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What's Hot in Workers' Comp

The New Jersey Supreme Court affirms the Appellate Division’s decision to reverse the trial court and reinstate the jury verdict in the plaintiff’s favor.

Pantano v. N.Y. Shipping Assoc., et. al, No. A-19-22 (June 5, 2023)

June 1, 2023

by Kiara K. Hartwell

In this case, the New Jersey Supreme Court affirmed the Appellate Division’s decision to reverse the trial judge’s decision to vacate the jury verdict and award judgment to Marine Transport, Inc. In doing so, the court considered the application of the multi-factor test in Galvao v. G.R. Robert Construction Co., 179 N.J. 462, 471-73 (2004), to determine if a worker who negligently caused a plaintiff’s work injury is a “borrowed employee” of the plaintiff’s employer. This decision was authored by Judge Sabatino and joined by Chief Justice Rabner and Justices Patterson, Solomon, Pierre-Louis and Wainer Apter. Justice Fasciale did not participate.

The plaintiff was a mechanic for Container Services of New Jersey when he was injured in November 2013. Lawrence Giamella attempted to help the plaintiff move equipment with a forklift and, in doing so, crushed the plaintiff’s foot. The plaintiff collected workers’ compensation benefits from Container Services, but he also filed a personal injury action against numerous defendants, including Marine Transport. The crux of the issue was who employed Giamella at the time of the incident.

Summary judgment was granted for Container Services due to the statutory bar under N.J.S.A. 34:15-8. Marine Transport moved for summary judgment, arguing it was not Giamella’s employer and, though he was on Marine Transport’s payroll, he was a “borrowed employee,” working for Container Services at the time of the incident. This motion was denied. The trial judge also did not rule on Marine Transport’s motion for judgment pursuant to Rule 4:40-1, reserving it for after the jury verdict. Ultimately, the jury awarded damages for the plaintiff. There was an agreement between counsel, so the jury was asked not to resolve the “borrowed employee” question. Rather, counsel agreed that the court would resolve this argument; if the court found in Marine Transport’s favor on the Rule 4:40-1 motion, then Marine Transport would not be liable, and if it did not, then Marine Transport would be liable under the parties’ agreement.

The trial judge ruled in Marine Transport’s favor on the motion, finding Giamella was a “borrowed employee,” and vacated the verdict. The Appellate Division reversed, vacated the directed verdict and reinstated the jury verdict in the plaintiff’s favor. The Supreme Court granted Marine Transport’s petition for certification, limited to whether the court or the jury should determine the “borrowed employee” issue.

The court found that the multi-factor test from Galvao was presumptively for a jury to determine and the court should not get involved unless the evidence was so one-sided. The Galvao test was discussed, with the court noting “control” was the initial question and the three methods to demonstrate same were: (1) the “method of payment”; (2) who “furnishes the equipment”; or (3) the “right of termination.” If control was found, the analysis would move on to the “business-furtherance prong,” or whether a worker was furthering the employer’s business. This could be determined by if the work being done was within the general contemplation of the employer and the employer derived an economic benefit by loaning its employee. 

The court then applied these principles to this instant case. In viewing the trial record in the light most favorable to the plaintiff as the non-moving party, the court found the evidence was not one-sided. As such, the court held the trial judge erred in granting Marine Transport’s motion. While this would generally mean the case would be remanded for a jury to resolve the “borrowed employee” issue, due to the parties’ agreement, as the Rule 4:40-1 motion was denied, the court affirmed the Appellate Division’s decision to reinstate the jury verdict.

 

 

What’s Hot in Workers’ Comp, Vol. 27, No. 6, June 2023, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2023 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

Featured Conversations... Key Takeaways from A.M. Best’s Webinar on the Misuse Defense in Product Liability Claims, Featuring Michael Salvati

Michael Salvati, shareholder in our Philadelphia office, was a panelist for the April A.M. Best webinar, “The Misuse Defense: Strategic Approaches to Defending Product Liability Claims for Insurers.” During the program, Michael and his fellow panelists offered practical, jurisdiction‑specific guidance on how misuse and failure‑to‑warn theories intersect in modern product liability litigation. Michael emphasized the unique challenges these claims present—particularly in states like Pennsylvania, where evidentiary rules diverge sharply from those applied in many other jurisdictions. Failure to Warn as the “Flip Side” of Misuse Salvati explained that failure‑to‑warn allegations often arise as a direct counter to a misuse defense. As he noted, “If our misuse defense is that the plaintiff didn't use a product properly or safely, then the failure to warn claim is that we didn't tell them how to use it properly.” He emphasized that these claims can stem from either the absence of warnings or criticisms of existing warnings, such as insufficient specificity or lack of clarity about risks. Pennsylvania’s Unique Evidentiary Landscape One of Salvati’s most notable points was the stark difference in how Pennsylvania treats evidence of compliance with industry standards. He highlighted that Pennsylvania is “one of the only states…where that evidence is not admissible” in strict liability cases. Manufacturers cannot rely on compliance with ANSI, UL, ISO, or even federal safety standards to defend the product against a strict liability claim—because the focus is solely on the product itself, not the manufacturer’s conduct. Salvati acknowledged the challenge this creates for defense counsel and clients who expect such compliance to carry weight. Understanding the Three Defect Theories Salvati also walked through the three primary defect theories recognized in many jurisdictions: - Design defect – a flaw in the product’s intended design - Manufacturing defect – a deviation affecting a specific unit - Failure to warn – inadequate instructions or warnings He noted that warnings claims are increasingly significant and sometimes stand alone when design or manufacturing theories are weak. As he put it, plaintiffs often default to warnings claims because “the default position seems to be, ‘If I got hurt, there must be something wrong.’” Warranties and State‑by‑State Variations Salvati addressed how breach‑of‑warranty claims fit into the broader framework, explaining that implied warranties—such as merchantability—often overlap with strict liability in Pennsylvania. He emphasized the importance of understanding local nuances, as warranty law and admissibility rules vary widely across states. Looking Ahead: The Growing Importance of Warnings In his closing remarks, Salvati stressed that warnings should never be treated as an afterthought in product liability defense. He observed that warnings‑only claims are becoming more common and urged manufacturers and insurers to continually evaluate the clarity and completeness of their instructions and warnings. His takeaway: “We should always be talking about what are the instructions that come with our products…to bolster a misuse defense.” Listen to the complete webinar here: https://www3.ambest.com/conferences/events/eventregister.aspx?event_id=WEB1074.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

Thought Leadership

Legal Update for Special Education Law: Recent Positive Outcomes From the Group

Hearing Officer Confirms District Acted Appropriately Under IDEA and Section 504 William J. McPartland (Scranton) obtained a finding in favor of our client, a school district, on all issues following a due process hearing. The parent had filed a due process complaint alleging that the school district had breached its child find duty under the IDEA and Section 504, that the school district had discriminated against the student on the basis of disability in violation of Section 504, and that the school district had denied a free and appropriate public education to the student both by developing inadequate IEPs and via an actionable procedural violation.  Specifically, the student had received a Section 504 evaluation in October 2023, after a number of behavioral infractions culminating in a fight in September 2023, was identified as having anxiety and a sleep disorder, and received appropriate Section 504 accommodations. The student had never previously demonstrated signs of a learning disability, and the parent denied the school district permission to evaluate the student for special education needs in November 2023, and January 2024. The parent granted the district permission to evaluate the student in October 2024, after a private psychologist diagnosed the student with Attention Deficit Hyperactivity Disorder, possible Oppositional Defiance Disorder, a learning disorder, and anxiety. The school district issued a special education evaluation report in December 2024, finding that the student had an emotional disturbance and other health impairment, and an IEP providing an itinerant level of emotional support, as well as instruction in academics and social skills, was issued in January 2025, and amended in February, March, and April 2025. The student withdrew from the school district in April 2025, to attend a cyber charter school. The hearing officer determined that the school district had not violated its child find duty to the student in violation of either the IDEA or Section 504 where the district developed a Section 504 plan for the student within a month and a half of the parent’s first request for a Section 504 evaluation and where the parent repeatedly denied consent to conduct an IDEA evaluation of the student. The hearing officer noted that the student’s sporadic record of behavioral infractions prior to September 2023, did not suggest that the student had a disability prior to the parent’s initial request for an evaluation. The hearing officer further determined that no evidence had been produced to suggest that the student was discriminated against on the basis of disability in violation of Section 504. Additionally, the hearing officer determined that the IEP offered to the student was substantively adequate and that, to the extent the social and emotional programming offered by the school district was not received by the student, this resulted from the parent’s refusal to accept the same. The hearing officer finally determined that the school district did not commit an actionable procedural violation by delaying development of an IEP for the student where the parent repeatedly denied consent to evaluate the student. Court Dismisses Three of Four Claims Against School District Christopher J. Conrad and Daniel P. McGannon (Harrisburg) achieved a significant early victory on behalf of a school district client in. The team successfully obtained dismissal of three of the four claims asserted in the plaintiff’s amended complaint. The former district superintendent brought multiple claims arising out of his alleged “forced resignation,” including age discrimination under the ADEA, a Section 1983 Equal Protection claim, a Pennsylvania Whistleblower claim, and breach of contract. On behalf of the district, the defense team moved to dismiss the complaint in part, arguing: The plaintiff failed to plead sufficient facts to support a prima facie case of age discrimination. The equal protection claim was barred because the ADEA provides the exclusive federal remedy for age-based employment claims. The breach of contract claim could not stand because the underlying employment agreement had expired prior to the alleged breach. The court agreed, dismissing the ADEA, equal protection, and breach of contract claims in their entirety. As a result, only a single claim under the Pennsylvania Whistleblower Law remains pending. This outcome substantially narrows the scope of the litigation and positions the client for a more efficient defense moving forward.