Workers' Compensation Defense

1.    On January 10, 2022, Governor Phil Murphy signed S771, amending the Statute and expanding the reach of N.J.S.A. 34:15-36 and compensability in parking lot cases.

Section 36 of the New Jersey Workers’ Compensation Act addresses the “premises rule,” a basic principle that employment begins when an employee arrives on premises owned or controlled by the employer and ends when the employee leaves said premises. In other words, injuries occurring off the premises owned or controlled by the employer are not compensable. The new amendment to the Statute expands compensability to parking areas provided for and/or designated by an employer for employee use, not only those premises owned or controlled by the employer. Employment commences when the employee arrives at the parking area prior to reporting to work and ends when an employee leaves the parking area at the end of the work period. This statutory amendment essentially overturns the 2014 Supreme Court holding in Hersh v. County of Morris, which held that an injury is not compensable where the employer did not own or control the parking lot. 

2.    The Supreme Court of New Jersey held a parking lot injury was compensable as the lot was owned and maintained by the employer.
Lapsley v. Township of Sparta, 249 N.J. 427; No. A-68/69-20 (085422) (Supreme Ct. Jan. 19, 2022)

The petitioner was walking from the work site at the end of her workday, through a parking lot, to her car when she was injured. The Judge of Workers’ Compensation found her injuries to be compensable, however, the Appellate Court reversed. Ultimately, the Supreme Court heard the matter and agreed with the Judge of Workers’ Compensation and reversed the Appellate Court’s decision. The Supreme Court reasoned that the injuries were compensable because the parking lot where they occurred was owned and maintained by the employer, was adjacent to the workplace, and was used by employees to park.

3.    Error in disqualifying defense counsel and finding a conflict of interest existed with defense counsel representing the interests of the workers’ compensation carrier and the insured company where the petitioner is a shareholder of the company. 
Alam v. Ameribuilt Contractors, No. A-2114-21 (App. Div. Oct. 28, 2022)

The Appellate Court found that the Judge of Workers’ Compensation erred in disqualifying defense counsel and finding a conflict existed because the judge failed to distinguish the shareholder from the company itself. The Appellate Court reasoned that the corporation is regarded as an entity separate and distinct from its shareholders. Furthermore, according to the court, the insured is the company (not the shareholder), and defense counsel had not taken any position adverse to the insured company. The Appellate Court reversed and remanded the matter to a different Judge of Workers’ Compensation.

4.    Appellate Court finds that the Judge of Workers’ Compensation erred in applying N.J.S.A. 34:15-28.2 and was mistaken in the exercise of discretion in assessing additional fees and penalties for a late payment of an award of disability. 
Ripp v. County of Hudson, No. A-2972-20 (App. Div. Jun. 3, 2022)

The issue in this case was what was considered a 16-day late payment of an award of disability following the entry of that award. Incorrectly applying the law, the Judge of Workers’ Compensation ordered payment of an additional 25%—the maximum—to enforce the order. Further, the judge ordered that the payment be made within 60 days. 

The Appellate Court held that the judge was incorrect in interpreting the statute to require settlements/judgments be paid within 60 days. The court clarified that there is no such statutory requirement. Although Section 28 discusses that simple interest on weekly amounts may be added to the amount of the settlement/judgment for monies paid 60 days or more after an order, the statute does not explicitly require payment within 60 days.

The court went on to explain that Section 28.1 deals with unreasonable or negligent delay or refusal in paying temporary total disability benefits with there being the imposition of additional payment to the petitioner of 25% of the amounts due plus a reasonable legal fee incurred. The court went further to clarify Section 28.2 regarding failure to comply with an order of the Judge of Workers’ Compensation (otherwise known as Order to Enforce). Under 28.2, the judge has the discretion to impose costs, simple interest on monies due, an additional assessment not the exceed 25% of monies due for unreasonable payment delay, along with reasonable legal fees incurred for enforcement of the prior order. Section 28.2 also gives the judge the discretion to impose additional fines and other penalties in an amount not exceeding $5,000 for unreasonable delay, with the proceeds of the penalties paid into the Second Injury Fund. See also, N.J.A.C. 12:235-3.16(h)(1)(i).

The Appellate Court held that the Judge of Workers’ Compensation erred in considering delays in the proceeding prior to the entry of the order; the only period at issue is the period following the entry of the order. As the parties had agreed that payment was required to be made within 60 days of the entry of the order, the only period at issue is the 16 days thereafter. The judge must determine if a delay is unreasonable or not in considering application of Section 28.2. Factors to consider include length of the delay, size of the late payment, and the impact of the delay on the petitioner.

5.    Appellate Court held that respondent is time barred from appealing orders for temporary total disability benefits and judgment for permanency award as they are considered “final” orders and subject to the Appellate Division’s filing time constraints.
Orellana v. Zaklikovsky, No. A-0780-21 (App. Div. Oct. 31, 2022)

There were two main issues in this unpublished case: (1) whether the respondent could appeal prior workers’ compensation orders for temporary total disability benefits and permanency award where the respondent did not previously raise an objection or appeal within a certain amount of time; and (2) whether an order for temporary total disability benefits is considered “final” or interlocutory in determining the required time to file an appeal. The Appellate Court affirmed the prior orders and judgment of the Judge of Workers’ Compensation, finding that the respondent’s appeal was time barred. The court reasoned that orders granting temporary total disability benefits are considered “final”; thus, the respondent’s right to appeal begins following the entry of such an order. Furthermore, the court reasoned that appeals to “final” orders must be filed within 45 days of the entry of an order for temporary total benefits. Failure to do so will time bar the filing of such an appeal. It is noted that the Appellate Court did make mention of exceptions for matters where there are issues of jurisdiction or concerns of great public interest. In those instances, the court may hear such appeals even if filed outside of the ordinarily required 45 days.

6.    Appellate Court reverses Judge of Workers’ Compensation’s denial of a motion to dismiss for lack of coverage where workers’ compensation owner’s coverage was not affirmatively elected. 
Kearton v. E.W. Millwork, No. A-1426-20 (App. Div. Jan. 27, 2022)

The Judge of Workers’ Compensation denied the respondent’s motion to dismiss for lack of coverage, finding that the insurance producer made a mistake on the application for insurance and should have elected coverage for the owners. The judge also found that the carrier was negligent and should have looked at the policy to ensure that coverage was provided to the owners. 

The Appellate Court reversed, reasoning that the Judge of Workers’ Compensation’s findings were not supported by credible evidence and that the record reflected there was no affirmative election of coverage for the owners (the application for coverage for the company declined coverage for owners twice). The court looked to Section 36 of the Workers’ Compensation Act, which governs coverage for members of an LLC. Per Section 36, coverage is afforded when it is elected. The statute further indicates the election may be made at purchase or at renewal and may not be withdrawn during the policy term. For any member of an LLC to opt in for workers’ compensation coverage, all members must do so.

Furthermore, the Appellate Court noted that, even if there was error by the insurance producer, there was no legal basis cited by the Judge of Workers’ Compensation for imputing liability onto the workers’ compensation carrier. Any mistake would be borne by the producer in such a situation. Also, an overall listing of wages and an indication of an owner as an employee within the application, without a specific listing of individual salaries, does not support a position that the owner was a covered employee. Therefore, the Appellate Court held that there was no coverage for the injured owner.

7.    Appellate Court affirms order denying motion seeking additional surgery. The Judge of Workers’ Compensation’s finding that the court-ordered, one-time evaluator’s opinion was more credible than petitioner’s expert was supported by competent evidence.
Martone v. Community Medical Center, No. A-2739-19 (App. Div. Dec. 29, 2021)

This matter involved the petitioner’s motion seeking surgery status after multiple prior surgeries. In light of many contradicting medical opinions regarding the need for treatment and medical opinions regarding symptoms being disproportionate to the medical findings, the Judge of Workers’ Compensation ordered a one-time treatment evaluation to provide an opinion. That evaluator opined that there was no such need. Despite this opinion, the petitioner later obtained an updated medical opinion indicating the need for surgery and maintained that request in a later motion. Three medical experts testified: the prior authorized treating doctor, who did not recommend surgery; the one-time evaluator ordered by the judge, who also did not recommend surgery; and the petitioner’s second-opinion evaluator, who did recommend surgery. At the conclusion of the proceedings, the Judge of Workers’ Compensation found the court-ordered evaluator to be more credible than the petitioner’s second-opinion evaluator, pointing to the risks of an additional surgery and the petitioner’s lack of improvement following prior surgeries. The judge denied the motion for surgery, and the petitioner appealed.

The Appellate Court affirmed the judge’s decision, reasoning that the judge’s opinion was supported by credible medical evidence. Specifically, the respondent was liable to provide reasonable and necessary treatment that will cure or relieve the effects of the injury supported by competent medical testimony. The Appellate Court went on to indicate that determining what is reasonable or necessary does not depend upon a petitioner’s desires or beliefs in that regard, but a showing that the treatment will “probably relieve petitioner’s symptoms and thereby improve [ ] ability to function.” The Appellate Court held that the judge is not bound by the final opinions of any one medical expert or all, and that judges have expertise with respect to weighing the testimony of competing medical experts. Lastly, the Appellate Court found that the judge’s findings and legal determinations were supported by the record. 

8.    Appellate Court vacates and remands Judge of Workers’ Compensation’s order dismissing reopener petition for failure to file within the Statute of Limitations.
Streeper v. State of New Jersey, No. A-1625-19 (App. Div. Mar. 8, 2022)

This matter involves an issue of a formal reopener petition being filed outside of the “last two years of last receipt of a benefit.” Specifically, the petition was filed over seven years after the last receipt of a benefit. However, per the case summary, the petitioner had a reopened petition for a different incident and injury, which was timely filed, that the Judge of Workers’ Compensation was addressing treatment issues for injuries related to the unopened petition. With that, it was the petitioner’s position that, due to representations from a representative of the Division, defense counsel and the handling of the matters in a consolidated fashion by the carrier, it was counsel’s and the petitioner’s belief that the unopened petition had been consolidated under the reopened petition. Furthermore, the carrier apparently was utilizing the claim number for the reopened petition for treatment rendered for the injuries related to the unopened petition. The judge, nevertheless, denied the petitioner’s request to reopen the petition. The petitioner appealed.

On appeal, the Appellate Court vacated the order denying the request to reopen the claim and remanded the matter to the Judge of Workers’ Compensation to consider whether the mistake warranted reopening the petition. The court found that the judge erred in interpreting the statute to indicate that the judge lacked authority to consider whether or not there are grounds to reopen a claim outside of the Statute of Limitations (N.J.S.A. 34:15-27). It is noted that the Appellate Court clearly indicated it was not holding that the petitioner’s claim should be granted but that the Judge of Workers’ Compensation has the authority to review the facts and make a determination as to whether or not there were mistakes to warrant permitting the reopening. 

Citing the 1978 case of Hyman v. Essex Cty. Carpet Cleaning Co., the Appellate Court held that the Judge of Workers’ Compensation may reopen to correct a mistake as “attention to the equities involved is imperative.” 

9.    Appellate Court re-affirms that calculating “compensation paid” for purposes of determining the Section 40 lien includes the overall permanency award; the workers’ compensation counsel fee and costs are not excluded from the calculation.
Panckeri v. Allentown Police Department, 277 A.3d 451 (2022); 251 N.J. 356; No. A-2015-19 (App. Div. Aug. 19, 2022)

In initially calculating the respondent’s potential Section 40 lien, all benefits paid by the respondent to the petitioner or on behalf of the petitioner in the workers’ compensation matter are tallied. Benefits include any overall permanency award that has been paid to the petitioner. Once the overall amount of benefits paid are calculated, that amount is usually reduced by one-third for the customary counsel fee paid in the third-party action, as well as up to $750 for the attorney’s costs in the third-party action. The resulting amount is the respondent’s actual potential Section 40 lien. 

In this matter, the petitioner’s counsel argued that the full permanency award should not be included in the calculations. Counsel argued that the workers’ compensation counsel fee awarded to petitioner’s counsel should also be excluded from the calculations when determining the respondent’s lien amount. Both the New Jersey Supreme Court and Appellate Court addressed the issue. 

By way of review, this is a case where the Supreme Court granted the petitioner’s petition for certification and heard the matter. At the conclusion of the review, the matter was remanded to the Appellate Court for review and reconsideration of the Supreme Court’s prior decision in Richter v. Oakland Board of Education on the issue. 

In this matter, the petitioner filed both a workers’ compensation claim and a third-party action against the tortfeasor. The issue was whether or not the counsel fee included in the permanency award was a part of the respondent’s Section 40 lien right. The petitioner argued that the counsel fee portion is not considered “compensation payments” subject to the lien under Section 40. 

In the underlying matter, the Judge of Workers’ Compensation disagreed, indicating that a Section 40 lien is based upon the overall settlement amount. On the underlying appeal, the Appellate Court agreed and affirmed.

On remand, the Appellate Court affirmed the earlier decision that the respondent’s Section 40 lien applies to the overall award, including the counsel fee. The court reasoned that there is no binding precedent to the contrary. Furthermore, Section 40 provides a clear definition of the counsel fee and costs to be excluded from lien calculations and that fees and costs being those in the third-party claim, not the workers’ compensation action. In other words, the counsel fee and costs discussed in Section 40 reference the two-thirds less $750 that are excluded when calculating the respondent’s lien against the third-party claim proceeds. It is not discussing excluding counsel’s fees and costs from initially calculating the lien as to payments made by the respondent in the workers’ compensation action. 

10.    Appellate Court reverses/remands decision dismissing a claim for lack of compensability. In finding that the injuries were compensable, the court analyzed the exception to § 36 regarding “authorized operation of a vehicle performing duties authorized or directed by the employer” for off-premises employees.
Keim v. Above All Termite & Pest Control, No. A-3660-20 (App. Div. Oct. 12, 2022)

The Judge of Workers’ Compensation dismissed the petitioner’s claim and denied the motion for medical benefits, with prejudice, for lack of compensability. The judge found that the petitioner was not acting within the course and scope of employment when the incident occurred. 

The petitioner was traveling from home in a company-owned vehicle to the employer’s shop to restock chemicals used for work. The employer directed its employees to not carry large quantities of chemicals in their vehicles and preferred that employees not store chemicals in the vehicles overnight. Furthermore, the employer preferred that its employees pick up the chemicals in the mornings as needed. The petitioner was a salaried employee, drove from his home to various worksites to complete his assignments and took the vehicle home at the end of the workday. 

Off-premises employees who do not report to a single premise are compensated only for accidents occurring in the direct performance of their work duties. To determine what constitutes “direct performance of work duties” for off-premises employees, one analysis is the “authorized operation of a vehicle” exception to standard commuting. The Appellate Court found that the Judge of Workers’ Compensation erred in relying upon a prior case that found an incident not compensable as the petitioner was traveling home at the end of the workday for a personal activity. In that matter, the petitioner was not performing a work-related activity on business authorized by the employer. Note: Requires fact sensitive analyses.

 

_{What’s Hot in Workers’ Comp, Vol. 26, No. 12, December 2022 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 © 2022 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.}