State News

         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.

PENNSYLVANIA COMMONWEALTH COURT FINDS LAST EMPLOYER

NOT LIABLE FOR ALLEGED CUMMULATIVE TRAUMA WORK INJURY

A & J Builders, Inc./SWIF v. WCAB v Verdi (Pa. Cmwlth. 10/16/13)

By

Jeffrey D. Snyder, Esquire

This is a cumulative trauma case where the last employer in time was absolved of liability.

A Union carpenter was assigned through the Union to various employers.  The Claimant worked for A & J Builders, Inc. from August 2004 to September 5, 2007, and for J. V. Miller (Miller) for three (3) days until a final day of employment on October 6, 2008.

In pertinent part, there was a Claim Petition first against Miller and then a second Claim Petition was filed against A & J. 

The Claimant claimed a right knee injury from repetitive use in his usual job activities of carrying and installing drywall panels.  The Claimant was symptomatic at A & J Builders and continued to have discomfort, alleging that his knee was filled with fluid, when working for Miller.  He was laid off from Miller because the job was finished.

The Claimant’s physician attributed the Claimant’s knee discomfort to duties at both A & J and Miller.  Miller presented its medical expert, Dr. Duda, who considered the changes degenerative, with no contribution by job duties.  The WCJ credited the Claimant’s testimony to the extent that it focused on duties at A & J and rejected it as to contribution by job duties at Miller, the last employer in time.  The Judge relied in part on defense medical evidence absolving Miller. 

The major focus on appeal was twofold: whether the 120 notice requirement was met; and whether the last employer on the risk, Miller, was liable. The Court accepted a discovery rule on notice and found the notice timely based on a physician informing the Claimant of work relatedness. 

On the assignment of liability issue, the employer argued that the Judge’s finding that the last employer in time was not responsible was not supported by substantially competent evidence.  The Court pointed out that to the extent the Claimant’s medical expert found material aggravation of the knee at Miller, that conclusion was rejected in favor of the employer’s medical evidence suggesting no contribution by activities at Miller. 

The employer argued that the Judge could not rely on the employer’s medical expert testimony because that physician did not think any job duties at either entity contributed to the condition, but the Court noted that the WCJ was free to accept or reject any testimony, in whole or in part.  The Court cited to the record evidence that established no traumatic incident at Miller.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

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).

Nancy Turner v. WCAB (City of Pittsburgh), No. 347 C.D. 2013 (Pa. Cmnwlth. Ct., October16, 2013)

By: Jeffrey D. Snyder, Esquire

This Appeal was from the granting of the employer’s Suspension Petition.  The Commonwealth Court vacated and remanded the Workers’ Compensation Judge’s granting of the Suspension Petition. 

The Claimant was injured in a work related motor vehicle accident in 1994, in the course and scope of her employment as a police officer.  A Notice of Compensation Payable was issued, after which the Claimant returned to work in a modified duty capacity.  The Claimant accepted a disability retirement and did not seek work thereafter.

Her Heart and Lung benefits converted to Workers’ Compensation benefits, based on a determination that her injuries were of a lasting and indefinite nature.

Years later, an IME found that the Claimant had some capacity to work, with a Petition to Suspend being filed by the employer, asserting that the Claimant’s Compensation benefits should be suspended based on her voluntary removal from the work force.  The Claimant shoots back that her withdrawal from the work force was involuntary.

The Claimant said she would not have applied for a disability pension if her job had not been removed.  Although she agreed that she was not seeking employment, she had enrolled in a Community College where she was taught how to right a resume and participate in interviews.  The Claimant completed that program and then entered into an office technology program.

The WCJ granted the Petition to Suspend, accepting the Claimant’s testimony as generally credible, but rejecting her allegation that she had not voluntarily withdrawn from the work force “as she clearly has work capabilities and has admittedly not looked for work since retiring.”  The WCJ found that the employer had no obligation relative to providing alternative employment under the circumstances, given the Claimant’s retirement.

The Board remanded for additional evidence on the question of whether the Claimant was forced into retirement as a result of the work injury.  The Claimant testified on remand that she tried to go back to a job but could not continue due to pain.  The WCJ again granted the Petition to Suspend, finding that the Claimant was capable of performing work within restrictions, but that she had voluntarily removed herself from the labor market.  The WCJ concluded that the Claimant failed to establish that she was forced into retirement because of her work injuries or that she looked for work after retirement. 

The Board then affirmed the Workers’ Compensation Judge’s Decision on Remand, finding that after an employer establishes that a Claimant has received a disability pension, and a Notice of Ability to Return to Work has been issued, indicating restored earning power, the burden then shifts to the Claimant to rebut the presumption of voluntary withdrawal from the work force. 

The Board specifically stated that the Claimant had no legal obligation to look for work prior to the issuance of the Notice of Ability.  The Board nevertheless relied on the Claimant’s admission that she had no intention of returning to work at the time she accepted her disability pension, along with the fact that she only enrolled in a skill training program after receiving the Notice of Ability. 

On Appeal to the Commonwealth Court, the Claimant specifically took issue with the concept that the receipt of a Notice of Ability, as well as the receipt of a disability pension, is sufficient to raise the presumption of her intention to withdraw from the work force. 

The Commonwealth Court agreed with the Claimant, as the Court reviewed the relevant case law regarding the burden of proving job availability in the context of a claim of voluntary retirement from the work force. 

The Commonwealth Court noted that an employer was not required to establish job availability where it can demonstrate that the Claimant has voluntarily removed himself from the work force through retirement, citing toSEPTA v. WCAB (Henderson), 669 A.2d 911 (Pa. 1995). The Court relied upon the Supreme Court’s ruling inSEPTA, which held that to avoid a suspension, a Claimant must show that he or she is actively seeking employment after retirement, or has been forced into retirement because of a work related injury. 

The Commonwealth Court held that to avoid a suspension of Workers’ Compensation benefits, after a withdrawal from the workforce, a Claimant must show that he or she is seeking employment, post-actual retirement, or has been forced into retirement because of a work-related injury.

The Commonwealth Court’s Opinion in Turner specifically referenced the Supreme Court’s adoption of the totality of the circumstances test in withdrawal from the work force cases, specifically citing to the Supreme Court’s decision inSEPTA.  The burden of persuasion remains with the employer to persuade the trier of fact that there is substantial competent evidence of record to establish that a Claimant is able to work post-retirement, but nevertheless is not actively seeking employment and has, therefore, removed themselves from the work force.

In Turner, the Commonwealth Court held that the Claimant’s receipt of the disability pension merely reflected her inability to perform the pre-injury job, and was not proof that the Claimant could not perform any work whatsoever.

Ruling in favor of the Claimant, the Commonwealth Court again remanded the matter back to the WCJ to make further findings as to whether the receipt of the Claimant’s disability pension alone raised the presumption that the Claimant had retired from the work force, therefore, requiring a more complete record be made by the Workers’ Compensation Judge in compliance with the totality of the circumstances standard.

In a Concurring Opinion, Judge Simpson indicated that the issuance and receipt of a Notice of Ability should not become a per se rule as to when a Claimant would have the duty to seek employment, but rather the Notice of Ability should be evaluated by the factfinder in the course of considering the weight of evidence.

Again, the proof must be substantial, in order to convince either a Workers’ Compensation Judge, the Appeal Board, or the Commonwealth Court that an employer has satisfied its burden of proving a voluntary withdrawal from the work force, as opposed to the Claimant being able to prove that the withdrawal is voluntary, and has been caused by the work injury.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

PENNSYLVANIA WORKERS’ COMPENSATION CLAIMS

INVOLVING FAMILY MEMBERS AND CASUAL LABOR

By

Kevin L. Connors, Esquire

Recently, the National Workers’ Compensation Defense Network, with ConnorsLawLLP being the Pennsylvania representative thereof, was asked to answer several questions regarding possible scenarios posed by an out-of-state insurer, seeking to access potential liabilities that might exist for Workers’ Compensation Claims involving family members and casual labor.

Our analyses of the scenarios are set forth below:

I.          UNPAID FAMILY MEMBER SCENARIO:

The insured has an employee who is an unpaid family member, and the unpaid family member does not receive any payroll from the business.  No insurance premiums were collected by the insurer for the employee.  The employee is injured, and the insurer is asking if there is any Workers’ Compensation coverage for this employee?

The insurer also asked a second question as to whether the potential coverage issue would be different if insurance premiums were collected by the carrier, utilizing a calculation of hours worked times minimum wages for premium purposes.

In response, we answered that if an unpaid family member is injured during the course and scope of their unpaid employment with the family business, there would be Workers’ Compensation coverage for the injury claim, as the injured employee would be entitled to receive Workers’ Compensation benefits and those Workers’ Compensation benefits would be payable under the insurance policy issued by the insurer to the insured employer.

In this scenario, if Workers’ Compensation benefits are paid to the injured unpaid employee, the insurer would have a right to audit the employer for additional uncollected premiums.  If the injured unpaid employee is, however, only entitled to receive medical compensation benefits as there were no wages paid to the employee, the absence of any pecuniary benefits being paid whatsoever, to include there being no ancillary benefits for payments of health insurance premiums, pension benefits, etc., there would, in this scenario, be no wages upon which to base a calculation of indemnity compensation benefits, the same also being dependent upon the injured family employee not being concurrently employed for wages elsewhere.

The second part of the question is asking whether or not the coverage issue would change if insurance payments had been collected by the carrier utilizing a calculation of hours worked times minimum wages for premium purposes.

The second part of the question does not change how the Pennsylvania Bureau of Workers’ Compensation Act is administered by the Bureau’s Workers’ Compensation Judges, as they would only consider the compensability issue, as the WCJ’s would not look at the coverage issues between insurer and insured, as those issues are contractual and do not neatly tie into compensability issue as to whether or not an injury has occurred within the course and scope of employment, resulting in the unpaid, injured family member being entitled to reasonable, necessary, and related medical treatment for their work-related injury.

II.        UNPAID FAMILY MEMBER IS INJURED WHILE BEING PAID UNDER THE

            TABLE:

Is there Workers’ Compensation coverage in the event of an injury claim, in a scenario where an unpaid family member is injured while being paid under the table?

Under the Pennsylvania Workers’ Compensation Act, the answer must again be, “yes”, as an injury has been sustained by an employee during the course and scope of their employment, and the method of payment, herein “cash under the table”, while, perhaps, intended to be “off the books”, would still be interpreted as wages paid for services rendered. 

In this situation, the insurer’s remedy, after becoming responsible for the payment of the Workers’ Compensation benefits, would be a collection or audit action against the insured for failing to report wages that otherwise should have been used to calculate insurance premiums for workers’ compensation coverage.

The second part of this question was whether the coverage analysis would change if insurance premiums had been collected by the insured, utilizing a calculation of hours worked times minimum wages for premium purposes? 

The answer to that question is that the compensability issue would not change, as compensability is still dependent upon an analysis as to whether an employee has sustained a work-related injury in the course and scope of their employment; the issues of whether the insurer has collected premium for the injury is not relevant before a Workers’ Compensation Judge for the purposes of determining compensability issues; however, it is relevant for the insurer’s claim against the insured for breach of contract, and failure to report paid wages necessary to correctly calculate insurance premiums.

III.       CASUAL LABOR FOR SERVICES:

If an insured hires casual labor, such as a neighbor college student to perform lawn mowing services during the several summer months at the insured’s dental office location, and the insured pays the neighbor college student cash payments, if the neighbor college student is injured at the dental practice, is there Workers’ Compensation coverage for this claim through the dental practice’s Workers’ Compensation insurance coverage.

The answer to this question is that the commercial business, whether a dental practice or otherwise, would not appear to be liable for Workers’ Compensation benefits, as the casual laborer’s services would more probably be characterized as work being performed by an independent contractor, and not under the direction and control of the commercial business, such that any work performed is independent of the business, there being master/servant or employer/employee relationship.

As is well-established under Pennsylvania Workers’ Compensation Law, the existence of a master/servant or employer/employee is a necessary precedent to establish that an injury occurs within the course and scope of employment, a condition precedent to liability for Workers’ Compensation benefits attaching.

Ancillary to this question is whether this answer would change if the dentist had maintained records of payments made by the dental practice to the neighbor college student, with the answer being since there is no change in the nature of the relationship, that of an independent contractor relationship, that there is, again, no master/servant or employer/employee relationship, the same again being necessary conditions precedent to establish that an injury has occurred within the course and scope of employment. 

Obviously, it is always better to have a written agreement between the parties, but that is rarely the case in situations like this.

IV.       CASUAL LABOR FOR ONE DAY:

Here, the insured, again a commercial dental office location, hires casual labor, or a buddy, to help out on a one day job, whether it be to mow the lawn, or just do some office repairs, and the insured pays the laborer or buddy cash under the table, and the casual labor or buddy is injured, begging the question as to whether or not there is workers’ compensation coverage for the injury.

Again, this scenario appears to be an independent contractor scenario rather than an employer/employee relationship, particularly given that the job at hand is limited to one day, and the job itself is not directly controlled by the commercial business, such that it is highly unlikely that workers’ compensation benefits would be payable under this scenario.

The caveat to this is that there are some Workers’ Compensation Judges in Pennsylvania who might award benefits on this type of claim for the very simple reason that there was no formal agreement between the parties, such as a written contract clearly delineating that the work would only be for one day and that it was independent of the employer/employee relationship.

The risk for this type of scenario is that the injured worker claims that they would have been asked to work for more than one day, such that it is not work that is considered “casual”, as the commercial business might have believed, leaving the perception as to how long the job would last, or the work would continue, to be based upon the subjective perceptions of the parties, always a dangerous position to be in.

While there are some Pennsylvania Workers’ Compensation Judges who might find this claim to be compensable, any award of Workers’ Compensation benefits on these skeletal facts would scream for the business found to be the employer to file an appeal, based on the grounds that it was not an employer, that the work could not withstand the course and scope of employment factors as there was no master/servant or employer/employee relationship, and that the person injured was truly an independent contractor.

Generally, it is our impression that more than 90% of the Workers’ Compensation Judges in Pennsylvania would find this type of claim to be not compensable, and they would deny the claim if the casual laborer petitioned for Workers’ Compensation benefits.

Another caveat to this scenario is that there might be third-party negligence liability under this type of claim, and the claim would, therefore, have to be analyzed as to which form of coverage, commercial liability versus commercial workers’ compensation, might be better utilized to control the potential exposure associated with this type of claim.

Obviously, we encourage our clients to contact us with questions regarding Pennsylvania Workers’ Compensation issues.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

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). 

Now that I have your attention, let me elaborate. An Australian federal employee was on a business trip when she met up with a man and had sex with him in her hotel room. While engaged in the act of intercourse, a light fixture above the bed fell onto her face causing injury to her nose and mouth. In addition to her claim for physical injuries, the claimant alleged depression.

The administrative tribunal denied benefits because it determined that sex is not an ordinary incident of an overnight stay such as showering, sleeping, or eating.

A Federal Court Judge overturned the decision analogizing the sex act to playing a game of cards. In his opinion, if she had been injured while playing cards in her room it would be compensable and, therefore, she should also be compensated for her sex injuries. There was no comment on how a light fixture might come loose while playing cards but, then again, there was also no comment on how the light fixture came loose during the sex act.

Fortunately for the employer, the High Court agreed with the rational of the administrative tribunal and ruled that benefits were not owed. The Australian Employment Minister hailed the ruling as a victory for common sense.

_______________________

About the Author

This article was written by Michael I. Fish, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atmfish@fishnelson.com or any firm member at 205-332-3430.

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.