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What's Hot in Workers' Comp

TOP 10 DEVELOPMENTS IN NEW JERSEY WORKERS’ COMPENSATION IN 2023

What’s Hot in Workers’ Comp, Vol. 27, No. 12, December 2023

December 1, 2023

by Kiara K. Hartwell

1.    The Appellate Division addresses the abuse of workers’ compensation judges’ discretion in awarding fees, costs and penalties.
Garzon v. Morris Cnty. Golf Club, No. A-1100-21 (App. Div. Dec. 23, 2022)

The Appellate Division addressed three cases regarding a judge’s abuse of discretion in 2022, including Garzon. In Garzon, the Appellate Division appeared to be so appalled by the abuse of discretion and the lack of any analysis in support of the fees, costs and penalties that it directed the case to be sent to a different workers’ compensation judge on remand. The Division’s decision pointed out that having the discretion to award fees up to a 20%, whether it be on medical and temporary benefits or permanency benefits, that authority “is not unbridled” and “cautioned against a reflexive application of a twenty percent award without a full analysis.” The Appellate Division conceded that “the amount of the award is a factor to be considered,” and it went on to explain that it has “limited significance in comparison to the more important factors including the nature and extent of the services and the responsibility involved.”

2.    The New Jersey Supreme Court finds insurance broker has duty to provide notice to LLC members of workers’ compensation coverage options.
Holm v. Purdy, 268 A.3d 1017 (2022)

The New Jersey Supreme Court found that an insurance broker has a non-waivable duty to an LLC to provide notice that workers’ compensation coverage is available to members of the LLC who can actively perform services on behalf of the LLC, but only if the coverage is elected when the policy is purchased or renewed. A member of the LLC died as a result of a work-related incident, and his widow filed a dependency claim in the workers’ compensation court. However, it was denied by the carrier, who argued the LLC had not elected coverage for its members. The widow then filed a civil suit against the insurance broker, alleging they were unaware they were not covered by workers’ compensation insurance and that, had they been aware, they would have elected to be covered. The Trial Court found the broker did not have a duty to inform the LLC members regarding their right to elect coverage. The Appellate Division reversed, and the Supreme Court upheld that decision.

3.    The Appellate Division affirms denial of motion for medical and/or temporary disability benefits based upon petitioner’s credibility issues and failure to establish objective evidence.
Richard Farhat v. Joe Leone’s, No. A-1311-21 (App. Div. Mar. 9, 2023)

The petitioner sustained a slip and fall while working for the respondent in December 2017. While the incident was reported, there was no injury identified. The petitioner treated three months later for his neck. He filed a Claim Petition and a Motion for Medical and/or Temporary Disability Benefits, requesting treatment to the low back based upon his expert’s recommendation. Testimony was taken, and the judge denied the Motion for Medical and/or Temporary Disability Benefits, noting that the petitioner recounted different versions of the accident throughout the medical records. The court further pointed to the credibility issues of not only the petitioner but also his expert. The Appellate Court affirmed the denial of the motion, indicating there were no errors in the findings of the workers’ compensation judge. 

4.    Bill S3095 was introduced in the Senate.

Bill S3905 concerns reduction of statute of limitations from six years to two years in medical fee disputes in workers’ compensation matters. On June 1, 2023, it was introduced in the Senate and referred to the Senate Labor Committee. Currently, case law indicates these types of claims are governed by the general six-year statute of limitations.

5.    The New Jersey Supreme Court affirmed the Appellate Division decision to reverse the trial court and reinstate the jury verdict in plaintiff’s favor.
Pantano v. N.Y. Shipping Assoc., et. al, No. A-19-22 (June 5, 2023)

The 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. The court then applied these principles to this case. In viewing the trial record in the light most favorable to the plaintiff as the non-moving party, the court found 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. 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. 

6.    On July 20, 2023, the Governor signed Bill A4832/S3309 into law, raising the maximum workers' compensation fees for evaluating physicians.

Bill A4832 was introduced on October 27, 2022, and referred to the Assembly Labor Committee. On February 13, 2023, it was report out of the Assembly Committee with Amendments for a second reading. S3309 was introduced on November 3, 2022, in the Senate and referred to the Senate Labor Committee. On February 9, 2023, it was report from the Senate Committee for a second reading. On March 20, 2023, it passed by the Senate (25-11) and was received in the Assembly.

This law raises the maximum workers’ compensation fees for evaluating physicians and expands circumstances for which physician legal fees are permitted. N.J.S.A 34:15-64 was amended the statutory language permits application effective immediately. The maximum fee was increased from $600 to $1,000 for expert reports. It also allows a psychologist, nurse practitioner, or licensed clinical social worker to be paid a fee for a report or testimony concerning course of treatment.

7.    The Appellate Division affirms interlocutory workers’ compensation order denying proposed section 20 settlement.
Gonzalez v. N.J. Transit Corp., No. A-1408-22 (Aug. 21, 2023)

The Appellate Division affirmed the interlocutory workers’ compensation order denying a proposed N.J.S.A 34:15-20 settlement. When the judge was presented with a proposed Section 20 settlement, before approving, the petitioner’s testimony was requested. In addition, the judge pointed out the defense permanency expert had provided permanency ratings on both the neck and back. The respondent appealed, which the Appellate Division granted, as well as amicus participation by the New Jersey Department of Labor and Workforce, Division of Workers’ Compensation. The Appellate Division noted the judge properly exercised her discretion to approve a Section 20 settlement based solely on an affidavit or to request testimony.

8.    The Appellate Division affirms workers’ compensation order denying petitioner’s motion for benefits.
Sykes v. George Harms Constr. Co. Inc., No. A-3320-20 (Sep. 28, 2023)

The Appellate Division affirmed the workers’ compensation judge order denying a petitioner’s Application for Medical and Temporary Benefits. The petitioner was working for the respondent when he suffered a work injury on April 30, 2019. After taking testimony, based on the fact that the petitioner lost consciousness and all witnesses testified that he was in a normal position in the seat, the judge found there was no evidence that his head hit any part of the cab. Rather, the judge found no evidence that the petitioner suffered the impact to his body and head and, rather, the evidence controverted it. He concluded the petitioner did not carry his burden of proof. The petitioner appealed. In applying the deferential standard of review to findings of fact, the Appellate Division affirmed for reasons expressed by the workers’ compensation judge, finding no reason to disturb the judge’s findings and decision.

9.    The Appellate Division affirms workers’ compensation orders, denying insurance carrier’s motion to dismiss for lack of coverage and finding petitioner was in course and scope of employment.
Pozadas v. Capital Iron Assocs., LLC and Hartford Underwriters Ins. Co., No. A-0162-22 (Oct. 30, 2023)

The Appellate Division affirmed two workers’ compensation orders. The petitioner was the owner and employee of the respondent, a structural steel company. An insurance policy, including workers’ compensation coverage for the petitioner, was obtained from Hartford, covering October 13, 2015, to October 13, 2016. The day after the policy expired, the petitioner was involved in a car accident while taking a longer route to enjoy the weather. He filed a workers’ compensation claim. Hartford filed an answer, denying coverage. Hartford was unable to produce any specific witnesses about the nonrenewal. As such, the judge denied Hartford’s original motion to dismiss with prejudice, holding coverage to be in effect, and rejected Hartford’s attempt to withdraw the coverage motion. Subsequently, another judge found the petitioner was in the course of his employment. Hartford appealed, but the Appellate Division declined to consider the due process argument as it was not raised below and rejected Hartford’s argument about course and scope of employment, noting the record supported the judge’s findings.

10.    The Appellate Division affirms summary judgment against employer due to the exclusive remedy provision of the Workers’ Compensation Act and summary judgment, in part, to an insurance carrier in excluding coverage for intentional wrong claims.
Cannon v. Bravo Pack, Inc. and Kraft Machines Inc. v. Employers Preferred Ins., No. A-1702-21 (Oct. 31, 2023) and Cannon v. Bravo Pack, Inc. and Bravo Pack, Inc. v. Employers Preferred Ins., No. A-1731-21 (Oct. 31, 2023)

In the first Cannon case, the Appellate Division affirmed an order granting summary judgment to the employer and dismissing all claims, cross claims and third party claims. The plaintiff sustained a left-hand injury the first day at work when attempting to remove a jam in a machine. He filed suit against his employer, who moved for summary judgment, arguing the exclusive remedy provision of the Workers’ Compensation Act barred the plaintiff’s claims. The judge determined the plaintiff did not have evidence to support a finding of substantial certainty of injury nor that this accident would fall into the narrow exception for injuries caused by an employer’s intentional wrong. The plaintiff appealed, but the Appellate Division found the employer’s conduct did not rise to the standard of an intentional wrong or substantial certainty of an injury.

In the second Cannon case, the Appellate Division affirmed the portion of an August 12, 2021, order granting partial summary judgment to the carrier as the insurance policy was clear in excluding coverage for intentional wrong claims. The relevant portion of the insurance policy was quoted, noting there was a specific exclusion for intentional wrongs. The trial court found the carrier did not have to provide coverage for the intentional wrong claims, but did have to for the negligence, gross negligence or reckless conduct claims. The employer appealed, arguing the exclusion was ambiguous and, even if it was not, it ran contrary to the public policy of the Workers’ Compensation Act. The Appellate Division rejected these arguments, noting the exclusion was clear and that the Workers’ Compensation Act was not inconsistent with an employer’s liability policy that excluded coverage for intentional wrongs.


 

What’s Hot in Workers’ Comp, Vol. 27, No. 12, December 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

Delaware Superior Court Clarifies Pleading Standard for Legal Malpractice Claims

In the matter of Edelstein v. Kirschner, No. N25C-09-018 FJJ, 2026 Del. Super. LEXIS 45, at *1 (Super. Ct. Jan. 29, 2026), the plaintiff law firm sued its former client for unpaid legal fees in the amount of $4,399.35. The former client asserted a counterclaim alleging legal malpractice. More, specifically, the former client claimed that his lawyer committed malpractice be recommending that he settle an underlying lawsuit by entering into a stipulated judgment for an excessive amount with interest that was accruing at “an outlandish” interest rate. The law firm moved to dismiss the counterclaim on the basis that its former client had not alleged facts reflecting that he could prove the case within the case. That is, facts reflecting that his attorneys caused him to lose the underlying case. The Superior Court held that while a legal malpractice plaintiff in cases arising from underlying litigation must prove the case within the case to survive a summary judgment motion, he does not need to plead facts reflecting as much in order to survive a motion to dismiss. While this case addresses the pleading requirements of a legal malpractice case in Delaware, it also serves as reminder that chasing unpaid legal fees from a former client can often give rise to a legal malpractice counterclaim. Attorneys seeking to collect unpaid legal fees should ensure that the fees they seek are for a significant amount, which would be recoverable if a judgment is obtained. Otherwise, the effort could backfire.

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

Pennsylvania Supreme Court Takes Up the Gist of the Action Doctrine

The gist of the action doctrine has been a hot topic in legal malpractice cases in Pennsylvania over the last several years.  Beginning in 2014, the Pennsylvania courts applied the gist of the action doctrine to professional liability actions, following the Pennsylvania Supreme Court’s opinion in Bruno v. Erie Ins. Co., 106 A.3d 48 (Pa. 2014).  In Bruno, the court applied the gist of the action doctrine to a professional negligence claim, and found that a negligence claim was not barred simply because the parties were in a contractual relationship where the gist of the claim sounded in negligence. Thereafter, courts in Pennsylvania applied the gist of the action doctrine to breach of contract claims as well, finding that where the allegations sounded in negligence, a plaintiff could not recast a negligence claim as one for breach of contract. This was important because of the distinction between statutes of limitations: negligence claims must be brought within two (2) years, while breach of contract claims can be brought within four (4) years.  Then, last year, the Pennsylvania Superior Court held that the gist of the action doctrine does not apply to breach of contract claims as seen through two opinions. These opinions were Swatt v. Nottingham Village, 342 A.3d 23 (Pa. Super. 2025) and Poteat v. Asteak, et al., 350 A.3d 198 (Pa. Super. 2025). That is, the gist of the action doctrine can bar a negligence claim but it cannot bar a breach of contract claim.  This month, the Pennsylvania Supreme Court granted the petition for allowance of appeal in Poteat.  The Supreme Court phrased the issue for consideration as follows: Whether the Superior Court majority’s holding conflicts with this Court’s holding in Bruno v. Erie Insurance Co., 160 A.3d 48 (Pa. 2014), as well as Superior Court opinions that applied Bruno, and departs from almost 200 years of controlling precedent that distinguishes between causes of action in contract and tort based upon the nature of the duty that was allegedly breached? Attorneys on both sides of legal malpractice matters no doubt look forward to clarification on these issues from our Supreme Court.

Thought Leadership

Appellate Division Affirms Dismissal of Legal Malpractice Counterclaim Against Martin Law Firm

In Martin v. Loury, 2026 N.J. Super. Unpub. LEXIS 1617 (App. Div. July 15, 2026), Martin Law Firm represented Kirk Loury in an employment matter Mr. Loury filed against his former employer, Concord Equity Group Advisors LLC (“Concord”). The allegations included, among other things, that Loury was not fairly compensated for his employment with Concord. After a bench trial finding in Loury’s favor, the Appellate Division remanded this matter in February 2016 for a second trial. During the second trial, Concord CEO, Lee Argush, testified to lower compensation estimate than first trial. On remand, the second trial judge awarded Mr. Loury the same damages as the first judge, finding Mr. Argush not credible. After the findings during the second trial, Martin Law Firm filed an action against Mr. Loury to recover legal fees and costs of representing Mr. Loury in a second bench trial and Mr. Loury filed a counterclaim against Martin Law Firm for legal malpractice, alleging he should have received an even higher award in the second bench trial. In this allegation, Mr. Loury, through his expert, claimed that Martin Law Firm should have recalled Mr. Loury to the stand to rebut Mr. Argush’s testimony to allege an alternative theory of damages. Mr. Loury’s expert admitted that the second judge already rejected Mr. Argush's theory and accepted Loury's damages theory. The trial court barred Mr. Loury’s expert and dismissed Loury's counterclaim with prejudice before convening the collection trial, and the jury ruled in Martin Law Firm’s favor. Mr. Loury appealed the trial court's pretrial rulings barring his liability expert from testifying in support of his legal malpractice counterclaim, denying his motion for summary judgment on that counterclaim, and denying his motion to amend his counterclaim by adding attorney Joseph A. Martin as a codefendant. In affirming the trial court’s decision, the Appellate Division held that the trial court properly excluded Loury’s expert testimony in the counterclaim against Martin Law Firm because the expert could not explain how calling Loury as a rebuttal witness would have increased damages when the second judge already rejected Mr. Argush's testimony and accepted Loury's damages theory, making the expert’s causation opinion speculative. The Appellate Division also held that the trial court properly denied Mr. Loury's summary judgment motion on his malpractice counterclaim because reasonable minds could differ on whether Mr. Martin's alleged failures would have changed the second judge's damages award, given the judge already found Mr. Argush not credible, creating genuine factual disputes precluding summary judgment. Also, the Appellate Division held that the trial court properly denied Loury's May 2023 motion to add Joseph Martin individually because the statute of limitations expired in February 2022, six years after the 2016 appellate remand when Mr. Loury incurred new legal costs, and relation back did not apply because Mr. Loury knew Mr. Martin's identity throughout and strategically chose to sue only Martin Law Firm in his 2019 counterclaim.