Law Alerts

WORKERS' COMPENSATION

New Jersey
By Mark B. Spivak, Esq. (mbspivak@mdwcg.com or 856-414-6037)

Rafael Alvarado was killed after falling off of a forklift at work. Following his death, dependency actions were brought on behalf of his youngest daughter by her mother, while another dependency action was brought on behalf of his two older daughters from another mother. While the respondent's answer initially contested the youngest daughter's dependency, the respondent had quickly agreed to pay dependency benefits. Since the parties could not agree to apportionment between the dependents, the respondent made a voluntary offer of dependency benefits to be split evenly between the three daughters, subject to a later order of the court determining apportionment. The offer was made after 25 weeks since the daughters had not agreed to a split.

A split was later agreed upon, to be apportioned one half to the youngest daughter, and the other half to be split evenly between the two other daughters. The attorney for the youngest daughter filed a claim for a full fee, arguing that the offer of dependency benefits was not bona fide. The Judge of Compensation found that the offer was bona fide since it was made within 26 weeks. But the Appellate Division reversed, finding that Section 64 of the workers' compensation statute required that the offer must: (1) satisfy the duty imposed by statue - to pay benefits promptly and continuously; (2) literally comply with Section 64; (3) impose on the employer the duty to make an unqualified and unconditional offer of compensation; and (4) the offer must be made (a) at a reasonable time, (b) prior to any contested hearing and (c) prior to the 26-week period specified in the statute. The court noted that it may consider any unreasonable delay in accepting the claim by the respondent.

It noted that the trial judge considered only whether the payment was made within 26 weeks and not whether it was before any contested hearing, i.e. any hearing in which the parties were ready to present proofs of dependency given that the respondent had initially denied the dependency of the youngest daughter. Further, the Appellate Division found that the trial court needed to reconsider the application of the provision allowing the minimum $50 fee as the award could not exceed the amount paid by respondent. This was based on the fact that the attorney for the daughter received a resolution of 50% of full dependency, as opposed to the voluntary payment of one-third of full dependency.

After being injured in a work accident, the petitioner filed a motion for medical and temporary disability benefits. After an initial denial of the motion, she received surgery and filed a subsequent motion for past benefits. Although the respondent raised issues as to whether the petitioner properly requested medical benefits, the court entered an Order requiring both temporary disability and medical benefits. The respondent filed a motion for reconsideration, which was subsequently withdrawn, and no appeal was taken. The permanency aspect of the case ultimately went to trial; however, the respondent in the pretrial memorandum did not raise issues of causation.

The Appellate Division noted that an Order on a motion for medical and temporary has been identified by the courts as a final judgment, from which a respondent may appeal, rather than waiting for the end of the case. The failure to appeal, combined with the withdrawal of the motion for reconsideration, as well as the fact that the respondent never sought to vacate the Order during the case, led the Appellate panel to deny the respondent outright. Further, the respondent's argument that it was not allowed to challenge causation at the trial was unmerited, since it failed to raise the issue in the pretrial memorandum.

John Basil had a workers' compensation injury in 1996, for which the respondent provided medical treatment through its insurer, Transportation Insurance Company (TIC). Because of additional complaints of pain after authorized treatment ended, TIC sent Mr. Basil for an IME with Dr. Frank Wolf, a retired physician only performing evaluations. Dr. Wolf evaluated Mr. Basil, noting an "area of fullness," that was not investigated further, despite his later deposition testimony that he suspected a possible tumor. Dr. Wolf recommended only physical therapy and follow up as necessary, which was authorized by TIC. Dr. Wolf became concerned over complaints of pain and suggested that Basil contact the insurer regarding authorization for a doctor in his area to perform additional studies.

It should be noted that Mr. Basil filed a workers' compensation claim for his work-related injuries, which was resolved in the amount of $19,975 under Section 20, a full and final dismissal of his work-related claim. Unfortunately, after that case concluded, Mr. Basil was diagnosed with stage IV sarcoma and passed away. A negligence action was filed against Dr. Wolf, as well as TIC Insurance.

The court found that the exclusive remedy available to Basil's estate was in the workers' compensation court and that case had been resolved under Section 20. The court disagreed that TIC was liable as a third party, since it was properly performing its investigation in the context of the workers' compensation claim and the resolution of that claim resolved its obligation to investigate treatment. Further, TIC did not have vicarious liability for Dr. Wolf's negligence in treatment simply by engaging his services in the context of the workers' compensation claim.

In this case, the claimant commuted her workers' compensation benefits for a 1985 work injury in 1997. In a Stipulation regarding the Commutation, the employer agreed to remain responsible for reasonable, necessary and related medical expenses. In 1996, employer requested Utilization Review of medical treatment the claimant received from a provider, and a determination was issued concluding that the treatment was not reasonable or necessary. The claimant filed a petition challenging the determination, which was resolved by a Stipulation wherein the employer agreed to payment for limited treatment by the provider. Years later, the claimant began treating with a new provider, who was at the prior provider's former location. The employer denied payment for the treatment received by the claimant based on the prior Utilization Review Determination and because the treatment rendered by the new provider was essentially the same as that rendered by the old provider.

The Commonwealth Court held that, in light of their decision in Bucks County Community College v. W.C.A.B. (Nemes, Jr.), 918 A.2d 150 (Pa. Cmwlth 2007), the employer may not refuse payment of medical bills based on a prior Utilization Review Determination that similar treatment rendered by a different provider was unreasonable and unnecessary. In the court's view, the employer unilaterally refused payment for medical treatment and should have filed a Utilization Review Request for the treatment rendered by the new provider if it wanted to challenge the reasonableness and necessity of that treatment. The court remanded the case to the Workers' Compensation Judge for a determination of penalties.

In this case, the employer filed a Termination Petition that was dismissed by a Workers' Compensation Judge. In dismissing the petition, the Workers' Compensation Judge noted that the Notice of Compensation Payable described the claimant's injury as a lumbar strain. But the Workers' Compensation Judge indicated that the claimant's doctor diagnosed the claimant with a herniated L4-L5 disc and post-traumatic lumbar radiculopathy at the L-5 level, caused or aggravated by the work injury. The decision was not appealed by the employer.

Later, the employer filed a second Termination Petition, which was ultimately dismissed by the Workers' Compensation Judge based on a determination that the testimony of the employer's medical expert was insufficient to support a termination of benefits. According to the Workers' Compensation Judge, the opinion of the employer's medical expert, as well as the expert testimony, did not address the claimant's herniated L4-5 disc or lumbar radiculopathy.

The Commonwealth Court affirmed the decision of the Workers' Compensation Judge. The court concluded that, even though the Workers' Compensation Judge in the first Termination Petition did not formally amend the Notice of Compensation Payable, once the Workers' Compensation Judge found that the claimant suffered a herniated L4-5 disc and lumbar radiculopathy, these became the accepted injuries. The court further held that the testimony given by the employer's expert that the claimant fully recovered from all low back injuries was still legally insufficient to support a termination, in that it was clear from the record that the employer's expert did not recognize the specific, work-related injury.

In this case, the claimant suffered an injury to his left index finger in 1976. the claimant signed a Final Receipt after returning to work and later filed a Petition to Set the Final Receipt Aside. This petition was litigated extensively at the Judge and Appellate level. In 1984, the finger was amputated. After the employer filed a Petition for Suspension / Review of Benefits, the parties stipulated the claimant was entitled to specific loss benefits. The only issue was whether the claimant's specific loss benefits should be calculated based on his average weekly wage at the time of the original injury in 1976 or the date of the amputation in 1984. The Workers' Compensation Judge found that benefits should be calculated based on the claimant's 1976 wages. However, the Appeal Board disagreed, concluding that benefits should be based on the claimant's 1984 wages. The Commonwealth Court affirmed. (See, J.G. Furniture Division/Burlington v. W.C.A.B. (Kneller), 862 A.2d 689 (Pa. Cmwlth. 2004).

The Supreme Court agreed with the Commonwealth Court and held that the claimant's benefits should be calculated based on the claimant's average weekly wage in 1984. According to the Court, the amputation in 1984 was not a mere recurrence of the prior temporary injury. The Court found that the amputation occasioned by the earlier injury, for which a Final Receipt was executed, was neither a recurrence nor an aggravation of the initial injury but constituted a separate, compensable specific loss injury. The Court also held that the insurance carrier at the time of the amputation was responsible for payment of the claimant's specific loss benefits.

An important case has just come down from the Commonwealth Court which will be very helpful to employers when defending against penalty petitions and petitions for unreasonable contest. On January 28, 2008, the Commonwealth Court decided the case of Chris Gumm v. W.C.A.B. (J. Allan Steel). In this case the claimant sought penalties and an unreasonable contest on a claim where a Temporary Notice of Compensation Payable (TNCP) had been issued, properly rescinded, and a Notice of Denial had then been issued checking Box 4, "Although an injury took place, the claimant is not disabled therefore..." The court held that no penalty or unreasonable contest was warranted in this situation. In short, the court held that, even though the Denial admitted that a work injury took place, the employer had mounted a significant challenge as to the nature of the injury and the lasting extent of any disability. The court held that there was no improper use of the Notice of Denial since the employer was challenging the work-relatedness of the disability and the exact nature of the injury.

This is an extremely important case since many claimants' attorneys have been filing Penalty Petitions whenever a TNCP is rescinded with a Box 4 denial. This case will be very helpful in defending these petitions if employers take the steps outlined by the court.

In the decision, the court also discussed the use of Box 6 on the Denial and warned employers and insurers about inserting language, such as "The claimant has returned to work," in order to rescind a TNCP. If such a Box 6 Denial is issued in a TNCP setting, a penalty and unreasonable contest will be found. Thus, employers and their insurers should refrain from listing reasons in Box 6 on the Denial that would cause penalties and an unreasonable contest to be awarded. Instead, the Box 4 denial should be used. Please make sure that your attorney argues that the nature of the injury and the extent of disability are being challenged so as to avoid penalties and unreasonable contest.