NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.
Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.
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One of the most nettlesome questions in New Jersey workers’ compensation is whether a non-party can attend an IME and whether a petitioner or a physician can record a medical examination without the other party’s consent and use it at trial. It is important to observe that the New Jersey Workers’ Compensation Act provides very little guidance on procedures regarding medical examinations other than one particular statutory provision which allows only an employee’s personal physician to attend an independent medical examination.
The New Jersey Appellate Division in Kathleen DiFiore v. Tomo Pezic, A-2826-20, A-0367-21, A-1331-21, (App. Div. May 3, 2022) recently set down some very clear rules on recording and attendance for defense medical examinations. The case focused on Rule 4:19 Physical and Mental Examination Of Persons. That civil court rule provides as follows:
In an action in which a claim is asserted by a party for personal injuries or in which the mental or physical condition of a party is in controversy, the adverse party may require the party whose physical or mental condition is in controversy to submit to a physical or mental examination by the medical or other expert by serving upon that party a notice stating with specificity when, where and by whom the examination will be conducted and advising, to the extent practicable, as to the nature of the examination and any proposed tests.
In civil court these exams are officially called DMEs (defense medical examinations), although litigation attorneys generally refer to them as IMEs as they are also called in workers’ compensation. The Court discussed prior New Jersey cases that have weighed in on various aspects of DMEs and departed from them to some extent. The Court first observed that a DME is “… not an adversarial proceeding inevitably designed to disprove claims of injury and trap plaintiffs into admitting or showing their claims are exaggerated or fabricated.” Rather, the Court said that the DME is a professional assessment that must adhere to the standards of the examiner’s profession. The Court also added, “Nor is the DME, as defendants tend to portray it, always a purely objective exercise unaffected by any conscious or subconscious biases of the examiner. The examiners tend to be hired repeatedly by insurance companies and defense firms, with the expectation the examiners will assist the defense, if needed, as witnesses at trial.” The similarity of DMEs to IMEs is obvious.
The Appellate Division in the DiFiore case established some basic rules in regard to recording of a DME and third-party attendance. “First, a disagreement over whether to permit third-party observation or recording of a DME shall be evaluated by trial judges on a case-by-case basis, with no absolute prohibitions or entitlements. . . . The trial court must balance the competing advantages and disadvantages tailored to the particular case.”
The Court added that the expert who performs the DME “does not have the right to dictate the terms under which the examination shall be held.” The court noted that if the expert does not wish to proceed with the exam on the conditions imposed by the court, the examiner can withdraw from the examination.
The Court emphasized that to record an examination, the plaintiff must make a request and there must be consent to the request. To that extent the DiFiore Court departed from the Carley case. “Second, despite contrary language in Carley, we hold that, going forward, it shall be the plaintiff’s burden to justify to the court that third-party presence or recording, or both, is appropriate for a DME in a particular case, absent consent to those conditions.”
Next the court suggested that technological advances make recording rather easy. “We take judicial notice that with the pervasive use of pocket-sized smart phones as cameras and audio recorders, they can be unobtrusively placed on a tripod with minimal effort.”
The Court also addressed the presence of third parties in the examination. “… If the court permits a third party to attend the DME, it shall impose reasonable conditions to prevent the observer from interacting with the plaintiff or otherwise interfering with the exam.”
With respect to psychological examinations, the Court concluded that there is no reason to treat psychological examinations differently than physical examinations with respect to recording the examination or having third parties present. “We also discern no reason to favor or disfavor third-party presence or recording for neuropsychological (or any other ‘mental’) DMEs as opposed to other specialties.”
Lastly, the Court stated that if an interpreter is needed for the exam, the examiner shall utilize a “neutral interpreter” agreed upon by the parties.
As all practitioners and judges well know, New Jersey is a state in which only one party has to consent to a recording. Why then did the Appellate Division devote 44 pages to this important decision? It is important to understand that the consequence of the DiFiore decision is that without a request for a recording and without consent, the recording will not be permitted to be used at trial. The point of this case is that if a party wishes to record an exam and use the recording at trial, the party must make an initial request. The same is true of a request to have a third party present in the examination.
These rules are sensible. The fundamental ruling in this case is that a request must first be made by the plaintiff to record the exam or to have a non-party attend the exam. Consent to the recording or attendance by the respondent or IME physician will resolve the issue. Few cases will likely require a Judge to rule on the issue.
As mentioned above, the DiFiore case emerged from civil litigation. It did not involve a workers’ compensation case. This issue will eventually get to the Appellate Division on appeal from the Division of Workers’ Compensation and will probably focus on a non-consensual recording of an IME that counsel attempts to use at trial. Respondent will object based on DiFiore and an appeal will likely follow. This practitioner expects that the Appellate Division will evaluate this issue exactly as it did in DiFiore.
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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.
The case of Donald Servais v. Ocean Wholesale Nursery, LLC., A-2988-20, (App. Div. July 14, 2022) presents an unusual legal issue in workers’ compensation. The case involved a dispute about an employment separation agreement and whether that agreement could have been construed to constitute a payment of workers’ compensation benefits, thereby tolling the statute of limitations.
Mr. Servais suffered an amputation of three fingers of his right hand on January 26, 2016. No claim petition was ever filed within the two-year statutory period, and respondent never paid any workers’ compensation benefits to Mr. Servais, believing that the injury occurred at petitioner’s home and that petitioner was not an employee. Respondent hired petitioner as a consultant and not as an employee, although petitioner contended that over the course of five years his relationship with Ocean Wholesale Nursery, LLC changed to that of an employee. Petitioner ultimately filed a formal claim petition on October 26, 2018, well past the two year statute of limitations.
Respondent, as insured by Farm Family Insurance Company and administered by ESIS, filed a motion to dismiss the claim petition under the two year statute of limitations. Petitioner countered by raising an argument regarding an employment separation agreement signed on January 31, 2017 by both parties by which terms respondent paid $5,000 to petitioner to resolve their business relationship. Petitioner argued that the employment separation agreement was ambiguous and could have led petitioner to believe that the $5,000 payment was in part a payment for the loss of his fingers. Petitioner argued that the claim petition was filed within two years of the date of signing the employment agreement and was therefore timely filed.
The parties agreed to try the issue of the statute of limitations separately and then reserve for a later trial all other issues, such as compensability and employment. The judge heard testimony from petitioner, the Nursery’s owner, and the Nursery’s former general manager. The judge reviewed the terms of the employment separation agreement and found Section 7 of the Agreement to be confusing. That section excluded from the Agreement “claims that may arise after the date (petitioner) signs this agreement.” The judge thought that this language might lead petitioner to believe that any incidents that arose before he signed this Agreement were included. The judge also found paragraph seven to be ambiguous because it excluded “(petitioner’s) rights to receive benefits for occupational injury or illness under the workers’ compensation law” but did not specifically mention a “traumatic injury.” The judge acknowledged that there was no mention anywhere in the agreement of an injury to petitioner’s fingers but criticized the agreement for not informing petitioner of his right to file a workers’ compensation claim.
Based on his interpretation of the separation agreement the judge concluded that the separation agreement included any and all claims, including the loss of fingers. The judge also found that petitioner was an employee and was injured during the course of employment, although the judge previously agreed that these issues would be held for a later hearing. Finally, the judge apportioned $1,000 of the $5,000 paid under the separation agreement to the petitioner’s injury to his fingers.
Farm Family appealed the decision to the Appellate Division, which reversed in favor of Farm Family and vacated the substantial award to petitioner. The Court said, “Reviewing the Agreement de novo, we perceive no ambiguity. The plain language of the Agreement expressly excluded petitioner’s workers’ compensation claim.” The Court added:
Contrary to petitioner’s argument, paragraphs five and six of the Agreement would not reasonably lead a person to believe that the $5,000 payment under the Agreement was also a partial payment for his work-related injury because paragraph seven of the Agreement, clearly entitled in bold ‘Exceptions,’ expressly stated that the release in the Agreement did not ‘affect or limit’ his right to receive benefits for occupational injury under the Workers’ Compensation Law.
In the end, the Appellate Division held that petitioner failed to file his claim petition in time. The Court also added that the Judge of Compensation had no right to apportion $1,000 of the $5,000 payment under the separation agreement to the loss of petitioner’s fingers. The Court said:
The judge’s finding that $1,000 of the $5,000 payment of the agreement was payment for petitioner’s loss of fingers has no basis in the record evidence. The judge faulted the agreement for not addressing petitioner’s loss of his fingers and for failing to inform petitioner of ‘his right to file a workers’ compensation claim and his inability to waive same.’ Yet, in the Agreement, petitioner did not waive his right to file a workers’ compensation claim. To the contrary, in the Agreement, petitioner expressly reserved his right to file a workers’ compensation claim. He just didn’t do so timely.
The Court concluded by reversing the order denying respondent’s motion to dismiss and vacated the final judgment. The Court did not reach respondent’s argument regarding denial of due process given the decision to dismiss the case on the statute of limitations.
This trial and legal brief in this case were handled by former Capehart attorney Dana Gayeski, Esq. and the appeal was argued by John Geaney, Esq.
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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.
Practical Advice in New Jersey Workers’ Compensation
Our clients often ask great questions regarding settlements in New Jersey workers’ compensation, particularly regarding the two types of settlements (Orders Approving Settlement, and Section 20/full and final), and the differences between them. This post provides examples of scenarios where an argument can be made for a Section 20 settlement.
There are two ways to settle a workers’ compensation claim in New Jersey. Most cases in New Jersey settle under N.J.S.A. 34:15-22 (known as an Order Approving Settlement) with a specific percentage of disability. In this case, the employee retains right to reopen for future benefits and receives a percentage award which is paid over a certain number of weeks corresponding with the level of disability. The higher the disability percentage, the more weeks that are paid.
Section 20 settlements are quite different. First, the Award is paid in a lump sum settlement. This is a full and final settlement of the case and it can never be reopened. A case settling pursuant to a Section 20 settlement must present a disputed issue of, liability, causation, jurisdiction, or dependency. Without one of these issues, there is no legal basis for a Section 20.
Issue of Liability: An issue of “liability” generally refers to a disputed employment issue (such as an off-premises injury) or a dispute regarding the existence of permanency. N.J.S.A. 34:15-36 states that in order to demonstrate permanent disability, a petitioner must prove, via objective medical evidence of an impairment (diagnostic studies) which restricts the function of the body. If the respondent can make a serious argument that there really is no permanent disability, then many judges will permit a Section 20 settlement.
In addition to proving an impairment, the petitioner must show also that the impairment is disabling. Disability is broader than impairment. It requires that the petitioner must also prove that he or she has a lessening to a material degree of working ability or a substantial impact on non-work activities.
Other bases for a Section 20 on the issue of liability are lack of timely notice under N.J.S.A. 34:15-17 or failure to comply with the Statute of Limitations under N.J.S.A 34:15-51.
Issue of Causation: An issue of “causation” generally refers to a disputed medical issue.
Case study/Example 1: Petitioner injures her left knee at work on January 1, 2020. Her post-accident MRI of February 15, 2020 is normal. She then has a subsequent non-work accident on March 1, 2020. An MRI of April 1, 2020 reveals an anterior cruciate ligament tear and a meniscal tear. We would argue that due to the March 1, 2020 subsequent accident which obviously caused new diagnostic findings, this case is appropriate for a Section 20 settlement. This example is similar to the case of Costanzo v. Meridian Rehab, A-5547-18 (App. Div. June 17, 2021), handled by our partner Carla Aldarelli. This case was discussed in our blog article entitled Respondent Prevails Where First MRI Post-Accident Showed No Abnormalities In Knee.
Case Study/Example 2: Petitioner injures her left knee at work on January 1, 2020. Her post-accident MRI of February 15, 2020 reveals an anterior cruciate ligament tear and a meniscal tear. During Respondent’s investigation, it is revealed that petitioner had a prior left knee injury of June 15, 2019 and on August 15, 2019, petitioner underwent a left knee MRI which also revealed an anterior cruciate ligament tear and a meniscal tear. We would argue that since the January 1, 2020 accident did not cause any new diagnostic findings, any disability is related to the prior June 15, 2019 accident, making this case proper for a Section 20 settlement.
Case Study/Example 3: Petitioner injures her left knee on January 1, 2020. On January 1, 2021, she receives an Order Approving Settlement for 15% of the leg from this January 1, 2020 accident. She re-opens her case on June 1, 2021. On May 1, 2021, she had a new left knee injury with a new employer for which she underwent treatment including a series of injections. She had no new treatment for the January 1, 2020 claim after filing her Re-opener. On the Re-opener, we would argue that the May 1, 2021 incident cuts off causation from the initial January 1, 2020 work accident, and the Re-opener should now be settled pursuant to Section 20.
Case Study/Example 4: Petitioner injures her left knee on January 1, 2020. On January 1, 2021, she receives an Order Approving Settlement for 15% of the leg from this January 1, 2020 accident. She re-opens her case on June 1, 2021. On May 1, 2021, she had a new and minor left knee injury with a new employer. The first employer for the January 1, 2020 accident agrees to provide all treatment following the reopener date, and the second employer pays no medical and temporary disability benefits because its incident was very minor. A petition is filed against the second employer. The employer for the May 1, 2021 incident will likely argue for a Section 20 dismissal. Most likely, the employer for the original January 1, 2020 re-opened claim will have to resolve the case on an Order Approving Settlement.
Issue of Jurisdiction: As a general matter, there are three principal ways in which jurisdiction in New Jersey may be found:
1. When the contract of hire is in New Jersey;
2. When the accident occurs in New Jersey;
3. When a substantial amount of employment for the respondent occurs in New Jersey.
There are instances where jurisdiction may be found in more than one state. This is allowed, so long as there is not a duplication of benefits between the two states (medical, TTD, permanency). So an employee may receive temporary disability benefits and medical benefits in another state like New York but apply for partial permanent disability benefits in New Jersey if the injury, hire, or work occurred in New Jersey.
Marconi v. United Airlines, 460 N.J. Super. 330 (App. Div. 2019) holds that localization of the employer in New Jersey and residency of the petitioner in New Jersey was not sufficient to warrant New Jersey jurisdiction where the petitioner worked almost exclusively in Pennsylvania and was injured in Pennsylvania. Petitioner argued that since United Airlines had a hub in Newark Airport (although petitioner worked in Pennsylvania) and petitioner also lived in New Jersey, those facts should be enough for jurisdiction. The Appellate Division disagreed. Our partner, Prudence Higbee, prevailed in this matter for United Airlines. More details about this case may be found in our blog article entitled United Airlines Wins Important Appellate Decision Involving Jurisdiction.
Issue of Dependency:
If it is determined that the work accident was not the cause of death, ultimately, we would argue that nothing except funeral costs are owed. However, in certain situations, a small Section 20 settlement/Award may be offered, in order to close the case.
If it is determined that an alleged dependent is not a valid dependent under Section 13, we would argue that nothing is owed. However, in certain situations, a small Section 20 settlement/Award may be offered, in order to close the case.
Miscellaneous Issues
Finally, there are also some “miscellaneous” considerations when determining if a Section 20 settlement is feasible. First, all Section 20 settlements are subject to petitioner’s, petitioner’s attorney’s, and the Judge’s approval.
Second, practitioners should keep in mind that legal fees are quite different between a Section 20 and an Order Approving Settlement. In Orders Approving Settlement, petitioner’s attorney’s fee (which is 20% of the overall Award) is paid 60% by Respondent and 40% by petitioner. For petitioner’s permanency exam, Respondent pays 50%; petitioner pays 50% (generally $300 each) In a Section 20 Order, petitioner pays 100% of his or her attorney’s fee.
Case Study/Example 1: Petitioner receives an Award for 15% partial total at 2021 rates, or 90 weeks at a rate of $258.00 per week, totaling $23,220.00. Petitioner’s attorney’s fee is $4,644. Of this, Respondent pays $2,786.40 and petitioner pays $1,857.60 (this may be rounded to the nearest dollar and rounded up for Respondent and rounded down for petitioner). Respondent and petitioner each pay $300 for petitioner’s expert. Ultimately, petitioner nets $21,062.40 and retains re-opener rights.
Case Study/Example 2: Petitioner receives a Section 20 Award of $27,500. Petitioner is solely responsible for his attorney’s fee of $5,500 out of his Award; he also pays the full $600 for his report. Ultimately, petitioner nets $21,400 and does not retain re-opener rights.
One disadvantage of a Section 20 is that payments are not lienable when there is a third party recovery unless both parties specifically agree on the record to make such payments lienable. This is quite different from an Order Approving Settlement where the entire permanency payment may be lienable if the third party amount is higher than the amount of the permanency award.
More than two thirds of settlements in New Jersey resolve on an Order Approving Settlement. The reason is that in many accidents there simply is no legal basis for a Section 20 settlement. The advantages of a Section 20 settlement are that the case is closed in a lump sum payment (unlike payments over many weeks for an Order Approving Settlement), there is no admission of liability and there is no potential for a reopener. But there must be a disputed issue of, liability, causation, jurisdiction, or dependency to argue for a Section 20 settlement.
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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.
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.
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 76th 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.
NJ Workers’ Comp Legislative Update
The New Jersey Assembly recently introduced legislation, A2886, which would provide employment protections for paid first responders diagnosed with work-related post-traumatic stress disorder. The bill states as follows: An employer shall not discharge, harass, or otherwise discriminate or retaliate or threaten to discharge, harass, or otherwise discriminate or retaliate against an employee with respect to the compensation, terms, conditions, duties, or privileges of employment on the basis that the employee took or requested any leave related to a qualifying diagnosis of post-traumatic stress disorder. Following a period of leave related to a qualifying diagnosis of post-traumatic stress disorder, an employer shall reinstate an employee whose fitness to return to work has been documented by a licensed physician or licensed mental health professional to the position and duties held by the employee prior to the leave.
The bill makes clear that the PTSD condition must arise from work by stating as follows:
b. A diagnosis of post-traumatic stress disorder is qualified under subsection a. of this section if:
(1) the diagnosis is made by a licensed physician or licensed mental health professional; and
(2) as determined by the licensed physician or licensed mental health professional, the post-traumatic stress disorder arose:
(a) as a direct result of the employee experiencing or witnessing a traumatic event during and within the scope of the performance of regular or assigned duties of the employee; or
(b) due to vicarious trauma experienced by the employee as a direct result of the performance of regular or assigned duties of the employee.
A2886 would apply only to paid first responders, which of course includes law enforcement officers, firefighters, emergency and paramedic personnel, but also extends to 9-1-1 dispatchers, who may only “witness” trauma by telephone.
The first question is why did the Legislature focus solely on medical leaves for PTSD? What about medical leaves for spinal surgery, which are equally common, if not more common? Legislation by diagnosis can become an endless trend. Moreover, federal law under the Family and Medical Leave Act already provides job protection for covered leaves.
This bill calls to mind A2617 which was signed into law on September 24, 2021. That bill provided: “Following a work-related injury, an employer shall provide a hiring preference to an employee who has reached maximum medical improvement (MMI) and is unable to return to the position at which the employee was previously employed for any existing, unfilled position offered by the employer for which the employee can perform the essential functions of the position.”
The problem with A2886 and A2617 is that neither bill is needed since New Jersey law already forbids such discrimination. New Jersey already has powerful anti-discrimination laws, namely the New Jersey Law Against Discrimination and N.J.S.A. 34:15:39.1. Both of these laws protect employees from discrimination. Section 39.1 is contained within the New Jersey Workers’ Compensation Act and protects employees who file workers’ compensation claims from wrongful discharge or discrimination related to the making of a workers’ compensation claim.
The question that legislators must answer is what holes have they suddenly found that need to be filled in the expansive New Jersey Law Against Discrimination?
For more information on the progress of this proposed legislation, contact the undersigned at jcottell@capehart.com.
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Jennifer A Cottell, Esq., is a Shareholder in Capehart Scatchard's Workers’ Compensation Group. Ms. Cottell 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. Cottell at 856.914.2087 or by e‑mail at jcottell@capehart.com.
Practical Advice In New Jersey Workers’ Compensation
The general rule is that an injured worker is entitled to TTD for the time frame that the authorized treating doctor placed the employee out of work.
Pursuant to Monaco v. Albert Maund, Inc., 17 N.J. Super. 425 (App. Div.), 21 N.J. Super. 443 (App. Div. 1952), generally, TTD continues until the employee is able to resume work or until the employee “is as far restored as the permanent character of the injuries will permit” [placed at MMI], whichever happens first. This means that TTD can cease in either of the following situations: a. The employee is placed back to work and authorized treatment is ongoing and continuing; or b. The employee is placed at MMI from treatment, even if the employee is discharged with permanent work restrictions (irrespective of whether the restrictions can be accommodated).
In addition to the above rule, there are some tricky situations where TTD benefits may be stopped for other reasons. Below are hypothetical situations regarding TTD, and how we would recommend handling each scenario.
Scenario 1: Bob works for a large retailer and is injured on February 2, 2022. Bob is receiving authorized treatment and is initially not placed out of work. On March 14, 2022, Bob is caught stealing from the register at work, as well as stealing $4,000 worth of merchandise from the electronics department. The authorized doctor places Bob out of work as of March 17, 2022; it is anticipated he will be out of work for a few months. After an investigation into the theft, Bob is terminated for cause on March 28, 2022. The employer pays TTD from March 17, 2022 through the date of his termination, March 28, 2022. Bob alleges that he is owed TTD from March 17, 2022 onward, as he was placed out of work by the authorized doctor on March 17, 2022 and has not yet been returned to work.
Our position is that Bob is owed TTD only for the date range of March 17, 2022 through March 28, 2022, the date of the termination.
There are quite a few cases dealing with this issue. In all of the cases, the main point comes down to this: The purpose of TTD is to compensate for actual lost wages. As such, in a situation like this, our position would be that Bob is not owed TTD after March 28, 2022.
The most important case on this scenario is Cunningham v. Atlantic States Cast Iron Pipe Co., 386 N.J. Super. 423 (App. Div.), certif. denied, 188 N.J. 492 (2006), where the Court stated that Cunningham must “prove that he actually lost income…because of his disability”. The Court noted that TTD is wage replacement for “actual lost wages”, and not “theoretical or fictitious wage loss”.
The Court in Cunningham was guided by the holding of Outland v. Monmouth-Ocean Educ. Serv. Comm’n, 154 N.J. 531 (1998). In Outland, the Court held that in order for a teacher who teaches during the school year to be entitled to TTD during the summer months, she must prove that she would have had summer employment. The case of Gioia v. Herr Foods, Inc., No. A-0667-10T4 (App. Div. October 11, 2011) also deals with an employee terminated for misconduct (in that case, violation of the employer’s drug policy), and the holding of Gioia makes it clear that TTD is for actual lost wages, not theoretical lost wages. In a case where an employee is terminated for cause, at the point of his termination, he no longer has wages. If there is no actual wage loss, TTD is not owed.
Scenario 2: Nate has been placed out of work by the authorized doctor and is not working. TTD is being issued. The authorized doctor, on May 15, 2022, recommends that Nate undergo a shoulder surgery. Nate receives all surgical clearance and on May 22, 2022, the authorized doctor schedules the surgery to occur on June 5, 2022. However, Nate has a pre-planned vacation June 4- June 18. Then he is moving residences during the end of June, and then will have family visiting during July as well as various other summer activities, so he wants to push the surgery back until at least August 15. Nate asserts that he is entitled to TTD during the time frame of May 22, 2022 through August 15, 2022.
Our position is that Nate is not entitled to TTD during the time frame of May 22, 2022 through August 15, 2022.
Nate is refusing treatment, for reasons that are not related to any health or medical issues. An employee not complying with the authorized doctor’s treatment plan, and treatment schedule, based on a personal reason or personal preference, is not entitled to TTD benefits.
Our position is that if petitioner is not actively treating, or is missing appointments, he is not entitled to TTD under N.J.S.A. 34:15-19, which states that after an injury, an employee must submit himself for physical examination within this state, as often as may be reasonably requested, and, “the refusal of the employee to submit to such examination shall deprive him of the right to compensation during the continuance of such refusal”. Since Nate is failing to, or refusing to, comply with treatment and is not cooperating with authorized treatment, he is not entitled to TTD during his non-cooperation.
Scenario 3: Ronald, an electrician, was injured on January 15, 2022. The authorized doctor places Ronald out of work February 10 through March 1, 2022. On March 2, 2022, Ronald is released to work light duty; the doctor noted that full duty was anticipated on or around April 2, 2022. The employer can accommodate light duty work and can pay Ronald his usual salary in his temporary light duty position; Ronald was offered the light duty position on March 2, 2022. Ronald refuses the light duty position, as he does not want to work “desk duty”; Ronald maintains he is owed TTD from March 2, 2022 through April 2, 2022 (or whenever he is in fact returned to work full duty).
Our position is that Ronald is not entitled to TTD as of March 2, 2022, the date that light duty was offered, and declined.
We recommend relying on Harbatuk v. S & S Furniture Systems Insulation, 211 N.J. Super. 614 (App. Div. 1986) in a situation like his. If the employee is offered a light duty job, and the employee refuses the light duty job, the employer can terminate TTD upon the refusal. For this reason, it is a good idea to put the light duty offer in writing, dated, and reference the date that the authorized doctor placed the employee back to work light duty, and the date light duty could be accommodated, particularly as under Williams v. Topps Appliance City, 239 N.J. Super. 528 (App. Div. 1989), “the burden is on the employer to show that light work was offered to [the employee] and that it was refused”.
The above scenarios re-emphasize two important things to keep in mind with respect to issuance of, and entitlement to, TTD benefits: (1) TTD is to compensate for actual lost wages; and (2) An employee’s refusal to comply with offered light duty and/or the authorized doctor’s recommended course of treatment may be cause for TTD to be terminated.
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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.
Often cases are referred to this insurance defense attorney where the policy was cancelled prior to the alleged date of loss. The claimant-petitioner has retained an attorney and has filed a Claim Petition in the Division of Workers’ Compensation. The petitioner’s counsel has reviewed the New Jersey Compensation Rating and Inspection Bureau website and found the policy which would have been in effect at the time of the date of loss and has named that carrier. The carrier retains counsel and seeks to deny the claim for lack of coverage. The question is whether there is sufficient evidence to prevail on a Motion to Strike Carrier.
Prior to filing a Motion to Strike Carrier, there are certain steps and documents which should be reviewed between counsel and the carrier regarding the effectiveness of the cancellation. In New Jersey, there is a strong public policy favoring uninterrupted workers’ compensation coverage for all employees. As a result, an insurance carrier must strictly comply with all statutory and regulatory mandates regarding any cancellation of a policy.
It is therefore beneficial to review N.J.S.A. 34:15-81, Cancellation of Contract. The Statute lays out three individual steps which must be followed in order for cancellation to be effective. Section 81 states that no policy for workers’ compensation coverage is deemed cancelled until the following three criteria are met:
While the foregoing three steps appear to be straightforward, there are various ways in which a potential issue may arise and therefore result in a finding of improper cancellation. The New Jersey Supreme Court has held that there needs to be strict compliance with the Statute in order for cancellation to be effective. Sroczynski v. Milek, 197 N.J. 36 (2008).
Consider an example of a policy issued to an employer for a policy period beginning on February 1, 2019 through February 1, 2020. During the policy period, the employer fails to make payments on the policy leading to a cancellation. The carrier sends a notice to the employer on July 1, 2019 stating the following:
“We hereby notify you that the policy identified above will be cancelled effective 12:01 a.m. July 30, 2019 in accordance with the cancellation condition of the policy and that all liability of the Company under such policy will cease at that time. Premium adjustment will be made to the date of cancellation and statement rendered. The reason for this action is: Nonpayment of Premium.”
With respect to the first step in cancelling a policy, a notice needs to be generated by the carrier and sent to the employer with at least 10 days’ notice of the date of the cancellation. So far, our cancellation example appears to comply with subsection (a) of the Statute as the notice is sent on July 1, 2019 and gives more than 10 days’ notice.
Subsection (a) of the Statute also states that this notice must be sent by “registered mail.” The Statute does not define “registered mail.” In practice, the carrier should send the notice to the employer by certified mail. The carrier should retain any and all transmittal information with the USPS regarding sending of the notice of cancellation as these documentary proofs are vital in the carrier’s Motion to Strike Carrier for Lack of Coverage.
The sending of the notice of the cancellation to the employer is not the end of the journey for the carrier. The carrier must also submit a “like notice” to the office of the Commissioner of Banking and Insurance. The Statute does not require “exact same notice,” but rather states “like notice.” The Commissioner of Banking and Insurance in New Jersey has designated the Compensation Rating and Inspection Bureau (CRIB) as the entity to receive the like notice.
CRIB requires that the like notice be submitted electronically and has provided a reference form to be used by carriers for the submittal of like notice.
You can download the above form and note that at the bottom of the submittal there is a certification for which the carrier must provide a signatory. The certification is required in the like notice submittal to CRIB. Subsection (b) of the Statute has two clauses which must be adhered to in order for the cancellation to be effective. The first is that the like notice is filed with CRIB, the second is a certified statement must be provided by the carrier that the employer was provided notice in accordance with subsection (a), i.e., that the employer was provided notice of the election to terminate via registered (‘certified’) mail with at least 10 days’ notice. These steps are required.
Finally, the Statute requires one last step for the policy to be effectively cancelled. Subsection (c) of the Statute requires that at least 10 days have elapsed since the filing of the notice with CRIB prior to the cancellation being effective.
Let us return to our example policy which is being cancelled by our hypothetical carrier. The policy period is for the year February 1, 2019 through February 1, 2020 and, due to nonpayment of premium, the policy is being cancelled. The notice of cancellation is sent to the employer via registered mail on July 1, 2019 stating that the policy will be cancelled effective July 30, 2019.
The carrier should at that time submit the like notice to CRIB that the policy is being cancelled with the effective date of cancellation being reported as July 30, 2019.
What then occurs if the like notice to CRIB is not submitted until August 15, 2019 and an injury occurs to an employee at the company on August 5, 2019 and the company did not obtain replacement coverage? In this practitioner’s experience, any issue with the filing of the like notice creates strong arguments by petitioner’s counsel that the policy was not effectively cancelled. The carrier will try to argue that the policy was effectively cancelled July 30, 2019 per the notice to the employer and that it is incumbent upon the employer to obtain proper coverage.
The New Jersey Workers’ Compensation Act provides certain timelines and a procedure which must be strictly complied with in order for the policy to be cancelled. In this example, the carrier did not provide the like notice to CRIB until after the date of the loss. As a result, the carrier cannot show compliance with subsection (b) and subsection (c) of the Statute.
Let us move the date of loss then to August 20, 2019 and the like notice still is submitted to CRIB on August 15, 2019. The carrier can now show that the loss occurred after the date of cancellation and after the filing of the like notice with CRIB. However, again, this fact scenario will likely result in an improper cancellation and a covered loss. Subsection (c) of the Statute requires that at least 10 days have passed since the filing of the notice with CRIB. In this example, only 5 days have expired. As a result, the petitioner will have a strong argument that the policy was still in effect at the time of the loss despite the policy being cancelled as of July 30, 2019.
While the foregoing examples appear to result in simple solutions, Section 81 of the Statute often results in lengthy litigation regarding proper proofs of cancellation. As a result, the carrier should retain detailed documentary proofs and evidence of each step of the cancellation in order to properly seek to be stricken for lack of coverage from a pending claim. Readers with questions on cancellation can reach the undersigned at knagy@capehart.com.
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Keith E. Nagy, Esq., is a Shareholder and Co-Chair 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.
The concept of legal presumptions in workers’ compensation is not new in New Jersey. The first presumption legislation in New Jersey was passed in 1964 concerning volunteer firefighters who contract respiratory disease in certain circumstances. The second presumption legislation was passed in 1988 in regarding to firefighters with cardiovascular or cerebrovascular injuries or death in responding to a law enforcement, public safety or medical emergency. More recently the 2019 Thomas P. Canzanella Twenty First Century First Responders Protection Act and the 2020 Essential Employees Law have generated a great deal of discussion among workers’ compensation professionals, carriers and employers on what legal presumptions in workers’ compensation really mean.
In virtually all workers’ compensation claims (excepting presumption claims), the petitioner has the burden of proof on the issue of compensability as well as on the issue permanency, but in cases involving a legal presumption, the burden shifts to the employer to disprove compensability. In a COVID claim petition involving a presumption, the petitioner must prove that he or she meets the definition of an Essential Employee and that he or she contracted COVID. At that point the respondent must offer its proofs and attempt to rebut the claim by showing more likely than not that the virus was not contracted at work. Hence the notion that the presumption is “rebuttable.”
It is helpful to study the precise language of the New Jersey Essential Employees Law with respect to rebuttable presumptions: The law says: “This prima facie presumption may be rebutted by a preponderance of the evidence showing that the worker was not exposed to the disease while working in the place of employment other than the individual’s own residence.” The last six words simply mean that employees will not receive a presumption for exposure to COVID while working at home.
Some state COVID-19 presumption laws spell out the proofs which legislatively rebut the COVID presumption. For example, the Illinois COVID-19 Essential Employees Law provides specific examples of rebuttal evidence:
New Jersey’s COVID presumption law does not address what sort of evidence may rebut a COVID-19 presumption claim unlike the Illinois law cited directly above. Professor Michael Duff from the University of Wyoming College of Law provides an interesting state-by-state survey on the differences in COVID presumption statutes in his essay entitled “Workers’ Compensation Emerging Issues Analysis.” He points out that the problem with presumption language in states like New Jersey is that judges of compensation have no legislative guidance on types of evidence which statutorily rebut a presumption.
Among the possible kinds of evidence which may rebut a New Jersey claim for COVID-19 are the following:
These are just some examples of evidence that may, in a given case, rebut the legal presumption. One important question that Professor Duff raises is this: what happens to the presumption if the employer does offer strong rebuttal evidence? Does the presumption then disappear with the result that the burden then shifts back to the employee to prove how he or she was exposed at work? The New Jersey statute is silent on this question. The practical answer is that any good petitioner’s attorney who has evidence demonstrating a work source of COVID-19 would then offer such proofs in the face of strong rebuttal evidence.
Trials will eventually occur in the Division of Workers’ Compensation in COVID-19 cases given that thousands of claim petitions have already been filed. Judges will deal with the employer’s proofs on rebuttal of presumptions on a case-by-case basis. One difference between a COVID-19 case and other workers’ compensation cases has to do with medical records. In the ordinary workers’ compensation case the focus is only on the claimant’s medical condition. But in a COVID-19 case, in order to disprove a claim by the more likely than not standard, the employer will often have to argue that someone in close contact to the petitioner was COVID-19 positive. That medical evidence may be pivotal. It may prove challenging in some cases to prove that a non-party to the case to whom the petitioner may have been exposed to COVID was in fact COVID-19 positive.
No discussion on COVID-19 litigation should end without mention of one crucial point. Even if the injured worker is an Essential Employee and compensability is found in favor of the employee, the burden of proof on permanent partial disability always rests on the employee. This means all the same proofs apply as in other compensation claims, namely proof by objective medical evidence of a restriction in the body as well as a significant impact on the employee’s work or non-work life activities. As COVID-19 continues to spread in the United States, one of the observations physicians and scientists have made is that many Americans have contracted COVID a second time or even a third time. How does second non-work-COVID impact litigation and negotiation? Well, consider a case involving a worker who injures his back lifting at work but then has a subsequent non-work back injury before being examined by an expert. That second accident almost always lowers the value of the claim, and in some cases may erode all the value depending on the severity of the second accident. What about someone who has COVID-19 arising from work and then contracts COVID a second time from a home exposure prior to medical evaluation? How does a claimant with second COVID from a home exposure separate the current complaints from the impact of the earlier work COVID? This phenomenon is already happening in COVID cases in New Jersey and in other states. Employers must always ask for all treating records up to the present in any COVID litigation for this very reason.
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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.
