State News : New Jersey

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Counse]: Correct.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

June Chalmers worked at a medical office cleaning the office space with another colleague.  On August 20, 2010, she fell on a piece of pipe while at work and suffered injuries which led to serious infections.  Chalmers didnot file a workers’ compensation claim and obtained treatment on her own.  However, she did file a civil law suit against Dr. Stephen Swartz, (hereinafter “Stephen”) who practiced with his father in the building.  She claimed that she was only employed by Dr. Stephen Swartz’s father, Dr. Harry Swartz, (hereinafter “Harry’), and she argued that she could sue Stephen because he owned the building where the medical offices were located.  Stephen’s attorney filed a motion to dismiss the case on the ground that Chalmers’s suit was barred by the exclusive remedy rule.

The key facts were as follows:  plaintiff Chalmers was hired in 2004 to clean the office.  Both doctors worked on the premises.  Harry began practicing medicine in the building in 1958, and his son Stephen joined the practice in 1987.  Stephen testified in his deposition that he spent ten hours a day treating patients at a local hospital and then saw patients in the medical building in the evening.  Both doctors practiced together, paid all expenses form a joint account, and obtained a workers’ compensation policy naming Harry and Stephen as policy holders.  There were no partnership papers, although the two doctors considered themselves to be in a partnership.

Chalmers contended that only Harry hired her and employed her.  He gave her direction in performing her job.  Harry’s name was on the W-2 forms and he signed her paychecks, although the checks were written on a joint checking account. 

In 2006 Harry transferred title to the building to Stephen for a payment of ten dollars.  Stephen did not charge his father rent. 

The trial judge ultimately granted the motion for summary judgment filed by Stephen and dismissed the case as barred by the exclusive remedy rule.  Chalmers appealed and argued that she not an employee of Stephen.  The Appellate Division began by noting that clearly Chalmers was an employee and was not an independent contractor.  The question was whether she was a joint employee of both Stephen and Harry and therefore unable to sue either doctor.

The court did not feel that analogy to case law on joint ventures was appropriate.  “Because a joint venture is typically entered into for a limited, frequently one-time purpose, those principles have limited applicability here, beyond a general instruction to consider the totality of the circumstances.”  Instead, the court adopted “a commonsense view,” in concluding that Chalmers was an employee of both doctors.

She was paid from a joint checking account in the names of both doctors.  She was covered by a workers’ compensation policy in the names of both doctors.  The policy, including the employee notification poster, listed both doctors as her employers. . . Plaintiff’s work served the purposes of both doctors, because she cleaned the entire building in which the medical practice was located, as opposed to limiting her cleaning services to Harry’s work space. Even if Harry directed plaintiff’s work, there is no dispute on this record that she performed her work for the benefit of both Harry and Stephen, and they both paid for her work. (citations omitted).

For these reasons the Court affirmed the dismissal of Chalmers’ suit.  The Court did, however, allow the case to be transferred to the Division of Workers’ Compensation as if originally filed on time in the Division.  It cited the rule inTownsend v. Great Adventure, 178 N.J. Super. 508 (App. Div. 1981) for the proposition that the Division of Workers’ Compensation was the proper jurisdiction for the claim of Chalmers and allowing the transfer, even if out of time, was in the interest of justice.

            This case may be found at Chalmers v. Stephen J. Swartz, A-1472-12T4 (App. Div. October 8, 2013).

Smile Alvarez worked as an International Service Manager for Continental Airlines.  He flew to Quito, Ecuador on October 21, 2001 and went to check his door to make sure it was in the disarm position.  On entering the airplane’s galley, he tripped and did a near somersault, striking his head, shoulders and neck on the airplane’s floor.  He refused to seek medical treatment in Ecuador.  Instead, he soaked in the hotel hot tub because he felt sore.

            When he returned to the United States, he did not treat at Continental’s Whole Health Clinic in Newark.  He had planned an extended leave of absence to care for his ill mother and therefore took his leave.  He noticed sharp pain radiating down his left arm while on leave.  His hand was also numb.

            In April 2002, Alvarez returned to his job in Houston, Texas.  He was unable to check in for a series of day flights because the pain in his arm was intolerable.  He saw a doctor at Continental’s Whole Health Clinic who gave him ibuprofen and sent him home.  He then went on sick leave and did not return to work for almost a year.

            On April 12, 2002, Alvarez saw Dr. Diaz, a neurologist, who ordered an MRI, which showed a herniated disc.  He filed a workers’ compensation claim in Texas on April 19, 2002.  That claim was denied for untimely reporting. 

            On July 6, 2002, Alvarez underwent cervical fusion surgery.  Later in the month he filed a workers’ compensation claim in New Jersey asserting that he was injured on October 21, 2001. 

            Respondent filed a motion to dismiss the claim for lack of timely notice but the Judge of Compensation denied the motion.  Alvarez testified three times:  twice before the initial Judge of Compensation and a third time on December 14, 2012 before a second Judge of Compensation, who took over the case after the retirement of the first judge. 

            On January 25, 2013, the Judge of Compensation dismissed the case for failure to provide timely notice.  Petitioner appealed and argued that his delay in notifying the employer about his accident should be excused because he had been unaware of the causal link between the accident and the injuries he sustained.  The Appellate Division disagreed with petitioner, noting that the New Jersey Workers Compensation Act requires an employee to notify the employer of an injury at the latest within 90 days.  The court further stated:

N.J.S.A. 34:15-17 ‘serves to insulate employers from having to investigate an onslaught of passing accidents that do not result in injury and therefore do not constitute accidents under the statute.’

The Court added:

While the symptomatology emanating from Alvarez’s fall may have worsened over time, Alvarez was aware of the injury he incurred from the moment he struck his head, shoulders, and neck in the airplane galley.  Such injuries are wholly distinct from their latent and insidious progressive counterparts that prey upon their victims without any prior indication that they were even exposed to injury.

The lesson for practitioners is that the notice defense is viable in New Jersey.  It is a very generous defense in that the employee may be sometimes allowed up to 90 days to notify the employers of injury.  The converse is that the employer does not have to prove that the employee knew his diagnosis for the notice defense to be invoked.For the employer to win a notice defense, the employer must show only that a reasonable person would know he or she was injured in the accident and failed to provide notice within the 90-day period.

            The case can be found at Alvarez v. Continental Airlines, A-3039-12T3 (App. Div. October 18, 2013). 

New Jersey has a very powerful subrogation provision.  That message was emphasized inGreene v. AIG Casualty Company, A-6287-11T4 (App. Div. October 16, 2013), a published decision rendered by the Appellate Division.  It does not matter that the compensation case is ultimately found non-compensable: the employer still can enforce its lien rights as to prior payments made.

            Kelly Greene worked for AIG and was injured on a wet floor in the lobby of the building where she worked.  AIG did not own the building and leased only a portion of the premises.  AIG initially denied the claim but thereafter paid substantial medical benefits without prejudice under N.J.S.A. 34:15-15.  AIG also put Greene on notice of its subrogation rights underN.J.S.A. 34:15-40.

            After investigating the lease agreement further, AIG eventually denied the claim as not arising out of the employment.  In the interim, Greene recovered $225,000 in a civil action against the landlord.  AIG sought reimbursement from Greene for two thirds of its workers’ compensation payments of $118,804. 

            Greene took the position that AIG was not entitled to reimbursement of its workers’ compensation lien if the case was found not compensable.  Counsel for both petitioner and AIG reached agreement that the case was not compensable given that AIG did not own or control the lobby area where the accident occurred.  The only issue was whether AIG was entitled to $79,203, representing two thirds of its payments. The Judge of Compensation held that since the case was not compensable, AIG was not entitled to its subrogation rights.  The Judge concluded:

Section 40 is a part of the Workers’ Compensation statute.  It is applicable in situations involving workers’ compensation claims and cannot be taken out of context to apply generally.  If the claim is determined not to be compensable, the section is inapplicable.  If it is compensable, the section applies.

            AIG appealed from the order denying lien reimbursement.  In a decision of first impression, the Appellate Division reversed the decision of the Judge of Compensation and held that AIG was entitled to reimbursement for  two thirds of its payments of $118,804, notwithstanding that the claim was non-compensable.  The court wrote:

Contrary to petitioner’s argument, nothing in either Section 15 or Section 40 conditions reimbursement of the claim from a third-party settlement on whether the benefits the employer paid were owed in the first place. Section 15 expressly provides that any payments the employer makes are without prejudice to a defense of non-compensability, and Section 40b allows the employer reimbursement from the third-party recovery if the sum recovered by the employee is ‘equivalent to or greater than the liability of the employer.’”

The Court went on to state that its holding is consistent with the remedial purpose of the Act by “making benefits readily and broadly available to injured workers through a non-complicated process.”Tlumac v. High Bridge Stone, 187 N.J. 567 (2006).  The court said that this policy encourages employers to make prompt voluntary payments because it provides much needed medical and wage loss benefits to claimants while their claim is being investigated.  In addition, the court said that its decision is consistent with the policy in New Jersey against double recoveries.

            In an interesting twist, petitioner argued that she was penalized by AIG’s voluntary payments in this case because she would have been better off, in retrospect, by directing the medical treatment through her health insurance, thereby not having to reimburse the carrier.  The court disagreed with this view, relying on the collateral source rule,N.J.S.A. 2A:15-97.  “Under our collateral source rule, petitioner would have been obliged to disclose to the court any amounts she received from her health insurer and they would have been deducted from any tort judgment.Perreira v. Rediger, 169 N.J. 399 (2001). Accordingly, had petitioner’s health insurer paid her medical expenses instead of AIG, the benefit would have accrued to the third-party tortfeasor, not to petitioner.”

            This case is the only published decision on this rather unusual issue. The undersigned handled the appeal of this case for AIG.

Once again a plaintiff has failed to get past the exclusivity provision in the New Jersey Workers’ Compensation Act.  InEstate of Samuel Sellino and Phyllis Sellino v. Pinto Brothers Disposal, LLC., A-2064-12T1 (App. Div. September 23, 2013), the Appellate Division considered whether an employer could be sued for allegedly removing or bypassing a neutral relay switch leading to a tragic death.

Samuel Sellino worked for Pinto Brothers Disposal, LLC (Pinto Brothers).  On October 17, 2008, Sellino was working in Long Beach Township with Chris Pinto.  Sellino was driving the truck, and Pinto was getting on and off the truck to throw brush in to the garbage compactor.  Arriving at one house, Sellino exited the truck, and left the vehicle in drive with the parking brake engaged.  The truck started rolling down the street, and Sellino and Pinto pursued it.  Sellino fell under the wheels of the truck and died. 

The company policy was that drivers must remain inside the cab and are not to leave the cab to assist co-workers.  One witness testified that Sellino had been told not to leave the truck before the fatality occurred.

            Plaintiffs filed a suit and alleged that Pinto Brothers removed or bypassed a “neutral relay,”  which was an electrical switch that required the vehicle to be in neutral in order for the compactor to function.  The evidence was unclear whether the company did in fact remove or bypass the neutral relay but for purposes of the motion to dismiss the law suit, the court assumed that the company did bypass the switch.  Plaintiff’s expert testified that the death would not have occurred had the neutral safety switch not been bypassed.

            Pinto Brothers moved to dismiss the law suit and prevailed at trial, arguing that the suit was barred by the exclusivity provision of the New Jersey Workers’ Compensation Act.  The Appellate Division affirmed that ruling.  The court said, “ . . . bypassing the neutral relay created a risk of injury to its employees.  This falls short of showing that Pinto Brothers acted with knowledge that such action was ‘substantially certain to result in injury or death to the employee.’”  The court noted that just knowing that a workplace is dangerous is not the same as engaging in intentional wrong.

            The court also held that the type of accident that happened in this case is a fact of industrial life.  Indeed, Phyllis Sellino, the widow, testified that she was aware of injuries suffered by other garbage truck drivers involving similar factual situations.  Sellino himself was the driver of a truck that ran over an employee in the late 1980s.  “Accordingly, Sellino’s death and the circumstances in which it occurred cannot be considered to be ‘plainly beyond anything the legislature could have contemplated as entitling the employee to recover only under the Compensation Act,’ “ (citations omitted).

            This case underscores a recurring theme that intentional harm suits must meet an extremely high burden of proof  in New Jersey and in fact, it is truly only the most rare case that can meet this standard.

Opioid medications have become a major problem in the New Jersey workers’ compensation system.  The number of workers being prescribed opioids has increased dramatically along with other attendant issues, such as addictions to the medications, excessive periods of use, and large numbers of unused opioid pills.  Every workers’ compensation professional can attest to these and other problems with opioid medications, including cases where urine testing shows no trace of opioids in the system despite repeated renewals of prescriptions.

            A draft of a bill to be introduced in the New Jersey Senate proposes that medical expenses shall not include coverage of opioid drugs unless the prescribing doctor does the following:

            1) takes a thorough medical history and physical examination focusing on the cause of the patient’s pain;

            2) does a complete assessment of the potential addiction of the patient to opioids, which would include a baseline urine test and assessment of past and current depression, anxiety disorders and other mood disorders associated with risk of opioid abuse;

            3) provides a written treatment plan with measurable objectives, a list of all medications being taken and dosages, a justification for the continued use of opioid medications, a description of the pain relief from the medications, documentation of attempts at weaning, a description of how the patient responds to the medication, and alternative treatments under consideration;

            4) provides a description of either sustained improvement in function and pain reduction or consultation with a pain management specialist (if the dosage exceeds 120 mg morphine-equivalent dose or if the duration of treatment exceeds 14 days);

            5) provides an explanation to the patient of the risks and benefits of the prescribed medications and expected duration of treatment.

            The Act will allow an employer, carrier or TPA to disqualify any physician from its network who fails to provide such documentation.  If approved, this Bill would be a major step forward for the New Jersey workers’ compensation system.  New Jersey is a member of the National Prescription Drug Monitoring program, which allows physicians to check on an electronic database for prior or current prescriptions for controlled substances before dispensing narcotic pain medication to a patient. 

The PDMP program along with this proposed bill would go a long way to curb the abuse of opioid medications in workers’ compensation, often among patients who have a history of problems with opioids and other controlled substances.  The bill simply establishes a list of best practices that physicians would need to follow in order to prescribe opioids in the workers’ compensation system, as well as in personal injury protection coverage in automobile insurance. It would not prevent the dispensing of medications to those with chronic or short term pain; it would simply require the physician to undergo careful written analysis before making the decision to prescribe opioid drugs.  Many pain management doctors already engage in these practices and require their patients to sign pain management contracts allowing for urine testing.  However, not all physicians who prescribe opioid medications follow these practices, and this Bill is aimed squarely at those physicians

Nancy Haley worked as a Registered Nurse for Community Mercy Health Partners doing business as Springfield Regional Medical Center (hereinafter SRMC).  She began there in June of 1978.  In November 2009, she was diagnosed with breast cancer and underwent two surgical procedures.  She took approximately five and a half weeks of FMLA leave during this time period and returned to work on January 18, 2010.

SRMC had a progressive discipline policy which involved discipline pursuant to “Corrective Action.”  There were four steps in the Corrective Action process, the first of which was an oral warning.  The second step involved a written warning, the third a “final warning,” and the last led to termination. 

In the summer of 2009, SRMC issued a written warning because Haley missed pages while she was on call.  She did not initially respond to the hospital’s page, was called at home, and arrived at the hospital 37 minutes after the initial page on June 2, 2009.  A similar incident occurred a month later.

SRMC placed Haley on level three discipline in November 9, 2009 for two incidents involving patient “site marking,” which required marking the site of surgery for the surgeon.  On October 9, 2009, Haley took an unmarked patient in the operating room. 

Haley used several FMLA days in 2010 for her serious health condition.  The last FMLA day was April 16, 2010.

On February 12, 2010, Haley’s husband was transported to SRMC with a serious heart condition.  Haley contacted SRMC regarding her inability to work her shift that day and the next two days. SMRC marked her absence on February 12, 2010 as unexcused.

Three days after returning from her April 16, 2010 FMLA leave, SRMC terminated her employment.  Haley’s absence on February 12, 2010, when she was with her husband, was listed as one of the three unexcused absences on the Corrective Action form completed in support of her termination.  Her three unexcused absences along with 11 instances of tardiness were listed as the reasons for placing her at the final termination stage.

Haley sued for violations of her FMLA and ADA rights.  She argued that her cancer condition was covered under the ADA. The court said, “Haley’s cancer was a physiological condition affecting multiple body systems and was treated by a mastectomy, resulting in an anatomical loss.  It unquestionably qualifies as an impairment under the ADA.”

Next, the court considered whether that impairment substantially limited a major life activity with reference to the Americans with Disabilities Act Amendment Acts of 2008. “A major life activity may also include ‘the operation of a major bodily function’ such as ‘’normal cell growth.’”The court added:

A reasonable jury could conclude that Haley was disabled under the ADA, and therefore fulfills the first element of her prima facie claim  She was obviously disabled when the cancer was active, as it substantially limited the major life activity of normal cell growth.  In addition, the cancer substantially limited the major life activity of her work.  Haley took extensive time off for surgery and recuperation between the end of November 2009 and January 18, 2010, during which time she could not work at all.

The Court noted that it does not matter that the cancer was in remission at the time her employment was terminated.  She was still covered under the ADA.

SRMC argued that Haley said in her deposition before trial that she did not consider herself disabled.  The court said that Haley’s own statements “are not particularly probative of the determination of whether she is disabled under the ADA, which is a legal definition quite distinct from the colloquial meaning of ‘disabled.’”  The Court held that Haley made out a prima facie case and therefore denied SRMC’s motion for summary judgment, leaving the matter for the jury to decide.

On the FMLA issue, the court held that a jury “could reasonably conclude that Haley gave sufficient and timely notice that FMLA leave might apply to her absence on February 12, 2010, because SRMC knew of it the day it occurred and it concerned her husband’s serious medical condition.”  The court said that a reasonable jury could conclude that SRMC denied her FMLA leave by categorizing her February 12, 2010 absence as unexcused.

This case is a reminder to employers to fully analyze FMLA and ADA considerations before making termination decisions, even if there is a specific step plan of discipline in place. The case may be found atHaley v. Community Mercy Health Partners, 2013 U.S. Dist. LEXIS 11193 (January 28, 2013).