

After decades of confusion over the issue of paying temporary disability benefits to volunteer firefighters who have no outside jobs, practitioners finally received an answer from the Appellate Division in Kocanowski v. Township of Bridgewater, A-3306-15T2, (App. Div. December 11, 2017).

The case involved a volunteer firefighter with the Finderne Fire Engine Company in Bridgewater Township.  Petitioner was responding with her company to a multi-alarm fire in March 2015 when she slipped and fell on ice, breaking her right fibula. The injury led to several surgeries over the next year.  Petitioner had not worked since 2013 when she began taking care of her father, who had serious health problems. In 2014, she resumed working as a volunteer firefighter in an unpaid capacity.

Petitioner filed a motion for medical and temporary disability benefits.  She asserted that she was entitled to temporary disability benefits at maximum rates under N.J.S.A.34:15-75. The Township argued that no temporary disability benefits were required because petitioner really had no wage loss. She had not worked since 2013.  The Judge of Compensation ruled for respondent, and petitioner appealed.

The Appellate Division methodically explained why the Judge of Compensation was correct in dismissing the claim for temporary disability benefits.  First, the Court cited to N.J.S.A. 34:15-38, which states that temporary disability benefits are due the day that the employee is first unable to continue at work by reason of the accident.  Petitioner argued that Section 75 creates a different right for volunteer firefighters because it states that compensation for any volunteer fireman must be based upon a weekly salary or compensation that is conclusively presumed to be the maximum allowed under the New Jersey Workers’ Compensation Act.

The Court agreed with respondent that there must first be proof of a wage loss before Section 75 is referenced.

Kocanowski’s claim is at odds with the underlying reason for awarding temporary disability, which is to replace lost wages.  It is at odds with the method for calculating temporary disability, which is to consider weekly wages.  When the legislature enacted the provisions that addressed firefighters and others, it did not make any special provisions for calculating temporary disability in a different way.

The Court ruled as follows:  “We agree with the compensation judge that although a volunteer firefighter is entitled to temporary benefits at the maximum rate and that the seven-day waiting period does not need to be served, there first must be an entitlement by the volunteer to payment of temporary disability benefits.  That payment depends of proof of lost wages.”  In other words, one does not get to  the maximum benefit rate contained in Section 75 unless the volunteer can prove an entitlement to temporary disability benefits.

This case was expertly handled by Jennifer A. Cottell, Esq. of Cooper, Cottell & Taylor, LLC.  Ms. Cottell not only won the case at the Division level and on appeal but she successfully defeated an amicus brief filed by COSH on behalf of the petitioner.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

New Jersey law has very strict procedures for workers’ compensation carriers to follow in subrogation, and failure to comply with those strict rules can mean loss of subrogation rights, as noted in Pino v. Polanco and New Jersey Manufacturers, A-5027-15T4 (App. Div. November 22, 2017).

Ms. Pino was injured in a work-related car accident on May 20, 2011.  Another vehicle driven by an uninsured driver, Polanco, struck Pino’s vehicle.   Pino had uninsured motorist coverage with NJM.  Hartford paid workers’ compensation benefits totaling $48,056.79 for medical and temporary disability benefits.  The Hartford subrogation representative sent a letter to Pino’s attorney dated December 5, 2011 advising counsel of its subrogation rights under N.J.S.A. 34:15-40.  The letter asked that Pino notify Hartford if she was not going to proceed with a third-party claim.

In April 2013, Pino filed a personal injury action against Polanco and later amended the complaint to name NJM as a direct defendant under the uninsured motorist policy.  The parties eventually decided to arbitrate their dispute and entered into a “Stipulation of Dismissal Without Prejudice Subject to Reinstatement” of the law suit.   The arbitrators awarded Pino $65,000 subject to the workers’ compensation medical lien.  NJM rejected the arbitration and sought a jury trial, believing that Pino could not get past the verbal threshold and would likely lose.

Ultimately Pino chose not to reinstate the Law Division case, which meant no recovery at all.  But The Hartford did not know this.  There was a long gap in time between the arbitration in July 2015 and the point in time when The Hartford finally learned about the ultimate outcome of the UM matter on January 26, 2016.  Once The Hartford found out, it quickly filed a motion days to set aside the dismissal without prejudice and reinstate its complaint against NJM.  That motion was filed well past 90 days from the dismissal without prejudice in 2014 but within 90 days from when The Hartford found out about the dismissal and decision not to pursue the matter.  The trial judge rejected The Hartford’s motion based on an obscure provision contained in N.J.S.A. 34:15-40(f).  That provision states:

Where an injured employee or his dependents have instituted proceedings for recovery of damages for his injuries and loss against a third person and such proceedings are dismissed for lack of prosecution, the employer or insurance carrier shall, upon application made within 90 days thereafter, be entitled to have such dismissal set aside, and to continue the prosecution of such proceedings in the name of the injured employee or dependents in accordance with the provisions of this section.

The Hartford appealed and argued that the 90 days should start from when the company learned that the UM matter had been dismissed.  NJM argued that the statute says 90 days from the dismissal for lack of prosecution.  The Appellate Division contemplated that one reason for the 90-day rule is undoubtedly to foster expeditious resolution of subrogation claims.  There are no reported decisions on this particular issue, as noted by the Court.

The Appellate Division was not sure that a dismissal for “lack of prosecution” mentioned in the statute fit precisely the “dismissal without prejudice” in this matter, but it said that the statute says what it says, and it does not have a provision for a “knowledge requirement.”  The Court explained, “We share the trial court’s observation in its oral ruling that perhaps Pino or her attorney should have advised The Hartford of the June 2014 dismissal of the UM case sooner, consistent with the request that The Hartford had made in December 2011 to be kept advised of the matter’s status.  However, we are aware of no authority that imposes a legal duty upon an employee or her personal injury attorney to supply such notice.”

The Court went on to state that the record did not disclose proof that The Hartford regularly followed up with Pino or her counsel about the status of the third party recovery following the December 5, 2011 letter.  The Court seemed to be laying some blame on The Hartford for not being more diligent.  While this case involves a very rare problem in the law, it is interesting to read in that the Court favored a very technical study of the obligations under N.J.S.A. 34:15-40.   It is precisely for situations like this that subrogation representatives must vigorously follow up on the status of third party law suits and arbitrations.  There is never too much diligence in keeping tabs on third party law suits.

Thanks to Ron Siegel, Esq. for bringing another important case to our attention.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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.

Many police officers work outside assignments that are approved through their police department.  What happens if an injury occurs to the officer in the approved outside assignment?  What are the ramifications for workers’ compensation and civil liability purposes?  This issue arose in Dutcher v. Pedro Pedeiro and Black Rock Enterprises, LLC., A-1088-16T3 (App. Div. October 25, 2017).

Black Rock Enterprises approached the Township of Woodbridge Police Department for permission to hire police officers for traffic control while its workers performed a road milling project in town.   The Company specified how many police officers would be required for the job and paid the Township for their services.  The Township assigned the police officers and then in turn paid them directly.  Officer Dutcher, the plaintiff in this case, was approved by the Township to do work for Black Rock Enterprises.  The company assigned him to a specific intersection of Woodbridge Center Drive and Plaza Drive.

On the day of the accident, Dutcher reported to the site, and was instructed by the company on his duties.  He followed all the construction company’s policies.  Dutcher reported to the company’s supervisor, which had control over his work.  The company directed Dutcher in how to direct traffic, depending on the progress and status of the milling work.  The Township had no authority over Dutcher’s duties at the work site.  The company also had the power to discontinue Dutcher’s services if his work was unsatisfactory.

Dutcher was injured when a vehicle driven by Pedeiro, an employee of the construction company, struck him while performing his traffic control work.  Dutcher received workers’ compensation benefits from the Central Jersey Joint Insurance Fund, of which Woodbridge Township was a member.  Dutcher also attempted to sue the construction company for negligence.   The Central Jersey Joint Insurance Fund took the position that Dutcher had two employers, and that Black Rock Enterprises was equally responsible for the workers’ compensation claim.

The trial judge ruled that Dutcher was a special employee of the construction company and therefore could not sue the construction company.   The Appellate Division agreed stating that “a ‘special employment relationship’ where the ‘special employer’ is also responsible for workers’ compensation exists ‘when a general employer lends an employee to a special employer.’”

There are five factors to consider in establishing a special employment relationship.  First, the Court noted that there must be consent for contracting:  “Here, plaintiff signed up for the Extra Duty Services knowing the Township would hire him out to a second employer and would expect him to perform his duties for that employer.” Consent was therefore established.

Second, the Court said that the work being done must be essentially that of the second employer.  That was easy to show because the construction company specified how many officers it needed and the date, time and location of the work.   The company specified the requirements of the job, and traffic safety was essential for the safety of the construction workers.

The most significant factor is the third, namely the right of control.  The Court said it was clear that the construction company controlled Dutcher’s activities, as it could direct his work and get rid of him if it wanted to do so.  There was a foreman on the site in control of the operation.

The fourth factor involved payment by the construction company to Dutcher.  The Court said that it really amounted to the same thing when the company paid the Township, which in turn paid Dutcher.

The fifth factor pertained to the right of the company to hire or discharge the special employee.  Even though the company did not hire Dutcher personally (the Township assigned him), the company clearly had a right to dispense with Dutcher’s services if it wanted to do so.

For all these reasons, the Appellate Division held that Dutcher could not sue the construction company, as Black Rock Enterprises was his special employer.  New Jersey has a powerful exclusive remedy provision which states that an employee cannot sue his or her own employer for personal injuries in a civil action except in truly rare cases of intentional harm.

This case follows prior case law on this issue.  There are many joint employer and special employee situations in New Jersey.  Where the parties to the joint employment or special employment relationship have not clearly established liability for workers’ compensation, a Judge of Compensation has the power to assess responsibility for workers’ compensation equally between the employers.  The issue in this case focused more heavily on the corollary principle, which is that the injured worker cannot sue either company in a joint or special employee situation.

It makes good sense for employers like police departments, which routinely assign officers to outside companies for approved work, to get written agreements signed in advance regarding the responsibility of the special employer to pay for workers’ compensation injuries.  Most employers who request police officers or special employees do not realize that they are responsible for workers’ compensation injuries in whole or in part.  That leads to unnecessary and expensive litigation.  The easy solution is to address this issue right up front.

Thanks to Ron Siegel, Esq. for bringing this appellate division decision to our attention.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

On July 26, 2012, Stephanie Nichols applied for a job as a Senior Radiology Technologist with OhioHealth Corp at the Riverside Breast Health Center.  She had worked in similar positions for over 30 years.  Nichols received the job offer contingent on passing a medical examination.  In the health assessment form that Nichols completed, she was asked “Do you have any limitations that would keep you from performing the duties of your job?”   Her answer was, “Cannot stoop or work standing on my knees.”

Nichols indicated that her limitations stemmed from a prior meniscus tear that had been repaired one year before she applied for the job.  She added that she has poor balance and that if she needs to go down to the floor that she usually “hangs onto something.”

The next step was a meeting with the Riverside Hospital nurse, Charissa Cattrell.  In that meeting Nichols clarified that kneeling caused her knee pain.  She said she could do the job but that performing some of her duties would cause her more knee pain.

Cattrell referred Nichols to an accommodation specialist, Nancy Miller, at the hospital.  Nichols spoke with the accommodation specialist but said that did not ask for accommodations because she felt she did not need any.  Miller had a different recollection of the phone call and recalled that Nichols requested accommodations by potentially leaving the door to the mammography suite open or having another person to be available to assist her.  Miller said that there was also a discussion about grab bars being installed to help Nichols with any balance issues.

Miller then spoke with the manager of Radiology about the possible accommodations.  The manager said that leaving the door open would violate hospital rules, and installation of grab bars was not possible because of the size of the rooms.

Miller next discussed with Nichols the importance of getting a note from her own doctor stating that Nichols had no limitations.  Nichols offered to come to the hospital and demonstrate that she could do the job, but that offer was declined.  Plaintiff’s physician, Dr. Barker, then faxed a note to OhioHealth stating, “Patient was last seen 9/7/11.  The patient was released without restrictions at that appointment.”   He faxed a second note stating, “Nichols has not required physical therapy at this point in time but certainly she will give us a phone call if she stalls with progress and perceives the need for some reconditioning, which would be nicely accomplished by therapy if necessary.”

The next day Nichols advised hospital personnel that she was ready for orientation.  She was informed that the job offer had been rescinded and the position would not be filled.  Plaintiff sued alleging that the hospital discriminated against her based on her disability or her perceived disability in withdrawing the job offer.

The hospital moved to dismiss the case on the ground that Nichols did not have a covered disability under the ADA.  In her deposition, Nichols admitted that she is not disabled; she just has pain sometimes.   The hospital also argued that Nichols’ own doctor said she has no restrictions whatsoever. “The Court agrees with Plaintiff that Dr. Barker’s return to work without restrictions is not dispositive of whether or not she has a disability, but it is a significant blow to her claim that the knee injury substantially limited a major life activity.”  The Court added, “Further, that her doctor released her without restrictions and that she never sought medical help for her knee between the surgery and the events in this lawsuit is evidence that her knee injury did not substantially limit a major life activity.”

Nichols also argued that even if she did not have a disability, the hospital perceived her as having one and therefore regarded her as being disabled in violation of the ADA.  The Court also dismissed this argument:  “Although this evidence certainly suggests that OhioHealth knew of a possible impairment, the Court agrees with the Defendant that receipt of a doctor’s report showing no restrictions has a preclusive effect on a regarded-as-claim.”

This case illustrates the difficulty a plaintiff may have in proving an ADA claim where, on the one hand, the plaintiff asserts that she can do her job without accommodation and her doctor finds no restrictions, but on the other hand the plaintiff asserts that she has a covered ADA disability.  It is difficult to square those two positions, and the court in this case clearly made the right decision to dismiss this case.  The case can be found at Nichols v. OhioHealth Corp., 2017 U.S. Dist. LEXIS 131146 (S.D. Ohio August 17, 2017).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

Rarely does the Appellate Division reverse a Judge of Compensation when the only issue is the extent of permanent partial disability.   The case of Van Artsdalen v. Fred M. Schiavone Construction, No. A-3392-15T1, 2017 N.J. Super. Unpub. LEXIS 2516 (Oct. 5, 2017) is that rare example.

The petitioner, Mr. Van Artsdalen, was injured on January 26, 2012 in a fall at work while carrying 60-70 pounds of plywood.  He saw a doctor after work and then again two days later.  He attempted to return to work the next day but was unable to do so because there were no work assignments available.  He did go back to work on January 30, 2012 but could not finish his shift on account of severe back pain.  Petitioner obtained an MRI and received physical therapy and pain management.  He was cleared to return to work on May 5, 2012.  He did not return to work initially because there were no assignments.  Finally, he returned to work on July 12, 2012 and continued through September 2012 when he retired.  He testified that he could no longer take the pain and therefore retired at the age of 53.  He did admit to having chiropractic treatment in 1992 and symptoms of low back treatment in 2008.

In 2013 petitioner had another MRI and then filed a petition in the Division of Workers’ Compensation.  He received more pain management and an epidural injection.  He never treated again after September 2014. He never had any surgery to his spine.  Petitioner testified at trial that he had difficulty lifting things, bending over while getting dressed and performing household chores.  He was subject to sudden onset of sharp pain, particularly in the groin area.  He used over-the-counter medications and ice.  Sometimes the pain interfered with his sleep and often prevented him from doing heavy lifting of objects.  He did admit that he was able to perform most daily activities including household chores and driving his grandchild to and from school.

The parties agreed to submit the expert reports into evidence without having the experts testify.  Dr. Gaffney for petitioner estimated 52.5% based on petitioner’s lack of relief from epidural injections.  He diagnosed “chronic pain and lumbar fibromyositis syndrome” and noted “restriction of function.” The Judge stated that “it was understood that surgery could not be wisely undertaken in Van Artsdalen’s condition to obtain an optimum result bettering his condition.”  However, there was apparently no testimony to the effect that surgery could not be performed, and Dr. Gaffney’s report did not spell this out.   The Judge also stated that the petitioner’s condition “simply was inoperable due to his condition of multiple levels impeded in his lumbar spine.  Therefore, his disability rating is construed as worse than one who could obtain relief from a procedure or operation.”

Dr. Maletsky’s report was also admitted into evidence without testimony by the doctor on behalf of respondent.  Dr. Maletsky found 2% permanent partial disability.  Dr. Maletsky noted that petitioner had x-rays of his spine in 2008, four years before the accident, but the Judge of Compensation found Dr. Maletsky’s report was not as credible as that of Dr. Gaffney because in part he did not address the fact that petitioner had multiple levels of discs which were impaired.  She found that Dr. Maletsky did not “adequately address petitioner’s increased symptomology as being related to the last work incident.”

The Judge awarded 47.5% permanent partial disability or $153,900.  Schiavone appealed and argued principally that the judge’s conclusions were not supported by the record.  The Appellate Division first acknowledged the expertise of the Judge of Compensation in awarding disability.  However, in this case the Appellate Division found two areas where the Judge of Compensation drew conclusions that were not supported by the record.  “[W]e are constrained to vacate the judgement and remand for reconsideration as we conclude there was no evidence to support the findings that Van Artsdalen’s injury was inoperable or that he took few days off during his years of employment.”   The Court added that “neither Van Artsdalen nor the experts stated these facts or opinions, nor was there any other evidence presented from which the judge could have logically inferred them.”  For these reasons the award was reversed.

This case would not have been reversed had there been evidence in the record that petitioner did not take time off in the past and had been advised that his condition was inoperable.  Both petitioner’s attorney and respondent’s attorney took risks when they did not produce the live testimony of their experts.  Through live testimony petitioner’s attorney could have focused on whether the back condition was inoperable, thereby giving the Judge of Compensation support in the record for her conclusion.  Respondent’s expert could have cross examined effectively on petitioner’s prior condition and alternative explanations for why petitioner was never advised to have surgery on his spine.  This was simply a case where the sparse record did not support some of the conclusions of the Judge of Compensation, and that was mainly due to the failure to bring in the experts.  Without that testimony, 47.5% seemed extremely high for an unoperated back condition.

The lessons learned are to bring in experts when trying cases and only try cases on reports where there is very little money at stake and there are no real issues of causation.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

The case of Apperman v. Visiting Nurse Association of Westfield, A-5446-15T3 (App. Div. October 30, 2017) presented an unusual situation where a carrier agreed to pay benefits that exceeded its obligation under the statute.  The case involved the tragic death of Phyllis Apperman who died in a motor vehicle accident in December 2003. The claim was accepted by New Jersey Manufacturers, which agreed to pay dependency benefits to Eric Apperman, the decedent’s husband, and Harold Apperman, a 34-year-old son who was legally incapacitated.

Dependency payments to Eric Apperman ended when he remarried.  In 2007 at the time of settlement, NJM’s counsel stipulated to the following terms in respect to benefits for the incapacitated son:

However, we are here today as he has requested benefits for his son as a dependent, and we do stipulate that the son is incompetent and should receive dependency benefits at the amount of fifty percent of Phyllis Apperman’s wages of $800.  So, he will get $400 per week for 450 weeks and continuing as long as he remains incompetent.  Payments shall date back to March 4, 2005.

The Judge of Compensation entered an order stating that the son’s dependency benefits “shall continue for 450 weeks and shall be paid thereafter pursuant to N.J.S.A. 34:15-12(b) et seq.”  When the 450 week period ended, NJM correctly stopped payments based on the language of the statute which limits payments to 450 weeks for adult children who are incapacitated.  Eric Apperman then appealed the denial of benefits past 450 weeks in part based on the agreement made by NJM counsel at the time of settlement.

The Judge of Compensation heard the motion of petitioner’s counsel to enforce the prior agreement and ruled that NJM’s agreement to pay beyond 450 weeks was a mistake of law.  Therefore, the Judge of Compensation ruled against Apperman, who then filed an appeal.

The Appellate Division first examined the precise language of N.J.S.A. 34:15-13, which states that “payments to such physically deficient persons as are for such reason dependent shall be made during the full compensation period of 450 weeks.”  The statute further states that benefits for dependents under age 18 shall continue until they reach the age of majority.

In this case, the Appellate Division held that payments for those under age 18 can continue for over 450 weeks until the age of majority, but payments for an adult person who is mentally incapacitated are limited to 450 weeks by statute.  The Court further said, “Neither party has cited any authority, nor have we found any, that would confer jurisdiction on the Division of Workers’ Compensation to sanction the payment of dependency benefits for a period exceeding that authorized by statute.”

To petitioner’s argument that NJM had previously agreed on the record to make payments beyond 450 weeks, the Court responded that a Judge of Compensation does not have authority to enforce an order that would extend benefits beyond statutory limits. The Court said that the Division of Workers’ Compensation lacks equitable powers.  Finally, the Court noted that it was sympathetic to the plight of petitioner since he remained incapacitated, but any change in the law must be effected by the Legislature.

This decision is noteworthy because there are so few cases involving dependent adults who are incapacitated and also few cases involving mistakes of law.  The ruling is correct that a Judge of Compensation is limited to his or her statutory powers.  For example, if there is no jurisdiction in New Jersey, (no accident, no contract and no employment in New Jersey), the Judge cannot hear the case even if the parties agree to present it in New Jersey.  Similarly, when a claim is time barred, even if the respondent agrees to waive the statute, the Judge cannot hear the case, because powers of the Judge of Compensation are limited to claims timely filed in the Division.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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.