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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

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. 

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Result

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Thought Leadership

The Enforceability of Online Arbitration Agreements Remains Unresolved in Pennsylvania, But the Pennsylvania Superior Court has Provided Substantive Guidance on the Issue

Key Points: The Pennsylvania Supreme Court confirms that an order compelling arbitration is not immediately appealable as collateral orders. The outcome of Chilutti II has generally left the substantive enforceability issues with browsewrap agreements unresolved in Pennsylvania. Until this issue is resolved by the Pennsylvania courts, companies operating in the Commonwealth should strive to ensure that their registration websites and/or application screens conspicuously present arbitration agreements in manners which ensure their users and consumers assent to the terms of the agreements by following the standards set forth in Chilutti I. Browsewrap agreements have been defined as agreements “‘in which a website offers terms that are disclosed only through a hyperlink and the user supposedly manifests assent to those terms simply by continuing to use the website,’ and typically do not require an electronic signature.” See, Cobb v. Tesla, Inc., 2026 WL 458470, at *1 n. 2 (Pa. Super. Feb. 18, 2026) (citation omitted). They are largely regarded as the “if you keep using this, you agree to everything buried in this link” terms embedded into almost every online agreement consumers and users sign before proceeding with purchases of goods and/or services. While consumers are generally aware of them, many almost never click on the link, nor read them in their entirety. This leaves many consumers and users ignorant of the terms and impact of such agreements. However, one’s ignorance of the otherwise neatly-tucked-away terms rarely renders them unenforceable. The issue of the enforceability of browsewrap agreements has been up for debate for some time in many jurisdictions, including Pennsylvania. Indeed, Pennsylvania had a brief grip on this issue for a period in time. Specifically, in 2023, an en banc Superior Court set forth heightened standards for companies to meet in order to secure assent and enforce browsewrap arbitration agreements. See Chilutti v. Uber Techs., Inc., 300 A.3d 430 (Pa.Super. 2023) (en banc) (“Chilutti I”) Chilutti I involved a husband and wife who sued Uber and its subsidiaries after the wife, a wheelchair bound passenger using Uber’s rideshare service, fell, struck her head, and lost consciousness due to her uber driver failing to provide a seatbelt and making an aggressive turn during the trip. The Chilutti’s filed a negligence lawsuit against Uber and its subsidiaries. In response, the defendants moved to compel arbitration, arguing that “the couple’s conduct on the company’s website and application — when they registered for the ridesharing service — signified that they agreed to be bound by the mandatory arbitration provision found in the hyperlinked terms and conditions.” The trial court granted the defendants’ petition and stayed the proceedings pending the results of arbitration, and the Chilutti’s appealed. On appeal, the Superior Court addressed two issues. First, it addressed the issue of whether it had jurisdiction to hear the appeal. A divided Superior Court determined that it did, with its basis for the holding being that the order from which the Chilutti’s appealed was a collateral order. Next, the Superior Court set out to address the merits of the Chilutti’s substantive claim. The Superior Court concluded that the parties lacked a valid agreement to arbitrate. Its rationale was that Uber’s website and application did not provide reasonably conspicuous notice of the terms to the Chiluttis. In reaching this decision, the en banc Superior Court held that browsewrap arbitration agreements are enforceable in Pennsylvania only if the registration website and application screens explicitly inform consumers that they are waiving the right to a jury trial, the registration process cannot be completed until the consumer is fully informed of this waiver, and, when the agreement is available via hyperlink, the waiver appears at the top of the first page of the terms in bold, capitalized text. Since the ruling, Pennsylvania courts have applied Chilutti I to determine if browsewrap agreements are enforceable.  For instance, the Allegheny County Court of Common Pleas invoked Chilutti I to reject an agreement that lacked an express jury-trial waiver on the assent screen.  See Miller v. Festival Fun Parks, LLC, 92 WDA 2025 (C.P. Alleg. Cnty. Mar. 24, 2025). Similarly, the Superior Court has held that notice which failed to explicitly state the consumer was waiving a jury-trial right did not “me[e]t the strict burden set forth by our en banc Court in Chilutti I.” Pierce v. FloatMe Corp., 348 A.3d 1077, 1088 (Pa. Super. 2025). While the issue of enforceability of browsewrap agreements appeared to have been resolved by Chilutti I, Pennsylvania courts’ grip on this issue has been slackened by the Pennsylvania Supreme Court’s January 21, 2026, opinion in Chilutti II. See Chilutti v. Uber Techs., Inc., 349 A.3d 826 (Pa. 2026) (“Chilutti II”). Therein, the Supreme Court did not address the merits of the Chiluttis’ substantive claim, but rather the issue of whether the Superior Court had appellate jurisdiction to immediately review the orders staying litigation pending arbitration. The Court ultimately vacated the en banc opinion on jurisdictional grounds, holding that the Superior Court did not have appellate jurisdiction because the trial court’s order from which the Chiluttis appealed did not qualify as a collateral order and, thus, the Superior Court erred in holding to the contrary and lacked jurisdiction to entertain the merits” of the Chiluttis’ substantive claim. As such, Chilutti II has rendered Chilutti I nonbinding, and the issue of enforceability of online arbitration agreements remains unresolved. However, in light of the fact the Supreme Court did not address or comment on the merits of the Chiluttis’ appeal, Chilutti I is still meaningful. Specifically, it provides guidance as to the standards a company should strive to meet to ensure they have obtained users’ assent so that they are able to enforce online arbitration agreements. Additionally, it may serve as persuasive authority in judges’ evaluations of petitions and/or motions to compel browsewrap arbitration agreements until this particular issue is properly put before our appellate courts. Keanna works in our Pittsburgh, PA office. She can be reached at (412) 803-1174 or KASeabrooks@MDWCG.com.

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Thought Leadership

Vendor Cyber Attack Compromises PII of More Than 3 Million Hunting and Fishing License Holders in Texas

The Texas Parks & Wildlife Department (TPWD) announced earlier this month that one of its vendors which handles the sale of state hunting and fishing licenses was the victim of a cybersecurity attack. The threat actor appears to have exfiltrated personal driver’s license information, passport numbers, email addresses, phone numbers and addresses of over 3 million hunting and fishing license holders.  The State Parks Department advised that the attack did not compromise social security numbers, dates of birth or financial information. Texas Cyber Command, the state’s new cybersecurity authority formed to protect critical infrastructure and coordinate threat responses across state and local government, reportedly assisted in detecting and containing the attack. TPWD has already set up free credit monitoring for those impacted through Kroll.  According to press reports, no specific group has yet been identified as the perpetrator of the theft. TPWD also advised that business has not been interrupted and license sales were continuing. This incident once again demonstrates that cybersecurity is only as strong as the weakest link in the supply chain. Businesses must prioritize security across their own environments and those of their vendors and contractors as well.

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

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.

Casey Alan Coyle Joins Marshall Dennehey's PA Appellate Practice as a Shareholder in Harrisburg and Philadelphia

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Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.