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What's Hot in Workers' Comp

TOP 10 DEVELOPMENTS IN NEW JERSEY WORKERS’ COMPENSATION IN 2021

What’s Hot in Workers’ Compensation, Vol. 24, No. 12, December 2021

December 1, 2021

by Kiara K. Hartwell

1.    The Appellate Division affirmed a Judge of Compensation’s decision to include the petitioner’s portion of attorneys’ fees and costs in the employer’s Section 40 lien.
Panckeri v. Allentown Police Dep’t, Docket No. A-2015-19 (Appellate Division, Decided Mar. 2, 2021)

In this per curiam decision, the Appellate Division enforced a statutory lien, agreeing with the Judge of Compensation that the petitioner’s share of costs and fees should be included as a part of the subrogation calculation. In affirming the judge’s decision, the Appellate Division heavily relied on the judge’s reasons and only added that the petitioner’s reliance on Kuhnel v. CNA Insurance Cos., 322 N.J. Super. 568 (App. Div. 1999) was misplaced, as the petitioner’s share of fees and costs was not addressed Kuhnel was decided eight years prior to the 2007 amendment of Section 40, in which there was no mention of a petitioner’s portion of fees and costs.

2.    The New Jersey Supreme Court addressed medical marijuana in workers’ compensation cases.
Hager v. M&K Constr., 246 N.J., 1247 A.3d 864 (2021)

The New Jersey Supreme Court affirmed both the workers’ compensation court’s order and the Appellate Division’s to order a respondent to reimburse a petitioner’s medical marijuana costs. First, the Supreme Court found the employer did not qualify as “a government medical assistance program or private health insurer” under the Compassionate Use Act and N.J.S.A. 24:6I-14 and that medical marijuana was a reasonable and necessary treatment. Finally, the Supreme Court noted the employer was not aiding and abetting the petitioner’s possession of marijuana by reimbursing medical marijuana costs.

3.    The Appellate Division affirmed dismissal of a workers’ compensation case based on the premises rule.
Pilone v. Cnty. of Middlesex, Docket No. A-1676-19, (Appellate Division, Decided Mar. 15, 2021)

The Appellate Division agreed with the judge’s decision that the petitioner’s injury was not compensable as it did not arise out of and in the course of employment. In reiterating that the premises rule limits an employer’s liability to locations that the employer controls, such as by ownership, maintenance or exclusive use, the Appellate Division noted the respondent had no control over the sidewalk where the petitioner fell. In addition, the Appellate Division pointed out the petitioner failed to prove the respondent directed her to have her meeting in the donut shop. 

4.    The Appellate Division affirmed a judge’s finding of causal relationship between the work accident and need for treatment after weighing expert opinions.
Soto v. Exclusive Coachworks, Inc., Docket No. A-2331-19, (Appellate Division, Decided Apr. 12, 2021)

In affirming a judge’s order to provide benefits, the Appellate Division noted the judge, as the trier of fact, was in the best position to weigh the credibility of experts and the decision was well-supported by the record. In this case, both experts agreed the petitioner needed a total knee replacement; that as a result of the 2017 incident, he required arthroscopic surgery, at a minimum; and his underlying arthritis was exacerbated by the 2017 incident. 

5.    The Appellate Division affirmed a workers’ compensation judge’s decision to dismiss as the injury was not in the course of employment.
Regalado v. F&B Garage Door, Docket No. A-0083-20 (Appellate Division, Decided Jun. 8, 2021)

The Appellate Division affirmed a Workers’ Compensation Judge’s decision to dismiss a petitioner’s claim as a result of a car accident after an employer’s annual holiday party. The Appellate Division reviewed Lozano v. Frank DeLuca Constr., 178 N.J. 513 (2004), noting that an employee’s subjective impression of compulsion alone was insufficient. Rather, other factors needed to be taken into account, such as the employer’s solicitation of employee participation, when/where/whom the event takes place, and whether refusal could negatively impact the employee’s employment. 

6.    The Appellate Division affirmed a workers’ compensation court order to deny additional medical and temporary benefits to a petitioner.
Constanzo v. Meridian Rehab, Docket No. A-5547-18 (Appellate Division, Decided Jun. 17, 2021)

The Appellate Division agreed with the judge, who heard testimony and found the petitioner failed to establish a causal relationship between the original injury and current left knee condition. There was ample evidence to support that the current left knee condition was not related to the April 2016 incident and the judge did not err in giving greater weight to Dr. Sieler’s testimony, as judges are in the best position to assess credibility, and giving more weight to one expert’s opinion is not a basis to reverse a judgment.

7.    The Appellate Division affirmed the workers’ compensation court decisions, noting petitioners were not entitled to redetermination of benefits.
Published Consolidated Appeals (Appellate Division, Decided Jun. 21, 2021): Wilhelm v. Ryder Logistics & Transp. Sols. & Second Injury Fund, Docket No. A-3770-18; Bozarth, Sr. v Burlington Cnty. & Second Injury Fund, Docket No. A-3792-18; Schiazza v. Western Oilfield Supply & Second Injury Fund, No. A-3797-18; and Pierce, Jr. v. CBF Trucking & Second Injury Fund, Docket No. A-3798-18

The Appellate Division agreed with the Judge of Compensation that N.J.S.A. 34:15-95.5 did not compel a triennial redetermination of Average Current Earnings (ACE) nor was it mentioned. As an issue of first impression, the Appellate Division noted that New Jersey was a reverse offset state, in which the workers’ compensation award was reduced rather than Social Security Disability. In addition, the Appellate Division noted the plain language does not include same and there was no mention in the legislative history. It was also indicated that 42 U.S.C. § 424a(d) created an exception for reverse offset states. As such, the Appellate Division found the triennial redetermination of Average Current Earnings (ACE) was not applicable in New Jersey as a reverse offset state.

8.    The Appellate Division affirmed grant of summary judgment for plaintiffs’ failure to establish intentional wrong.
Estate of Portillo v. Bednar Landscaping Serv., Inc., et al. and Estate of Zelaya v. Bednar Landscaping Serv., Inc., et al., Docket No. A-3110-19 (Appellate Division, Decided Jul. 8, 2021)

In affirming the Law Division’s grant of summary judgment, the Appellate Division found the plaintiffs were collecting workers’ compensation benefits and the defendants did not commit an “intentional wrong.” After reviewing relevant case law, the Appellate Division found that, unlike some of the prior cases, the defendants here had no prior OSHA citations and were not aware of OSHA’s safety regulations for trenches. In addition, the plaintiffs could not show the defendants had knowledge regarding the unsafe trench practice and substantial certainty of the collapse. Judge Sabatino joined in the majority’s decision to affirm summary judgment, but added in his concurring opinion his thoughts on the troubling inconsistency between the defendants’ lack of knowledge assertions in the civil case and Bednar Landscape’s plea of guilty to a criminal accusation of violating a known legal duty to take precautionary safety measures. 

9.    The Appellate Court affirmed dismissal of claim for petitioner’s failure to demonstrate injury was in course and scope of employment.
Mackoff v. New Brunswick Saw Serv., Docket No. A-3625-19 (Appellate Division, Decided Jul. 14, 2021)

The Appellate Division agreed with the judge in denying the petitioner’s motion and dismissing the claim. In doing so, the Appellate Division reviewed Jumpp v. City of Ventnor, 177 N.J. 470 (2003), in which the Supreme Court found that compensability for employees who work away from the office should be based on whether the employee was performing job duties at time of the injury. Because the petitioner admitted that the Inn was two hours out of his way, rather than going directly to his office from the meeting location; the Inn was never a customer; and he had no other appointments with customers, the Appellate Division declined to disturb the judge’s findings. 

10.    The Appellate Court reversed dismissal of workers’ compensation claim under premises rule.
Walker v. Saker ShopRite, Docket No. A-2770-19 (Appellate Division, Decided Sep. 7, 2021)

The Appellate Division reversed the Workers’ Compensation Judge’s dismissal of a claim based on the conclusion that the accident did not take place in the course of the petitioner’s employment. In revising the premises rule, the Appellate Division found the petitioner’s incident occurred in an area controlled by Saker. The Appellate Division further explained that “it is well-established in workers’ compensation jurisprudence that when compensability of an accident depends on control of the employer, that test is satisfied if the employer has the right of control; it is not necessary to establish that the employer actually exercised that right.” 

 

What’s Hot in Workers’ Comp is prepared by Marshall Dennehey Warner Coleman & Goggin 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 © 2021 Marshall Dennehey Warner Coleman & Goggin, 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.

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Thought Leadership

Two Tracks, No Preclusion: Ohio Supreme Court Preserves Separate Damages Claims After Chapter 2506 Appeals

The Supreme Court of Ohio has clarified that an administrative appeal under Ohio Revised Code Chapter 2506 does not bar a separate action for damages and declaratory relief that could not have been pursued in the administrative appeal. The Ohio Supreme Court considered Sheetz, Inc. v. Centerville (2026-Ohio-3531) as a result of a certified question from the Southern District of Ohio. The question was whether Sheetz, the gas station/convenience store brand, was barred from seeking damages in a separate action since damages were not sought in their administrative appeal. Ultimately, the Ohio Supreme Court ruled that res judicata does not bar a separate action for damages after ruling on an administrative appeal because R.C. Chapter 2506 is limited to judicial review and cannot grant affirmative relief. The case arose after Centerville’s city council rejected a site plan proposed by Sheetz, Inc. that had received unanimous approval from the City’s planning commission. Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. Ch. 2506 appeal, therefore res judicata could not be triggered to apply to the § 1983 action. Additionally, Sheetz moved to certify the issue to the Ohio Supreme Court, citing differing results between the second and sixth districts on this same issue. Centerville approached the question, not from a claim preclusion standpoint, but from the holding in Grava v. Parkman, Twp which states that a final judgment rendered on the merits bars all subsequent action based on the same transaction or occurrence.  In yet another approach, an objector argued that claim preclusion was satisfied because Sheetz could have raised its damages claims in the administrative appeal – Sheetz disagrees. In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. The remaining question for practitioners looking to apply or defend against this exception is when does the statute of limitations begin to run on damages and declaratory relief claims related to an administrative decision on appeal? A takings action in federal court has a 2-year statute of limitations, or as a state claim, 4 years (like the other tortious claims raised therein). Correlating this case with others, an administrative appeal will not likely toll the statute of limitations on claims based on a final decision by a municipal authority. Therefore, practitioners should look for these cases to be brought simultaneously.

Thought Leadership

Pennsylvania Supreme Court to Review Whether Legal Malpractice Claims May Be Recast as Breach of Contract Claims

The Pennsylvania Supreme Court recently granted allowance of appeal to consider whether a plaintiff may pursue a breach of contract claim against an attorney based on allegations that the attorney failed to provide competent legal services. The issue is significant in professional liability litigation because it concerns whether a plaintiff may avoid the statute of limitations applicable to professional negligence claims by characterizing the alleged misconduct as a breach of contract. Antoine Poteat retained attorneys Gary Asteak and Nino V. Tinari to represent him in a criminal matter. After his conviction was subsequently overturned through a Post Conviction Relief Act proceeding, Poteat filed suit against his former attorneys alleging that they breached their retainer agreements by failing to provide competent legal services. The attorneys argued that the claims sounded in professional negligence, rather than breach of contract, and were therefore time-barred. The trial court dismissed Poteat’s complaint, but the Superior Court, sitting en banc, reversed. The Superior Court held that the gist-of-the-action doctrine did not bar Poteat’s breach of contract claim because the alleged failure to provide competent legal services could constitute a breach of the parties’ agreement. The Court further held that a legal-services agreement contains an implied duty requiring an attorney to provide competent legal services, even where the agreement does not contain an express provision requiring such services. The Pennsylvania Supreme Court granted review in July 2026 and will consider whether the Superior Court’s decision conflicts with Pennsylvania precedent distinguishing contract and tort claims, including Bruno v. Erie Insurance Co. The Supreme Court will also address whether a plaintiff may maintain a breach of contract claim based on an implied duty to provide competent legal services without identifying a specific contractual provision that was breached. The Supreme Court’s decision could have significant implications for professional liability litigation in Pennsylvania, particularly where plaintiffs seek to characterize claims arising from alleged professional negligence as contractual claims.

Thought Leadership

The Search-Incident-to-Arrest Doctrine Does Not License Strip Searches

In Beatty v. Gardner, No. 25-2860 (3d Cir. Sept. 16, 2026), Kyle Beatty sued police officers Clinton Gardner and Calvin Irvin under 42 U.S.C. § 1983 after they stopped, arrested, and searched him three times during a drug investigation in Williamsport, Pennsylvania. The officers initially smelled marijuana coming from the car in which Beatty was sitting and observed marijuana residue, giving them probable cause to arrest him. Beatty consented to the first pat-down, and the second search was conducted incident to his lawful arrest; neither search uncovered weapons or contraband. The officers then transported Beatty to the police station solely to strip-search him, but the strip search also revealed nothing. The District Court granted the officers summary judgment, concluding that the initial stop, arrest, and first two searches were reasonable and that qualified immunity protected the officers from liability for the strip search. The Third Circuit affirmed, but held that the strip search itself violated the Fourth Amendment. The court concluded that the search-incident-to-arrest doctrine does not automatically permit officers to strip-search an arrestee outside the jail or prison setting. Because strip searches are highly intrusive and the traditional justifications for searches incident to arrest (officer safety and preservation of evidence) did not justify the search of Beatty, the officers generally needed either the arrestee’s consent, exigent circumstances, or a warrant supported by probable cause to believe that a search beneath the clothing would reveal weapons, contraband, or evidence. Here, the officers had none of those justifications. Nevertheless, the court held that qualified immunity barred damages liability because, at the time of the search, the right against a warrantless strip search of an arrestee outside the institutional setting was not clearly established by Supreme Court or Third Circuit precedent. The court likewise upheld qualified immunity on Beatty’s First Amendment retaliation claim and affirmed summary judgment for the officers.