I had a lot of fun yesterday presenting to the New Jersey State Bar Association's Annual Convention at the Borgata Hotel in Atlantic City.

My topic was "New Jersey Workers' Compensation Litigation: What's New Since Last Year." It was cool to condense a whole year's worth of new cases and changes in the law into a short presentation geared towards litigators. I spoke about general trends affecting the practice in New Jersey and then covered two topics in detail:

1. Medical Provider Claims.
2. • Decision in Burn Surgeons of St. Barnabas v. Shop Rite, decided August 31, 2011.
   • Impact of decision in Burns on bringing/defending Medical provider Claims.
3. Use of "surprise" video surveillance at trial.
4. • Decision in Louis Dubrel v. Maple Crest Auto Group, A-3321-10T3 (App. Div. Decided January 30, 2012).
   • Impact of Dubrel on introducing video at trial.

These are exciting topics that I have written about extensively. In regards to Medical Provider Claims, my in depth analysis is here. On using surveillance at trial - and using "surprise" surveillance in particular, check out my article from February 2012. Read More...

The New York Workers’ Compensation Law (WCL § 119) and the New Jersey Workers’ Compensation Act (N.J.S.A. 34:15-60) allow litigants to use subpoenas to obtain information necessary to the defense of a claim. Used frequently by the defense, the subpoena power is an invaluable tool to obtain necessary information to fully defend a claim. This article provides the basics of using subpoenas in both states.

In both New York and New Jersey we are regularly use subpoenas to investigate prior claims, uncover information (incuding medical reports) from prior settlements, and to obtain medical records. In New York, we use subpoenas to obtain information regarding the claimant's employment history and the validity of statements made by the claimant regarding work searches (in the context of attachment to the workforce investigations).

What is a subpoena?

A subpoena is simply a legal command, instructing someone to show up and give testimony at a certain place on a certain date and time. A "judicial subpoena" is returnable in a court.
A "subpoena duces tecum” requires the production of books papers or other things, and is commonly used to request medical records or employment records. Under both states’ laws, a subpoena duces tecum can be served separately or jointly with a subpoena for testimony (New York CPLR § 2305(b), New Jersey R. 1:9-1, 1:9-2).

A subpoena duces tecum requires the personal appearance of the custodian of the records to be present. The custodian of the records is then expected to give testimony to authenticate the documents being produced. However, the requirement of personal appearance by the records custodian has almost entirely been replaced by acceptance of certified copies. In most cases when a subpoena duces tecum is issued, we are satisfied by receiving copies of the documents requested along with the certification by the custodian that they are accurate and complete, or “kept in the usual course of business.”

Who may issue a subpoena?

A subpoena can only be issued in connection with an ongoing litigated matter. There must be some type of legal action – such as our workers compensation cases – pending. Subpoenas should be signed by the attorney at law under the authority of the particular court or administrative agency.

The New York Worker's Compensation law (§ 119) and the New Jersey Worker's Compensation act (N.J.S.A. 34:15-60) both have specific enabling provisions allowing the administrative agency (the Division of Workers' Compensation in New Jersey) or Board the authority to issue subpoenas. The procedure for issuing and responding to the subpoena is been the same as that followed in the civil courts.

What does the subpoena tell you?

Every subpoena will state the name of the court or administrative body under whose authority the subpoena is being issued. The subpoena also provides the names of the parties to the action or proceeding and usually a case reference number (in New Jersey, it will contain a claim petition number, and in New York, it will contain a Workers Compensation Board number).

The subpoena always indicates to whom it is directed – which may be an employer, hospital, etc. In the case of a subpoena seeking records (a subpoena duces tecum) the subpoena must describe with particularity what documents are being sought. This is especially important in subpoenas seeking medical records.

The subpoena also provide a date, time, and place for which the appearance of a witness or the production of documents must be provided. The subpoena will also typically include language indicating that the recipient risks "contempt of court" for failing to comply with the subpoena. Finally, every subpoena should bear the signature of the attorney who issued it and a statement regarding the court or administrative body under whose authority the subpoena was issued.

Out-of-state subpoenas – issued from the court or agency of another state and seeking records– are not valid in New York or New Jersey (unless it is a federal subpoena bearing the name of the US District Court, which may be valid – ask counsel). There is no obligation to respond to out-of-state subpoenas. However, if the out-of-state subpoena is accompanied by a properly executed authorization for medical records, you may want to honor just as you would any other request for records (in other words, treated as any request for records that does not contain a subpoena).

How should a subpoena be served?

Both states have rules regarding the delivery of a subpoena.

In New York, subpoena must be served in the same manner as a summons. CPLR § 2303. This means that it must be served by personal delivery. Under the rules, a subpoena must be served personally, delivered to a person of suitable age, delivered to a designated agent, or by affixing to the door of the business or residence and mail (but only if the recipient cannot be personally served). CPLR § 2303(a), CPLR §§ 307-312-a.

In New Jersey, a subpoena may be served by any person 18 or more years of age in person. R. 1:9-3. New Jersey also allows the subpoena to be left for the recipient under certain circumstances.

Service by fax is not allowed. Further, service by first class mail is not generally valid except under certain circumstances. Generally speaking, if a subpoena is received in the mail, you should contact counsel to determine its solidity.

Subpoenas may be served statewide in workers compensation proceedings in New York or New Jersey.

What are the witness fees?

In New York, the person subpoenaed is entitled to receive traveling expenses and one days witness fee (in advance). The dollar amounts are specified in the law. At present, New York allows a witness fee of $15 plus $.23 per mile for travel. CPLR § 8001.

In New Jersey, a subpoenaed witness must be paid $2 per day and, if the witness does not live in the county where the hearing will be held, $2 for every thirty miles of travel between the witness' home and the hearing location. N.J.S.A. 22A:1-4. The witness fee should be included with the subpoena.

Is advance notice required?

In New Jersey, the court rules state that a subpoena for the attendance of a witness must be served at least five days before the appearance date. In regards to the timing of service and the timing of the action compelled by the subpoena, the New Jersey courts will consider the reasonableness of the timing of service in determining whether or not the subpoena should be quashed. See State v. Zwillman, 112 N.J. Super. 6 (App. Div. 1970) cert. denied 57 N.J. 603 (1971).

In New York, some subpoenas have specific notice requirements. A subpoena for a deposition must be served with 20 days notice. CPLR § 2106. Subpoenas for hospital records must give at least three days notice.CPLR § 2306. Outside of these situations, there are no stated minimum or maximum time periods – but the courts have consistently held that "reasonable notice" must be presented in order for a party to be compelled to produce documents. What is "reasonable notice" is up for interpretation.

How do the HIPAA rules apply to subpeonas?

As I've written about in my books, a litigant in a workers compensation proceedings has no Federally-protected privacy interest in his medical records relating to that condition or claim. In fact, the Health Insurance Portability and Accountability Act (HIPAA) has three specific "exemptions" for workers compensation related matters:

• If the disclosure is "as authorized and to the extent necessary to comply with laws relating to workers compensation or similar programs established by law that provide benefits for work-related injuries or illness without regard to fault." 45 C.F.R. § 164.512(l).
• If the disclosure is required by state or other law, in which case the disclosure is limited to whatever the law requires. 45 C.F.R. § 164.512(a).
• If the disclosure is for the purpose of obtaining payment for any healthcare provided to injured or ill employee. 45 C.F.R. § 164.502(a)(1)(ii).

Regardless of these exemptions in the HIPAA rules, parties receiving a subpoena generally do not understand the HIPAA requirements nor do they understand the subtleties of the exemptions drafted for workers compensation proceedings. Therefore, subpoenas issued to healthcare providers in the case of an injured worker should also contain an executed medical release authorization (HIPAA-compliant) to ensure that the entity actually responds to the subpoena. It has been my experience that despite the fact that there are three clear "exemptions" in the case of workers compensation claims – and despite the fact that our subpoenas clearly identify that it is being issued in connection with a workers compensation claim – medical care providers are extremely unlikely to respond to a subpoena without a HIPAA release attached.

Please also note that in 2003 the New York law was changed to indicate any subpoena for medical records must be accompanied by the patient signed HIPAA authorization. CPLR § 3122.

What is a “Motion to Quash”?

In cases where a subpoena appears to have been improperly issued, or request information which may be privileged (attorney-client privilege), the recipient cannot simply ignore the subpoena but must make a formal request to withdraw or modify the subpoena. In New York, the recipient should contact the issuer. CPLR § 2304.

Subpoena Checklist.

When you receive a subpoena asking for medical records or the proceeds of your workers’ compensation file, consider the following:

• Was the subpoena appropriately served according to all the rules?
• Does the caption of the subpoena provide you with information regarding the nature of the legal proceeding? The caption of the subpoena tells you whether or not the subpoena was issued by an administrative agency, a court, or government official.
• The subpoena must contain the identity of the person or entity to whom the subpoena is directed.
• Does the subpoena call for personal testimony or records?
• If the subpoena is requesting medical records, does it include a HIPAA authorization?

Read More...

An injured worker can pursue both his New York workers' compensation claim and a claim against the actual tortfeasor at the same time. Pursuant to New York Workers' Compensation Law § 29, the employer or carrier responsible for providing workers' compensation benefits is deemed to have a lien against the proceeds of the third party action. The lien is simple to calculate: it is the sum of the medical benefits issued and indemnity payments made, including future benefits.

Entitlement to reimbursement.

The employer or workers' compensation carrier is entitled to be reimbursed for all benefits paid up to the date of the third party recovery less the proportionate share of the costs of litigation. This is simply the proportionate cost of the attorneys fees and litigation expenses (filing fees, copying fees, records retreival costs, expert costs, etc.) incurred to obtain the judgment or settlement against the actual tortfeasor. (Note: when the third party case is a motor vehicle accident case, the compensation lien does not apply to the first $50,000 of first party benefits available, see NY No Fault Law § 5102 & WCL § 29(1-a)).

Since the decision in Kelly v. State Insurance Fund, 468 N.Y.S.2d 850 (1983), the apportionment of litigation expenses must be made against the entire benefit that the carrier obtained from the third-party recovery -in other words, the litigation expenses and attorneys fees are not "front loaded" into the immediate settlement proceeds, but have to be "spread out" over the life of the workers' compensation benefits which would be due to the claimant. Kelly also introduced the concept of further reducing an employer/carrier's reimbursement by including the "present value" of the future benefits obligation extinguished to be paid as a litigation expense - which serves to reduce the employer/carrier's lien further. In cases involving death, permanent total disability, or scheduled loss of use, the Kelly "future benefits obligation" can be calculated using the present day value of an annuity to cover the cost of these future obligations. (Of course - this should be negotiated - and where a potential obligation is simply unknowbable, like future medicals - it should be left out).

If the claimant's third-party recovery is greater than the amount of workers' compensation benefits issued - then the employer/carrier get something more than just reimbursement - the employer/carrier has the right to credit against future payments to be made. (This credit is called a "holiday" by New York practititioners). Of course, this credit is reduced by the percentage of litigation costs assessed against the employer.

Amount of Employer’s (or Carrier’s) Recovery.

If the amount recovered by the worker (or their dependents) from the third person is equal to or greater than the employer’s (or carriers) obligation under the Workers’ Compensation Law, then the employer is entitled to be reimbursed for the medical expenses incurred and compensation payments made to the worker or his family less the workers’ expenses of suit and attorney’s fees in pursuing the action against the third person. In order to calculate the amount of reimbursement, a statement of the third party settlement/recovery with all litigation expenses must be obtained.

If the amount recovered by the worker from the third person is less than the employer’s obligation, the employer is liable for the difference plus the worker’s attorney’s fees and costs of suit. The employer or carrier is entitled to the recovery from the third person, leaving their obligation to the worker as the difference between the compensation and the medicals paid out and the third person recovery, plus attorney’s fees and expenses of suit in pursuing the third person.

“Expenses of suit” is not limited to a specific dollar figure and “the attorney’s fee percentage" will effect the amount of reimbursement the employer/carrier is entitled to.

Confusion about Burns.

The decision in Burns v. Varriale, 820 N.Y.S.2d 655 (3'd Dep't 2006), aff'd, 9 N.Y.3d 207 (2007), caused confusion about how to apply the subrogation rules in cases where the future compensation is difficult to calculate - for example, in permanent total disability cases (which can go on to the claimant's life expectancy) or claimants not yet found "permanently partial" or totally disabled at the time of the settlement. However, the practical take away from Burns is simple: at the time of settlement, the carrier/employer should be reimbursed from the proceeds of the third-party settlement (less their share of litigation expenses and attorneys fees, of course!) but because the future benefit is unknown, there is no "holiday" or credit. Instead, the employer/carrier simply pays out the ongoing benefits - whether they be indemnity or medical - as they come due at the same proportionate rate as the employer/carrier's portion of those litigation expenses until the lien is exhausted.

Permission to settle third-party case.

Workers' Compensation Law § 29(5) requires either the carrier's written consent or a compromise order from the court in which a third-party settlement is pending for a claimant to settle a third-party case and continue to recieve compensation benefits. If an employer or carrier refuses to consent to a settlement, a claimant may move in the trial court for judicial approval of the settlement, as well as an equitable apportionment of the litigation costs. When an employer/carrier consents to a third-party settlement, the right to future offset should be set forth - otherwise the Board can make a determination.

The employer/carrer should reserve the right to future offsets in writing and at the time the third-party settlement is approved. Remember - if the claimant fails to seek the approval fo the employer/carrier for the third-party settlement, or abandons that third-party claim without providing notice to the employer/carrier, her right to compensation benefits is extinguished!

Time limits.

The employer by statute has an opportunity to separately pursue reimbursement of workers’ compensation benefits paid and payable if the injured worker has not done so within one year from when the action accrued or six months after the awarding of compensation whichever comes first, but only 30 days after the injured worker has been notified in writing by personal service or by certified mail that the failure to commence an action within 30 days will operate as an assignment of the claim to the employer. See WCL § 29(1).

Greg Lois joins the faculty of the National Business Institute for a seminar on "Medicare Set Asides in Personal Injury Litigation" to be presented in Newark New Jersey on August 7, 2012.

My topics are:

"Taking Medicare's Interests Into Consideration: Mandatory Insurer Reporting" Overview of the current and projected mandatory insurer reporting landscape as set out by Section 111 of the Medicare/Medicaid, SCHIP Extension Act of 2007

1. The Contextual Background of the Act;
2. Which Entities are Required to Report to the Government;
3. What Information is Necessary for Reporting;
4. The Penalties for Incomplete Submissions or Non-Compliance;
5. The Effects of Reporting on the Litigants and Their Case.

More information, including registration info, to follow.

Under the Longshore and Harbor Workers' Compensation Act (LHWCA), when an employee has a claim for damages against a third party (other than his employer) he may pursue both a civil remedy and collect benefits under the LHWCA. Section 33(a) of the LHWCA provides:

If on account of a disability or death for which compensation is payable under this Act the person entitled to such compensation determines that some person other than the employer or a person or persons in his employ is liable in damages, he need not elect whether to receive such compensation or to recover damages against such third person.

33 U.S.C. § 933(a).

It used to be the case that a claimant would have to "choose" ebtween collecting workers' comepnsation benefits and maintaining control of their third-party case, under an "assignment" theory. That was changed, and Section 33(b) of the LHWCA provides:

Acceptance of compensation under an award in a compensation order filed by the deputy commissioner, an administrative law judge, or the Board shall operate as an assignment to the employer of all rights of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such acceptance. If the employer fails to commence an action against such third person within ninety days after the cause of action is assigned under this section, the right to bring such an action shall revert to the person entitled to compensation. For the purposes of this subsection, the term "award" with respect to a compensation order means a formal order issued by the deputy commissioner, an administrative law judge, or the Board.

33 U.S.C. § 933(b).

The LHWCA is very clear about how the proceeds of a third-party recovery are to be used:

Section 33(e) of the LHWCA provides:
Any amount recovered by such employer on account of such assignment, whether or not as the result of a compromise, shall be distributed as follows:

1. The employer shall retain an amount equal to
2. 1. the expenses incurred by him in respect to such proceedings or compromise (including a reasonable attorney's fee as determined by the deputy commissioner or Board);
   2. the cost of all benefits actually furnished by him to the employee under Section 7;
   3. all amounts paid as compensation;
   4. the present value of all amounts thereafter payable as compensation, such present value to be computed as in accordance with a schedule prepared by the Secretary, and the present value of the cost of all benefits thereafter to be furnished by section 7, to be estimated by the deputy commissioner, and the amounts so computed and estimated to be retained by the employer as a trust fund to pay such compensation and the costs of such benefits as they become due, and to pay any sum finally remaining in excess thereof to the person entitled to compensation or to the representative.
3. The employer shall pay any excess to the person entitled to compensation or to the representative.

33 U.S.C. § 933(e).

This is a straight-forward and dare I say "fair" way of dealing with a third-party recover in the context of simultaneous workers' compensation benefits. The employer/insurer never is allowed to recover more than the benefits actually issued - even when the employer undertakes the entire cost of obtaining a third-party settlement. Any excess money recovered fromt he actual tortfeasor (in excess of the compensation issued by the employer/carrier) is paid directly to the claimant and/or serves as an offset against any future compensation which may be payable.

In order to calculate the Section 33(f) credit, one must break down a claimant's recovery to its net amount. This amount is calculated by taking a claimant's total recovery and subtracting the legal expenses incurred by the claimant. This net amount is then compared to the amount which is due as compensation. If the net amount of recovery exceeds the amount of compensation due, then the employer is not required to pay anything to the claimant. Any previous payments by the employer would be refunded from the claimant's recovery. Bartholomew v. CNG Producing Co., 862 F.2d 555, 22 BRBS 42 (CRT) (5th Cir. 1989); see also Nacirema Operating Co. v. Oosting, 456 F.2d 956 (4th Cir.), cert. denied, 409 U.S. 980 (1972); 33 U.S.C. § 933(e).

If the claimant's third-party recovery is less than what the employer would be required to pay, the employer only pays the difference between the third-party recovery and the compensation, see Inscoe v. Acton Corp., 19 BRBS 97 (1986), provide that the provisions of Section 33(g) are complied with. Regardless of whether the recovery is more than or less than the compensation due, the employer is entitled to set off any net recovery from a third party. Jackson v. Land & Offshore Servs., Inc., 855 F.2d 244, 21 BRBS 163 (CRT) (5th Cir. 1988).

In dealing with the Section 33(f) credit, the credit is not limited to the claimant's economic loss. The credit is also applied to such items as pain and suffering and death benefits. The employer's credit also includes payments for any future medical benefits for which the employer would be liable. Inscoe v. Acton Corp., 19 BRBS 97 (1986). As per 33 U.S.C. § 933(g), the claimant must obtain the employer/carrier's permission to settle the third-party claim for less than the compensation would be entitled under the Act.

New Jersey Statute 34:15-40 governs the credit due a respondent for any third-party recovery by the petitioner and provides in part:

. . . out of that part of any amount about to be paid in release or in judgment by such third person or his insurance carrier on account of his or its liability to the injured employee or his dependents, the employer or his insurance carrier shall be entitled to receive from such third person or his insurance carrier so much thereof as may be due the employer or insurance carrier pursuant to subparagraph (b) or (c) of this section. Such sum shall be deducted by such third person or his insurance carrier from the sum to be paid in release or in judgment to the injured employee or his dependents and shall be paid by such third person or his insurance carrier to the employer or his insurance carrier. Service of notice, hereinbefore required to be made by the employer or his insurance carrier upon such third person or his insurance carrier, shall be by registered mail, return receipt and in cases other than an individual shall be mailed to the registered office of such other third person or his insurance carrier.

The Appellate Division has recently held that where an individual settles an intentional tort suit against an employer, the workers' compensation carrier is entitled to assert its N.J.S.A. 34:15-40 lien with respect to the settlement amount. Specifically, the court found that the tort litigation is equivalent to a third party action and that without the lien the petitioner might receive a double recovery for the injuries. Calalpa v. Dae Ryung Co., Inc., 357 N.J. Super. 220 (App. Div. 2003).

1. How to assert a workers’ compensation lien under N.J.S.A. 34:15-40.
   Serve notice upon the liable third person or that person’s insurance carrier, that compensation has been applied for by the injured employee (or his dependents). As a practical matter, it is a good idea to serve a notice letter upon the plaintiff/worker, as well as the plaintiff’s attorney, usually the same attorney representing the worker in the compensation matter.
   
   How- by registered mail, return receipt requested upon the third person or his insurance carrier or (when not an individual) upon the registered office of such third person or his insurance carrier.
   
   
2. Effect of notice.
   When notice is given, as above, to the liable third party or their insurance carrier, it then becomes the duty of the third person or their carrier to inquire, from the employer or the employer’s insurance carrier, the amount of medical expenses incurred and compensation paid to the injured worker or their dependents. It also becomes the duty of the third person (or carrier) to inquire from the injured worker the amount of attorney’s fees and expenses of suit in the action or settlement against the third person (or carrier) before the third party makes any payment to the injured worker.
   
   Then, out of any amount to be paid by the third person (or carrier) in release or in judgment of the claim, the employer (or carrier) is paid the amount they are entitled to. That amount is deducted from the monies to be paid to the injured worker (or dependents) and paid directly to the employer or carrier.
   
   Failure to strictly comply with notice requirements could preclude your right to reimbursement.
   
   
3. Amount of Employer’s (or Carrier’s) Recovery.
   If the amount recovered by the worker (or their dependents) from the third person is equal to or greater than the employer’s (or carriers) obligation under the Workers’ Compensation Act, then the employer is entitled to be reimbursed for the medical expenses incurred and compensation payments made to the worker or his family less the workers’ expenses of suit and attorney’s fees in pursuing the action against the third person. Usually, this yields a two-thirds recovery, but the recovery can be greater depending on the contingency fee arrangement.
   
   If the amount recovered by the worker from the third person is less than the employer’s obligation, the employer is liable for the difference plus the worker’s attorney’s fees and costs of suit. The employer or carrier is entitled to the recovery from the third person, leaving their obligation to the worker as the difference between the compensation and the medicals paid out and the third person recovery, plus attorney’s fees and expenses of suit in pursuing the third person.
   
   “Expenses of suit” is limited to $750.00, and “attorney’s fee” cannot exceed 1/3rd on the part of the recovery to which the employer is entitled to. The 1/3rd cap does not apply to sums in excess of the employer’s entitlement.
   
   
4. How to assert a lien when the workers does not settle with or file suit against the liable third person.
   If the injured worker does not settle with or file suit against the liable third person within one year of the accident, the employer or carrier must make a written demand that the worker or dependent do so.
   After 10 days of the written notice to the worker (or dependents), the employer (or carrier) can either effect a settlement with, or file suit against, the third person (or the carrier). Any such action can only be for such rights as the injured worker would have had against that third person (Thereafter, the worker is barred from filing a claim on their own behalf).
   
   If the amount obtained from the third person (or carrier) is more than the amount of the employer’s lien and expenses of suit, such excess is then paid to the injured worker (or their dependents).
   Where the worker has instituted an action against the liable third person, but the action is procedurally dismissed, the employer (or carrier) is entitled to have the dismissal set aside and continue the prosecution of the action upon motion or application to the Court within 90 days of the dismissal.
   
   
5. Time to file suit.
   In New Jersey you must file suit against the adverse party within two years from the date of accident, no later, or be forever barred. N.J.S.A. 2A:14-2.

On December 30, 2011, the U.S. Department of Labor issued a new regulation excluding all workers employed in the repair of any recreational vessel (regardless of length) from coverage under the Longshore and Harbor workers’ Compensation Act. A recreational vessel is defined as a vessel that is manufactured or operated primarily for pleasure or leased, rented, or chartered to another for pleasure.

At the edges, the new regulation will not impact marina operators, because the LHWCA excludes from the term “employee” those “individuals employed by a marina and who are not engaged in construction, replacement, or expansion of such marina (except for routine maintenance),” provided the worker is subject to a state compensation law.

Louis Dubrel testified that before his work-accident “I used to do it all . . .I used to be Superman . . [but now I’m so disabled] I’m Mighty Mouse.” Unfortunately for Dubrel, following this testimony his employer presented video showing “Mighty Mouse” was actually still “doing it all” - including winning prize money as a jockey racing horses! On Monday, January 30, 2012, New Jersey’s Appellate Division agreed that Dubrel’s fraud was "flagrantly galling" and upheld the denial of all benefits. On January 31, 2012, a state Grand Jury indicted Dubrel for insurance fraud and perjury.  

This case, involving twin brother evidence, horse racing prize money, and surveillance video is a great starting point for talking about the nuts and bolts of trying a case where fraud becomes an issue.

But first, the law.

Under the New Jersey Worker's Compensation Act fraud section (§57.4(c)(1)),

"if a person purposely or knowingly makes, when making a claim for benefits…a false or misleading statement, representation or submission concerning any fact which is material to that claim for the purpose of obtaining the benefits, the Division may order the immediate termination or denial of benefits with respect to that claim and a forfeiture of all rights of compensation or payments sought with respect to the claim."

On my blog I’ve often discussed (see here, and here) the use of videotape surveillance in New Jersey courts. I've also written about the Gross v. City of Neptune decision – a 2005 case in which the employer was barred from using surveillance which was obtained after the trial began because the surveillance was not referred to on the "Pre Trial Memorandum." The Pre Trial Memorandum is executed by the parties and the Judge and lists all of the witnesses both parties will call as well as the issues in dispute. In the Gross case, because the employer did not reveal that they had videotape evidence on the pretrial memorandum the judge of compensation ruled the videotape evidence was “surprise testimony” and could not come into the case. The Appellate Division upheld that exclusion.

New case: showing how “new” video – not revealed on the Pre Trial Memorandum or provided in discovery before trial – can get into a New Jersey case.

Louis Dubrel claimed he sustained permanent injuries to his neck and low back from an injury at work in February 2004. Dubrel testified “Now I’m Mighty Mouse.” According to the claimant, before his debilitating injuries he was able to travel, go fishing with his kids, and ride off-road motorcycles. The petitioner also testified that he used to ride, train, and race horses. At trial in 2009, the petitioner testified that "I can't ride [horses], not a shot." He further testified that he could no longer perform household chores and that it was even a challenge to dress himself.

After testifying that he had to give up his horse racing hobby – the claims adjuster – who happened to be a horse enthusiast herself – found references on a popular horse racing website showing that the claimant had actually jockeyed less than two weeks before he testified – and had recently won prize money! Based on what she learned, the adjuster assigned surveillance.

Surveillance was successful in obtaining videotape of the claimant, as he worked on his farm, doing carpentry, taking care of animals, etc. In the video and according to the surveillance investigator, the claimant was unimpaired in his activities of daily living. The claimant was then presented with the videotape and informed that the employer was going to call the surveillance agent and the adjuster at trial.

The video was shown, over the objections of the petitioner’s counsel. The adjuster testified, too, about what she had discovered on the horse racing websites. In his own defense, the claimant was able to show he actually had a twin brother. However, the petitioner never attempted to demonstrate or argue that it was actually the twin brother who was caught on videotape or engaging in the horse racing activities.

The judge of compensation stated that the claimant had "made an unambiguous claim that he no longer drives horses" but that testimony was made "just one week after he was the driver of [his horse] Finest Firewater in a qualifying race in Delaware" and concluded that there was "no charitable explanation they could characterize these statements made by the petitioner under oath as anything other than false." The judge found that it was clear from the context of the petitioner's remarks that the statements were made to obtain workers compensation benefits fraudulently.

Practice Tips

In this new decision the Appellate Division approved the inclusion of surveillance video obtained after the claimant testified because it was “relevant to prove or disprove a fact in issue.” The Appellate Court found that the video surveillance and the information about the petitioner’s horse racing and prize winnings were not “surprise witnesses” and the Compensation judge had not abused his discretion by letting that testimony into the case.

The Appellate Court ruled that although surveillance tapes made after the start of trial should generally be excluded, an exception arises where the employer could not be aware of the circumstances necessitating the surveillance before the start of the trial.

In cases like this one, where the claimant testifies that he can do “nothing,” denies participation in specific activities, or testifies he is as weak as a fictional cartoon mouse, additional investigation and even surveillance should be considered to disprove those claims.

Decision: Louis Dubrel v. Maple Crest Auto Group, A-3321-10T3 (App. Div. Decided January 30, 2012)