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What's Hot in Workers' Comp

TOP 10 DEVELOPMENTS IN NEW JERSEY WORKERS’ COMPENSATION IN 2024

What’s Hot in Workers’ Comp, Vol. 28, No. 12, December 2024

December 1, 2024

by Kiara K. Hartwell

1.    The Appellate Division addresses permanent partial vs. total disability.
Hughes v. Port Auth. of N.Y. & N.J. and State of N.J. Second Inj. Fund, No. A-1188-22 (January 30, 2024)

The Appellate Division affirmed the workers’ compensation order for an increase in the petitioner’s permanency award but denied his claim that he was permanently and totally disabled. The petitioner suffered a cardiac injury on July 14, 2004. He filed a claim, and after a trial in which he asserted he was 100% disabled, a workers’ compensation judge found he was 33 1/3% disabled. The petitioner then re-opened his claim and joined the Second Injury Fund into the litigation. The only issue at trial was whether there was any increase in permanent disability as a result of the July 14, 2024, cardiac event. After trial, which included testimony from the petitioner and experts for both sides, and review of medical records, the judge found the petitioner’s disability increased to 45% but that he was not totally disabled. The petitioner appealed, arguing he should have been found 100% disabled. The Appellate Division noted the judge thoroughly laid out the evidence and reasoning for his decision. While the petitioner argued the judge should have given more weight to his expert’s opinion, the judge explained his reasons for rejecting same. 

2.    The Appellate Division addresses pro se claim for medical and temporary benefits.
Bello v. United Panam Financial Corp., No. A-2986-21 (March 6, 2024)

A pro se petitioner appealed from a workers’ compensation order finding that his injuries were not causally related to his employment. The petitioner filed two claims, both seeking medical and temporary benefits from the respondent. He testified he had to use his own car for work and had it serviced at Holman Cadillac, noting he noticed a chemical order in his car after it was serviced. A week later, he turned on the air conditioner and noticed a stronger odor. He turned it off, stopped to see a client and then stopped at a restaurant to rinse his mouth, at which point he started coughing up blood. The petitioner hired Eagle Industrial Hygiene Associates to test the air quality in his car. In their report, they noted they detected an odor after operating the air conditioner for 1.5 hours and that the products used for his car included some dangerous components. The petitioner retained Dr. Lawrence Guzzardi as his expert, who acknowledged he was not treating patients, had not been affiliated with any hospital since 2016 and most of his income came from his real estate business. Dr. Guzzardi opined the petitioner’s injuries were due to exposure to the chemicals. In response, the respondent offered up the testimony of Dr. Howard Kipen (toxicologist) and Dr. Samuel Kahnowitz (pulmonologist), both of whom found no causal link between his symptoms and the alleged exposure. Afterwards, the judge issued an extensive written decision, finding the respondent’s experts were more credible and, thus, the petitioner failed to establish causation. The Appellate Division found no basis to disturb the judge’s decision, especially as both of the respondent’s experts provided the reasons for their conclusions.

3.    The Appellate Division finds no requirement that a lien had to be paid immediately following settlement with a third-party tortfeasor under N.J.S.A. 34:15-40.
N.J. Transit Corp. v. Joseph, No. A-1194-22 (March 19, 2024)

The Appellate Division vacated and remanded a trial court order denying New Jersey Transit’s application for satisfaction of its workers’ compensation lien as premature after the third-party settlement. The petitioner was injured while working for New Jersey Transit and filed workers’ compensation and third-party cases. While the workers’ compensation case was pending, the petitioner settled with his UM carrier, and those funds were disbursed to him. New Jersey Transit filed a verified complaint and order to show cause, seeking reimbursement of its lien. The trial court denied their application as premature, without hearing oral arguments. The Appellate Division reviewed N.J.S.A. 34:15-40, noting there was no mention of a timeline for satisfying an unperfected lien. In addition, there was no mention of a requirement that a lien had to be paid immediately following settlement with a third-party tortfeasor; instead, it could not be fully satisfied until the workers’ compensation case was finalized and the employer’s liability determined. The case was remanded to the trial court to ensure the lien was protected until the workers’ compensation case was resolved.
 
4.    The Appellate Division affirms dismissal of a workers’ compensation claim as outside the scope of employment. 
Latshaw v. Lakewood Twp. Police Dep’t, No. A-3702-21 (March 25, 2024)

The petitioner was working for the employer as a dispatcher, and while on her meal break in October 2018, she was rear-ended. She filed a workers’ compensation claim, and the employer opposed, arguing she was injured outside the scope of her employment. The petitioner testified that she had employer-approved breaks, including for lunch, and that she was paid for that time, even if she left the premises. She had driven to a restaurant for lunch and was injured on her way back to the station. The employer moved to dismiss her claim as the accident occurred while on a personal errand, and the judge granted same. The Appellate Division referenced the Supreme Court decision in Keim v. Above All Termite & Pest Control, 256 N.J. 47 (2023). Applicable case law and statute were reviewed in defining employment and exceptions, including the premises rule, special mission rule, paid travel time rule and authorized vehicle rule. In going through these exceptions, the Appellate Division emphasized that the petitioner was not covered under any of these exceptions and noted the petitioner’s paid status during her break did not mandate workers’ compensation coverage. The Division affirmed dismissal of the claim.

5.    The Appellate Division addresses compensability for a circumstance involving mandatory reporting by the employer.
Terhune v. Port Auth. of N.Y. & N.J., No. A-3206-22 (May 8, 2024)

The petitioner worked for the employer, and on December 14, 2013, reported for mandatory snow duty. As a part of same, he had to stay at an assigned Marriot Hotel for 12 hours and work the other 12 hours. He was compensated for the entire 24-hour shift. The petitioner had a pre-existing back injury, requiring light exercise. After using the hotel gym, he slipped and landed on his back as he was entering the hotel pool. The incident was reported, and the petitioner was taken to the hospital. Although the respondent denied the claim, arguing it did not arise out of his employment, the judge found the employer required the petitioner to remain at the hotel and all expenses were paid by the employer. The judge found the case compensable and entered a final decision and judgment for 75% permanent disability. The Appellate Division rejected the employer’s appeal consistent with the judge’s reasoning.

6.    The Appellate Division reviews the Workers’ Compensation Act bar.
Barrett v. Hackensack Univ. Med. Ctr., No. A-3441-22 (June 13, 2024)

The Appellate Division reversed and remanded the trial court’s order granting the employer’s summary judgment motion. The petitioner finished her overnight shift, clocked out, and accompanied her son in the respondent’s emergency room. Her son was discharged about three-and-a-half hours later. While walking to her son’s car in the garage, the petitioner tripped and fell. She filed a case against the employer, who filed a summary judgment motion. The judge granted the motion, noting the Workers’ Compensation Act barred her from suing the respondent as she never left the premises after her shift ended. The Appellate Division reversed and vacated the order, noting the petitioner was not in the course of and did not arise out of her employment when the incident occurred.

7.    The Appellate Division addresses coverage in a workers’ compensation and third-party setting.
Tejada v. 74 Industries, Inc., et al., No. A-2643-21 (July 12, 2024)

The insurance carrier issued a standard workers’ compensation and employers liability policy to the respondent. The petitioner was injured at work and filed a workers’ compensation claim, which was resolved through an order approving settlement with dismissal (Section 20). The petitioner also filed a complaint for intentional torts against the respondent, who, in turn, filed a third-party complaint against their insurance carrier, seeking coverage. At the time of the workers’ compensation settlement, there was no reference to the petitioner’s complaint in the Law Division. The petitioner’s complaint alleged intentional wrongs within the exception of the workers’ compensation bar. The respondent then tendered the complaint to their carrier for defense and indemnification, which the carrier declined. The judge granted the insurance carrier’s motion, noting its policy clearly excluded intentional wrongs from coverage. The Appellate Division confirmed the exclusion and policy language were unambiguous in excluding coverage for intentional wrongs and affirmed. 

8.    The Appellate Division analyzes the special employer rule.
Urena v. A&D Freight Logistics, LLC, et al., No. A-2302-21 (July 29, 2024)

Hartford Underwriters Insurance appealed from a February 15, 2022, order denying its motion to dismiss for lack of coverage. A&D Freight cross-appealed from the January 19, 2022, and February 15, 2022, orders, which found it was liable for dependency benefits as the decedent’s employer. The underlying claim resulted from a fatal accident involving the decedent on March 31, 2017. The decedent was the owner-operator of Triple Star Transport, LLC and was assigned to transport materials by A&D Container Logistics and A&D Freight. Triple Star was insured by Hartford; A&D Container was insured by New Jersey Casualty Insurance Company (NJCIC); and A&D Freight was insured by New Jersey Property Liability Insurance Guarantee Association (NJPLIGA). The petitioner (decedent’s wife) filed dependency claims against all three companies and their insurers, which were later amended to include NJM as A&D Container’s insurer. After trial, the judge found Hartford did not cancel its policy per the statute and that all three companies were liable to pay dependency benefits under the theory of dual employment. The Appellate Division found Hartford failed to provide proof that there was personal knowledge of the notice of cancellation being sent to the employer. As such, Hartford failed to meet its burden of proper cancellation. As for the special employer argument, the Appellate Division rejected same, noting the three factors to establish the special employee relationship was present (contract of hire, work essentially that of a special employer and right to control). As such, the Appellate Division affirmed the order denying Hartford’s motion to dismiss for lack of coverage and finding A&D Freight liable for dependency benefits as the decedent’s special employer.

9.    The Appellate Division reviews the intentional wrong exception.
Busby v. Seabrook Bros. & Sons, No. A-1925-21 (August 5, 2024)

The petitioner began working for the employer in January 2017. In April 2017, he injured his right hand while cleaning a commercial mixing machine. The petitioner filed a personal injury action against the respondent, alleging substantial certainty of harm due to removal of the machine’s guard and failure to train the petitioner. The employer moved for summary judgment. After oral arguments, the judge rendered an oral opinion granting the motion. The court found the employer did not engage in any deliberate acts that led to the petitioner’s injury and that their failure to train and to have lockout procedures in place were more akin to negligence. There was also a lack of any prior injuries on Line 9. The Appellate Division affirmed, noting there was no intentional or fraudulent deception by the employer and that the petitioner was injured when Line 9 was unexpectedly activated. 

10.    S2822/A3986 signed into law.

On August 22, 2024, Acting Governor Nicholas Scutari signed S2822/A3986 into law. Under R.S.34:15-64, the attorney fee cap in workers’ compensation cases were at 20%. This bill amends the statute to raise the attorney fee cap in workers’ compensation cases to 25%. This also impacts fees on motions for medical/temporary benefits as well as permanency awards. The rationale behind the amendment was that the 20% fee cap did not account for the additional and increasing duties of workers’ compensation attorneys since the cap was established in 1927. This amendment is effective immediately and applies to all claims pending on or after enactment of the bill. As such, any fees awarded on motions and permanency awards may be subject to this increased fee cap as of August 22, 2024. However, the workers’ compensation judges still have discretion on all fees. 

 

What’s Hot in Workers’ Comp, Vol. 28, No. 12, December 2024 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

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.

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Thought Leadership

Supreme Court of Pennsylvania Holds That Public Policy Does Not Prevent Insurance Coverage for Sex Trafficking Claims

On July 21, 2026, the Supreme Court of Pennsylvania issued an opinion emphasizing the limited circumstances in which courts may invoke public policy to bar insurance coverage, holding in Samsung Fire & Marine Insurance Co., Ltd. (U.S. Branch) v. RI Settlement Trust that Pennsylvania public policy does not preclude coverage for claims alleging that insureds enabled or profited from human sex trafficking. The decision rejects a line of federal district court decisions predicting otherwise and reinforces that Pennsylvania courts will invoke the public policy doctrine only in the clearest of circumstances. RI Settlement is particularly significant because it arose on certified questions from the United States Court of Appeals for the Third Circuit, giving the Supreme Court the opportunity to resolve an issue on which federal courts had predicted Pennsylvania law differently. RI Settlement arose out of four separate civil complaints in which the underlying plaintiffs alleged that, as minors, they were the victims of human sex trafficking at various hotels in Philadelphia. The plaintiffs claimed that the hotel owners were negligent in failing to stop the sex trafficking from happening at their hotels. After the filing of the lawsuits, the hotel owners sought coverage under their Commercial General Liability policies. The insurers initially defended the hotels under Reservation of Rights letters, though the carriers later filed Declaratory Judgment actions seeking declarations that they did not owe a duty to defend or indemnify. In short, the insurers argued in the alternative that they did not owe any obligation to provide coverage based upon Pennsylvania public policy (because the claims violated the Human Trafficking Law – 18 Pa.C.S. § 3011) and the terms and conditions of the policy. On motions for judgment on the pleadings, the District Court found for the insurers on the basis of public policy: There is no duty to defend or indemnify against actions arising out of an insured's criminal conduct related to the sex trafficking of minors. The Court appreciates that it may make public policy the basis of a judicial decision only in “the clearest of cases.” See Minnesota Fire & Cas. Co. v. Greenfield, 589 A.2d 854, 868 (Pa. 2004) (quoting Hall v. Amica Mut. Ins. Co., 648 A.2d 755, 760 (Pa. 1994)). Yet, the Court strains to imagine a clearer case than the one presented here in which the facts alleged indicate that Policyholders engaged in criminal conduct in violation of Pennsylvania's Human Trafficking Law. The hotel owners appealed the matter to the Third Circuit, which petitioned the Supreme Court of Pennsylvania to grant review of two certified questions of law: (1) whether Pennsylvania law had an “overriding public policy” against sex trafficking, such that an insurer’s duty to defend and/or indemnify is abrogated when an insured is alleged to have enabled or profited from such trafficking; and (2) if yes, is that duty abrogated whenever the insured’s alleged conduct would constitute a violation of the Pennsylvania Human Trafficking statute. Importantly, the certified questions did not ask the Supreme Court to determine whether the policies afforded coverage under their terms. Rather, the court was asked only whether Pennsylvania public policy independently barred coverage. As a result, the court assumed for purposes of answering the certified questions that the insurers otherwise owed a duty to defend and addressed only the public policy issue, leaving all policy-based coverage defenses for further proceedings. Because the court concluded that the answer to the first certified question was “no”, it did not reach the second issue. In reaching its determination that Pennsylvania public policy does not prohibit insurance coverage for sex trafficking claims, the court limited the impact of its decision in Minnesota Fire & Cas. Co. v. Greenfield, 855 A. 2d 854, 855 (Pa. 2004), which the RI Settlement opinion emphasized as having been an “Opinion Announcing Judgment of the Court” – or a plurality opinion. In Greenfield, the insured homeowner was sued by the estate of his houseguest who overdosed from heroin that he sold to her. The matter wound its way to the Supreme Court, which determined that the insurer did not owe a duty to defend or indemnify based upon Pennsylvania public policy, which criminalized the sale and use of heroin as a Schedule I narcotic. In RI Settlement, the court “decline[d] the invitation” to extend the rationale of the three-justice plurality in Greenfield beyond cases involving Schedule I controlled substances. In so holding, the justices in RI Settlement refused to “divine an overriding public policy pronouncement by the General Assembly by virtue of its enactment of the Human Trafficking Law.” The opinion further states that it is not “within the purview of this Court to rank the magnitude of the public policy underlying the various crimes defined in the Crimes Code. It is sufficient for the work of the courts to know that the General Assembly has identified conduct it deems harmful and dangerous to the maintenance of an orderly society and criminalized it.” While the court declined to declare that Pennsylvania public policy prohibits coverage for sex trafficking claims, the opinion in RI Settlement expressly states that insurers are free to include appropriate exclusionary language for such causes of actions in their policies if they desire to do so. It will certainly be interesting to see whether the insurance industry accepts the court’s invitation, or perhaps whether the Pennsylvania legislature steps in to clarify that sex trafficking claims are indeed of the type or magnitude that they should not be covered by insurance. In any event, we will, of course, continue to monitor this and other insurance coverage issues that arise before courts in Pennsylvania, New Jersey and throughout our firm’s geographic footprint and around the country.

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

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. 

empty courtroom photo

Result

Summary Judgment Secured for Life Insurance Agent

Thought Leadership

New Jersey Appellate Division Affirms Exclusion of Legal Malpractice Expert as Impermissible Net Opinion

Jack Slimm and Jeremy Zacharias obtained a favorable decision on behalf of their client in a case centering on the admissibility of expert testimony in legal malpractice actions. In Martin v. Loury, the New Jersey Appellate Division affirmed the exclusion of a plaintiff's legal malpractice expert, holding that the expert's opinions on causation and damages were too speculative to support the malpractice claim. The legal malpractice action arose from an underlying employment dispute involving claims for damages stemming from the breach of an employment agreement. The plaintiff alleged that defense counsel committed malpractice during a second trial by failing to recall the plaintiff as a rebuttal witness after the employer's CEO testified. According to the plaintiff's expert, additional rebuttal testimony would have bolstered the plaintiff's damages claims and led to a more favorable result. Both the trial court and the Appellate Division rejected that theory. The courts found that the expert could not explain how the proposed rebuttal testimony would have altered the outcome of the underlying case or resulted in any additional recoverable damages. Notably, the trial judge in the underlying employment matter had already rejected the CEO's testimony as not credible and had accepted the damages analysis advanced by the plaintiff. The court had also determined that the amount of damages was not genuinely disputed. As a result, the expert's opinion that additional rebuttal testimony would have produced a better outcome was unsupported by the record and based on speculation rather than evidence. The Appellate Division agreed that neither the plaintiff nor the expert could identify any actual damages attributable to the alleged malpractice or demonstrate the required element of proximate causation. The court further upheld the trial court's application of New Jersey's net opinion doctrine, finding that the expert failed to provide the necessary "why and wherefore" supporting his conclusion that the attorney's conduct caused a compensable loss. Because the opinions rested on unquantified possibilities rather than demonstrable facts, they were inadmissible. Key Takeaway for Legal Malpractice Defendants For attorneys and firms defending legal malpractice claims, Martin v. Loury underscores the importance of closely scrutinizing an opponent's expert report on the critical elements of proximate causation and damages. The decision demonstrates that a malpractice claim cannot survive where an expert merely speculates that different litigation tactics might have produced a better result. Instead, the plaintiff must present admissible expert testimony grounded in the record that explains how the alleged attorney error probably changed the outcome of the underlying matter and resulted in measurable damages.

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Thought Leadership

Court Allows Recklessness and Punitive Damages Claims to Proceed After Work‑Zone Crash

In a case where a defendant filed preliminary objections against allegations of recklessness and punitive damages, the Susquehanna County Court of Common Pleas denied these preliminary objections. This case stems from a motor vehicle accident, where the defendants car struck the plaintiffs car after the defendant allegedly fell asleep at the wheel, going at a high rate of speed, through a construction work zone. Defendant first objected to the general allegations throughout the plaintiff’s complaint pertaining to “reckless” conduct contending that there were insufficient factual allegations to support the claim of reckless conduct. Defendant next objected to the plaintiffs claim for punitive damages, as punitive damages may only be assessed against a motorist for falling asleep while driving if there is further evidence to prove driver was aware of their drowsiness and risk of falling asleep. Lastly, defendant objected to plaintiffs complaint, claiming it lacked specificity. The court here found that the plaintiff had included in the complaint specific allegations related to the defendant’s alleged recklessness, including allegations regarding speeding in a work zone, almost striking the flagger, falling asleep at the wheel, and striking the plaintiffs vehicle which was stopped. Additionally, the court noted that falling asleep does not come without warning. The court found that these allegations were sufficient to support an allegation of recklessness at the pleadings stage.

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