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) 

What are the time limits on filing an occupational?

In New Jersey, occupational disease claims must be filed "within two years after the date the claimant first had knowledge" of the nature of his disability and its relation to his employment. Knowledge means recognition of the most notable characteristics of the disease sufficient to bring home a substantial realization of its extent and seriousness. Knowledge of the "nature" of a disability includes knowledge that the injury is compensable. In Earl v. Johnson & Johnson, 158 N.J. 155 (1999)., the Court found that although petitioner's respiratory problems began in 1989, the petitioner was not aware that the condition had deteriorated into a permanent disability until undergoing pulmonary function tests in 1993 and it is from that time that the statute of limitations runs.

When will an out-of-time defense be sucessful?

The New Jersey Appellate Division just upheld the dismissal of a high school teacher's lung cancer claim despite the fact that the teacher was able to demonstrate asbestos exposure over a twenty year period. The workers' compensation judge focused on the petitioner's knowledge of knowledge of exposure and cognizance that his lung cancer condition might have been related to the asbestos exposures in his workplace

The petitioner argued that "knowledge" of causation could not be imputed to him. However, the Respondent was able to demonstrate that the claimanthad "better than a master's degree," an intimate familiarity with the school environment including the ongoing remediation programs he personally observed, and the fact that the claimant actually testified about the asbestos exposure hazards in the school in public hearings that took place before the school board.

Given this backdrop of obvious knowledge regarding the workplace exposure to asbestos, the Workers' Compensation Law Judge ruled that waiting until 2004 to file his workers' compensation claim was beyond the statute of limitations, because the claimant was diagnosed with cancer in 2000, and the statute started running at that time. The petitioner did not file his claim within the two year limitation of the Act, and his case was dismissed. The Appellate Court upheld the dismissal.

Practical tips.

In the asbestos case, the employer was well armed with the petitioner's own prior testmony, given directly to the employer (remeber: the claimant was a teacher and the respondent was the school board), in which he publicly declared his knowlege of the hazardous condition in the workpace. IN most cases, public declaratiosn made by a pettiioner years before he or she files an occupational claim, publicaly acknoweleging their understanding of a specific hazard in the workplace, will not be available. But another case, also recently decided, demonstrates that good claim investigation can uncover similar evidence that a claimant knew of the alleged occupational injury long before the filing of their formal claim.

In Graf v. Mtichell Park Flooring, decided December 19, 2011, the claimant brought an occupational claim against a sucession of employers, alleging that use of a floor sander at work created a permanent residual disability. He recieved treatment with a chiropractor in 1999, and the record of that care was obtained by the employer. The Judge of Compensation relied on that record as demonstrating that the claimant "knew the nature and extent of his claimed disability" at the time of that treatment (in 1999). The Appellate Division upheld dismissing his workers' compensation claim, which wasn't filed until 2004, as being filed beyond the two-year statute of limitations.

Cases: Russo v. Hoboken Board of Education, A-1861-10T4 (N.J. App. Div., Decided November 29, 2011) and Graf v. Mtichell Park Flooring, A-1775-10T1 (N.J. App. Div., decided December 19, 2011).

Most-Requested Articles of 2011 . . .

New York 

10) Challenging Wages in Concurrent Employment Cases Post reform.
9) Overview of the New Permanent Disability Guidelines Effective January 2012.
8) When Are "Exotic Performers" not Employees in New York?
7) New York Workers' Compensation settlements.
6) Suicide and Compensation.
5) Applying the "Attachment to the workforce" test to ongoing benefits.
4) Effective Use of video at trial in New York.
3) Applying the Medical Treatment Guidelines to Out-of-state claimant
2) Rejecting Variances Based on Defective Filings.
1) The Medical Treatment Guidelines in Practice.

New Jersey

9) Using Facebook and other Social Media to Nail Frauds in New Jersey.
8) Attorneys' Fee Trends in New Jersey.
7) Reconstructing Wages in New Jersey.
6) Trying a Medical Provider Claim - the Burn Surgeon's Case.
5) Using a "Tie-Breaker" to Resolve a Medical Treatment Dispute.
4) Was It Too Much Facebook or Too Much Work that Killed Cathleen Renner?
3) Using Video at Trial in New Jersey.
2) Penalties for Carrier's Actions in New Jersey and New York.
1) Love and Bullets for Valentines Day.

Longshore and Defense Base Act

5) Initial Reporting under the Longshore Act.
4) Defenses under the Longshore Act.
3) Calculating Wages under the Defense Base Act.
2) The "True Doubt" Rule.
1) New Longshore Rates in Effect.

SIMPLY THE MOST PRACTICAL, up-to-date and easy-to-understand guide to New Jersey workers' compensation claims. Tackling issues like employee fraud, this book is designed for employers, attorneys, claims adjusters, physicians, self-insured employers and vocational rehabilitation workers.

This guide is written in plain English by New Jersey attorneys and provides a detailed analysis of relevant statutes and regulations; a complete recap of recent court decisions; and a full description of current practice and procedure. This book provides a behind-the-scenes look at the complicated issues and makes the law understandable for business owners.

Updated chapters on OSHA regulations, new "emergent" motions for medical benefits, the Medicare Secondary Payer Act, and HIPAA considerations are included. Available in print here.

There may be recession on, but New Jersey's petitioner's attorneys will not be feeling the pinch!  Petitioner's attorneys are moving forward on two fronts to skim more money from the compensation system.

Increasing Fees on Awards.

Attorneys fees in New Jersey are controlled by N.J.S.A. 34:15-64, which states that an attorneys fee must be "reasonable" and can not exceed 20% of the total award.

In practice, the Division issues a memorandum each year that sets a threshold fee. In the past, if a petitioner's attorney wanted to get a bigger fee than the "threshold" he or she was required to present an affidavit of services, detailing exactly what they did to earn that money. In practice, Judges of Compensation nearly always award the maximum fee.

Last year, the "no questions asked" fee threshold was $40,000. For 2012, the "no questions asked" fee jumps to $42,000. Also, under the new practice (effective January 3, 2012), petitioner's attorneys will no longer have to submit an affidavit of services - just make some sort of argument for why they are due an enhanced fee on the record.

New Jersey to reconsider fees on "Voluntary" Compensation.

When an employer knows (with certainty) that an employee has been injured and will suffer some degree of permanent injury (for example, when there has been loss of a limb), a voluntary tender, made at the appropriate time, may be offered to reduce exposure for attorney’s fees when the underlying claim is disposed of.

N.J.S.A.34:15-64 provides (in part):

When, however, at a reasonable time, prior to any hearing compensation has been offered and the amount then due has been tendered in good faith or paid within 26 weeks from the date of the notification to the employer of an accident or an occupational disease or the employee’s final active medical treatment or within 26 weeks after the employee’s return to work whichever is later or within 26 weeks after employer’s notification of the employee’s death, the reasonable allowance for attorney fee shall be based upon only that part of the judgment or award in excess of the amount of compensation, theretofore offered, tendered in good faith or paid.

There is now a pending proposed amendment to Section 64 which would grant an attorney a fee on this voluntarily tendered payment.

In other words - even where the petitioner did not have an attorney at the time a voluntary tender was issued - if he later retained counsel his attorney would be due a fee on any money already paid to him or her.

As recently as 2005 the Appellate Division affirmed the decision of the workers’ compensation judge to deny the employer the benefit of a reduced contribution to the petitioner attorney’s fee award because the employer’s voluntary tender of disability benefits was untimely when it occurred slightly beyond the twenty-six week period allowed by statute.  In reviewing the statutory history of N.J.S.A. 34:15-64 and viewing that statute together with N.J.S.A. 34:15-16, the Appellate Division concluded that when the NJ Legislature amended this statute in 1979 it intended to create a “bright line” timeframe and set a clear and certain deadline an employer must meet to reduce its contribution to an attorney fee award by invoking the “26-week rule.”  In other words - most voluntary payments to injured workers have been shielded the increased costs associated with attorneys fees - and that may change.

The law has not changed yet - but the proposed legislation change will be discussed in committee on December 8th.

Of course, we will continue to monitor this proposed change and keep you updated on any significant developments.

In the case of Calle v. DeJana Industries, decided October 7, 2011, the New Jersey Appellate Division found that "reconstructing" wages for a part-time seasonal worker to an earning level equivalent to a full-time employee was appropriate based on the claimant's testimony that he was an "off the books" worker elsewhere. The petitioner testified that when not working part-time working for the employer he "would stand on a corner waiting for work" as a day laborer. The Judge of Compensation considered this testimony as proof that the claimant was disabled from all full-time employment even though the claimant was only a part-time worker for the defending employer and did not produce any proofs of the alleged full-time work elsewhere. By making this determination, the claimant's wages were "reconstructed" to a higher rate, entitling him to a much larger award.

When wages are "reconstructed."

The first step in determining the appropriate rate of compensation is to determine "wages" as defined in N.J.S.A. 34:15-37. The rate of compensation may not exceed 70% of petitioner's wages at the time of the accident subject to the maximum and minimum rate in effect for the year the accident occurred.

In practice, claims adjusters should obtain “26-week wage statements” from insured/employers so that an average wage can be computed. Why 26 weeks? The Workers' Compensation Act (N.J.S.A. 34:15-37) uses "six months" as the appropriate look-back period for wages.

The New Jersey Supreme Court in Katsoris v. South Jersey Publishing Co., 131 N.J. 535 (1993) instructed that reconstruction of wages is appropriate when necessary to compensate the worker for loss of earning capacity, i.e., diminution of future earning power. The 'loss of earning capacity' includes a loss of "potential for full employment." Where an employee, who is permanently disabled due to an injury on a part-time job, also has a full-time job, use of a "reconstructed" work week is appropriate if there has been an impact on the employee's ability to return to a full-time job. (Citing Mahoney v. Nitroform, 20 N.J. 499 (1956). By contrast, where a worker with a part-time and full-time employment is permanently partially disabled from the part-time employment but able to return to the full-time employment, reconstruction of the work week as if the part-time employment were full time employment is improper. (Katsoris, 131 N.J. at 548).

In cases involving part-time employees with no full-time work, a judge of compensation must employ the principles of "fairness and equity" in determining if the circumstances warrant reconstruction of a part-time worker's wages. However, the Appeal court drew a distinction, as did prior cases, for part-time workers - concluding that reconstruction is appropriate when the "permanently disabling accident 'prevents or interferes with later full-time employment.'" (Citing Engelbretson v. AM. Stores, 49 N.J. Super. 19 (App. Div. 1957) aff'd, 26 N.J. 106 (1958).

Determining out the 'rate' at which compensation should be paid is often the central issue in claims involving part-time workers. If a worker makes $100 a week as a part-timer, the permanent disability rate (the rate at which permanent disability benefits is paid) would be $70 per week. For an award of 25% of the hand (at the 2010 rates) a part-time worker earning $100 per week is due an award of $4,285. A full-time worker, earning wages exceeding $290 per week, would be due a "full" statutory award of $12,585.

There are many instances where a judge of compensation is persuaded to "reconstruct" a part-time wage into a full-time wage. This results in a much-higher award (in our example, $4,285 versus $12,585). The Judge of Compensation can be persuaded to "reconstruct" wages to a full-time rate because the law allows for wages of a part-time employee may be reconstructed for purposes of fixing the rate for permanent partial disability in accordance with N.J.S.A. 34:15-37 based upon "diminished future earning capacity."

Case where wage reconstruction was rejected.

Another recent case which I've written about reached different conclusion regarding wage reconstruction. In Rose Gruzlovic v. Giovani's Trattoria, A-1519-08T1 (App. Div. Decided April 15, 2010), the appeals court reviewed the decision of a Judge of Compensation who had "reconstructed" part-time wages of a cafeteria worker, resulting in an increased award. In Gruzlovic, the claimant was a 76-year-old woman who worked nine hours per week, earning $10.50 per hour (average weekly wage of $94.50). During the thirteen years the claimant worked for the employer, she did not have or seek additional part-time employment. After the accident at work, the claimant no longer worked, stating simply, "I thought I had my share [of work]."

The Judge of Compensation awarded Gruzlovic 25% permanent partial total benefits, and "reconstructed" the rate so that the claimant received the "full" statutory award ($30,420).

The Appeals Court overturned this ruling, and ruled that the claimant was only due an award only on her part-time work - which would equate to 150 weeks of compensation payable at $66.15 per week, totaling $9,922.50.

In Gruzlovic, the Judge of compensation was reversed and the wage reconstruction was remanded for further proceedings. The Judge was asked to find out whether the accident and resulting residual disability "had any impact on Gruzlovic's capacity or inclination to work full-time as opposed to part-time. Based on the fact that the claimant had only worked one day per week for the thirteen years leading up to the accident, the Appellate Court stated 'there is no basis for an inference" that Guzlovic would have pursued other full- or part-time jobs "but for" her partial disability. The Appeals Panel further stated "When an inference of a loss of potential full-time employment attributable to the accident is not available from the evidence presented, principles of fairness and equity developed to compensate for that lost potential are not implicated and reconstruction of wages is not appropriate."

Applying Gruzlovic to Calle.

The Calle decision reveals a low threshold for the petitioner to prove a loss of future earning power - the claimant in Calle merely alleged that he was a day laborer working full time in other employments. The record does not reveal any wage information, pay stubs, or tax returns which were used to verify this claim. Nonetheless, the Appellate Division accepted the bald assertion of the injured worker that he sought full-time work in essentially unverifiable (and likely illegal) employments, and then relied on that low proof threshold to establish the petitioner's right to reconstructed wages.

Case: Calle v. DeJana Industries, A-0797-10T2 (App. Div. decided October 7, 2011).

Download the latest schedules of loss here.

New Jersey does not have a "fee schedule" for medical services provided to petitioners in workers' compensation cases, but because the employer controls care, the respondent is able to direct the claimant to medical care providers with whom contractual arrangements have established - usually to refer the provider's bills for third-party review and repricing. This helps the carrier/employer reduce costs.

In the past few years a huge number of "Medical Provider claims" have been filed in the Division of Workers' Compensation seeking additional payments for medical services provided to workers' compensation patients. Typically, the claim is for the difference between the billed amount of services and the amount paid (usually less than 50% of the original billing).

Initially there was confusion within the Division regarding how these cases were to be docketed and litigated. The Division now accomodates the filing of these claims through the use of a new claim form ("Medical Provider Application for Payment or Reimbursement of Medical Payment"). The Division also formed a Task Force on Medical Provider Claims" to address the new actions. The Task Force issued a memorandum in November 2010 which provided a 13-point "checklist" of factors that a workers' compensation judge should consider when deciding a Medical Provider Claim ("MPC") - but this list had the force of a "suggestion" rather than a rule or regulation (go to page 8-9 of the memo for the proposed list).

Practitioners representing carriers and self-insureds have suffered from limited guidance on how these claims were to be litigated - simply stated, there have been no reported decisions addressing the proofs and standards for these new claims. In litgating these matters, a form of brinksmanship has developed - in which the defense sought trial and asked to cross-examine the doctor seeking the fee - in order to force the doctor to come to court and presumably lose time that could be spent more profitably treating patients. In practice, these claims are usually compromised - with the parties agreeing to negotiate values and then entering a Section 20 agreement to close the case (pursuant to N.J.S.A. 34:15-20).

In a 77-page decision issued August 31, 2011, Administrative Supervisory Judge Virginia Dietrich (Middlesex County) ruled on a MPC case in which the claimant underwent extensive skin grafting surgery performed by two surgeons. The carrier (NJM) disputed the billing - specifically, that the surgeons submitted two bills for the same surgery - not as "co-surgoens" but rather seperately - as if one surgeon was not assisting the other.

Judge Dietrich ultimately ruled against the surgeons - findings that the carrier had applied the appropriate reductions after their review and audit of the billing.

While this decision is an agency decision, and therefore un-reported, this is the frst decision on this subject - and Judge Dietrich chaired the Division's Task Force on Medical Provider Claims - so we can expect the reasoning in this decision to influence the way these MPC claims are handled throughout New Jersey.

What's good in the decision for employers:

• Judge Dietrich had to decide what the "usual, customary, and reasonable" fees for the surgeries performed was. Judge Dietrich decided to rely on paid fees as appropriate as opposed to billed fees for services rendered.
• In finding what was the "usual, customary, and reasonable allowance" Judge Dietrich also found it was appropriate to look at all payments made to the medical providers rather those exclusively made by commercial carriers.
• Judge Dietrich also found that contractual carriers or government programs should be considered in determining what is customarily accepted by the provider.
• The Judge also suggested that the more payments that are considered, the better - stating "It is only by reviewing every payment that a determination can be made as to what an acceptable payment is.
• Judge Dietrich was reviewing bills relating to very specialized care - she found that

  "[t]he instant case is somewhat unusual because it deals with burn surgeryIn New Jersey there are very few practitioners. There are none in northern New Jersey to compare with. The fact is, however, that the Burn Surgeons do accept all manners of insurance coverage including self-pay, government programs, contractual payers and commercial carriers. It is possible then to compare what the petitioner deems acceptable from other payers.

  This is important for defense practititioners to keep in mind in cases where the petitioenr has been rendered specialized or emergent treatment.

What's bad:

• Judge Dietrich found that

  "In trying these cases it is helpful to have witnesses familiar with coding and billing processes. Dr. Marano was a necessary witness in this case as there was a question as to the work done in the surgery. In those cases in which the dispute is over payment only and not whether the procedures were completed or the manner in which the procedures were completed I find that it is unnecessary to have the doctor testify. The petitioner must produce a party responsible for the data and an expert who can interpret it if necessary."

  This is bad for employers because it means that the doctor who is seeking additional payments does not have to tactually come to court (and thereby lose time she could be spending treating and billing) but can send "a party responsible for the data and an expert to interpret it if necessary" to prosecute her claims.
  
  Case: Burn Surgeons of St. Barnabas v. Shop Rite, decided August 31, 2011. (Note: this is an agency decision and has no precedential value. Burn Surgeons of St. Barnabas has an abolute right of appeal in this case. I will continue to follow this case closely and report on any appellate developments.)

In New Jersey the employer has the right to direct and control medical care. However, there are limited circumstances where an employer can lose that right to control - specifically, when the employer has failed to provide "reasonable and necessary" curative treatment to a claimant. What usually happens is that an authorized treating provicder requests authorization to perform a specific treatment (such as surgery) and authorization is withheld or delayed, often for good reason.

Under such circumstances, the Rules of the Division of Workers’ Compensation allow an injured employee to file a "Motion for Temporary and Medical Benefits” (AKA, "Motion for Med & Temp") to compel the employer/respondent to provide specific medical treatment or temporary disability wage compensation which was denied.

The respondent has 21 days to file a responsive pleading (or 30 days, if the Motion for Med & Temp is filed at the same time as the Claim Petition). If the respondent wishes to present an IME report in opposition to the Motion for Med & Temp (which is usually the case), the doctor’s examination must be conducted within 30 days of the receipt of the filed motion and the report issued within 35 days.

Disputes about whether specific treatments are "necessary" often require testimony - essentially a "mini-trial" within the litigation. First the claimant testifies, and then the treating doctor (who is seeking to provide some specific treatment to the claimant) testifies, and then the employer's IME doctor testifies. Litigating a motion for Med & Temp can be more costly then just the litigation expense: if a petitioner prevails in their motion, claimant's counsel is due a fee (up to 20% of all the treatment provided pursuant to the motion). It goes without saying that the potential for an attorneys' fee often drives the filing of such motions.

Most of the time such disputes can be resolved informally between the parties. If not, a filed motion will be conferenced in chambers with the presiding judge. If the parties can reach an agreement as to the treatment course, a consent order can be issued resolving the matter.

Sometimes when an agreement can not be reached, the Judge or either party will recommend that a third doctors opinion be obtained - to act as an effective "tie-breaker."

Recent case: Dispute about the "tie-breaker's role."

In a recent case (decided July 27, 2011) the Appellate Panel looked at a very interesting issue: absent the clear consent of the parties to be bound to the opinion of the "tie-breaker", can a judge of compensation "appoint" a court-selected doctor to decide the medical issue?

In the new case, the judge of compensation selected and appointed a physician to perform a physical examination, review the relevant medical records, and provide an opinion as to whether a specific medical treatment (in this case, surgery) was necessary. In their subsequent appellate briefs one side stated that it was agreed by all counsel in chambers that, in light of the conflicting information regarding causation, the court-appointed physician would serve as the "tie-breaker," and that his opinion would be dispositive of the issue. The other side took a contrary position, contending that the court-appointed evaluation and report would be "non-binding."

In other words, on appeal, the parties disputed that they had consented to the appointment of the "tie breaker" doctor and disagreed over whether they were to be bound by the findings of the selected doctor.

The hearing transcript was silent: there was no mention by any counsel or the court of an off-the-record agreement as to the effect of the "tie-breakers's" evaluation and report.

The appellate panel ruled that the workers' compensation judge correctly exercised her discretion by basing her ruling on the report of her appointed "tie-breaker" in conjunction with other competent evidence in the record.

Practical Tips for counsel:

Resolving medical disputes in a cost-effective manner is always a goal - but in this case the appointment of the "tie-breaker" without a clear statement on the record as to the effect of that appointment - whether or not the parties would be bound by the opinion of the new physician - should not be allowed. If a consent order is entered, the employer's counsel should clearly mark the appointment of the new reviewing physician as "without prejudice" on the consent order itself to avoid ambiguity and preserve all defenses.

Case: Thompson v. Quality Et al., 2011 WL 3107767, Docket No. A-1177-10T1 (NJ App. Div.) decided July 27, 2011.

Cathleen Renner died of a pulmonary embolism on September 25, 2007.  Renner’s dependents filed a workers' compensation claim alleging that she literally “worked herself to death” by sitting in a chair at home and working on an assigned project from “the evening” of September 24, 2007 until sometime in the morning of September 25, 2007.  According to the claimant’s paid expert, Renner died of blood clots which formed by “sitting for an extended period of time.”  The case was actually reviewed by the Appellate Division twice: the first decision of the workers’ compensation judge - finding that the decedent had sustained a comepnsable injury and awarding benefits to the survivors based on a  “occupational injuries” theory of causation - was reversed by the appeals panel because the judge applied the wrong standard.  The Appellate court ruled that the claimants had to meet a higher burden of proof imposed by New Jersey’s Section 7.2, which applies in heart attack and cardiovascular cases (N.J.S.A. 34:15-7.2).
 
On remand, the law judge decided the case again -  this time finding that the claimant’s inactivity was a material cause of her pulmonary embolism and ascribing that injury and ultimately the death to the employment.
 
As the decedent was 47 years old and likely subject to the maximum rate in effect for statutory year 2007.  Her husband will be paid $1,317,049 should he live to his life expectancy. 
 
Under the New Jersey Workers’ Compensation Act there is a higher burden for a claimant to meet in cases involving cardiovascular injury (such as pulmonary embolism).  A claimant must show that that “the injury or death was produced by the work effort or strain involving a substantial condition, event or happening in excess of the wear and tear of the claimant's daily living and in reasonable medical probability caused in a material degree the cardiovascular or cerebral vascular injury or death resulting therefrom.”  See N.J.S.A. 34:15-7.2.  In plain English, the claimant has the burden to show, by a preponderance of the evidence, that the work effort which caused the condition was somehow more strenuous than the activities of daily living.  This is because the drafters of the statute envisioned that the “cardiovascular” events brought before the Division of Worker’s Compensation would be heart attacks and strokes - which can be brought on by stress and strain.
 
For some unponderable reason, the defense counsel in the Renner case conceded that the issue in that case was “whether Cathleen's lack of movement at work was more severe than her lack of movement in her daily living” -essentially, applying the “reverse” of the excess wear and tear factor required by the Act.  Why on earth did defense counsel agree to this? Under the Act, the burden was on the claimant to show that the work activity produced the condition.  Why did defense agree to a weaker position - having to prove that the claimant’s activities of daily living were more strenuous than her work activities?  Considering the fact that the subject of that inquiry - Cathleen Renner - was dead - how exactly was defense counsel intending on proving her activities of daily living?  Through the testimony of her dependents?  
 
Well, Renner’s  dependents certainly testified in the case, but given their own financial interest in the outcome, could not reasonably be expected to help the defense by volunteering information about Renner’s personal life.  In fact, Renner’s husband testified that in her personal life, his wife was “never sitting on the  couch with me.  She was always up and out, you know, running with the kids and taking them wherever they needed to be. . .  always running.  Always running.” 
 
The case is also amazing because there is a lack of verifiable (objective) proofs that the decedent was actually working for any of the time period she was allegedly immobile.
 
According to the facts as accepted by the workers’ compensation court, she “began working at home on the evening of September 24, 2007.”  No specific time is noted anywhere.  There is no statement as to what she was actually doing - Facebook?  Twitter? Farmville?  Work?   Instead, there is a reference to an email sent to a coworker at 12:26AM.  No discussion is provided as to what that email was about.
 
The next piece of information comes from the decedent’s son, who stated he woke at 7AM on September 25th, 2007 and saw his mother at her desk in her home office.  Her husband was not home to observe any of the alleged “work.”  The son did not testify that she worked through the night - only that she was at her desk in the morning.  There appears to have been no evidence of what actual work she was doing - no computer log files, documents, or network login information.  Even the decedent’s supervisor testified that she had plenty of work to do but did not confirm she was working overnight.  
 
The decedent next verifiable activity was to email a coworker at 9AM to state she was not feeling well.   Her final act was to email a document to someone at AT&T at 10:30AM.  Shortly after, she called for an ambulance and was taken to the hospital.  She succumbed to pulmonary embolism.
 
According to the National Heart Lung and Blood Institute(NHLBI) risk factors for pulmonary embolism include: prolonged immobility, obesity, and medications that affect blood clotting times, especially birth control pills.
 
Cathleen Renner was classified as “morbidly obese” at 300 pounds and on birth control medications at the time of death.  Both of these conditions are considered leading risk factors for developing a pulmonary embolism.
 
The Appellate Division affirmed  the opinion of the Judge of Compensation that Renner’s death was related to “prolonged inactivity” due to work and therefore compensable.  
 
The lack of evidence regarding work described in the opinion is disheartening.  The defense should have challenged the lack of a verifiable timeline and lack of documented proofs to show Renner was even working the alleged “overnight” marathon work session claimed.    
 
The fact that no one seems to have asked the simple question: what was it about the work that prevented the decedent from getting up every hour or so, and walking around for thirty seconds?  She certainly didn’t have a supervisor hovering over her shoulder, forcing her to sit perfectly still for hours on end.
 
This case is emblematic of the lengths courts will go to find questionable claims compensable. 
 
The defense in this case agreed to a “made up” legal standard to the case that shifted the burden of proof from the claimant to the employer.  This hurt the employer.  The Workers’ Compensation Act requires that in vascular cases the claimant must show a heightened exertion - something beyond the activity of daily living.  For some reason the employer agreed that if the claimant could show less exertion than daily living, the claimant should prevail.  That is ridiculous.
 
Next, the defense should have presented facts showing exactly what the decedent was doing for the unknown time period.  Server logs, network logins, and the decedent’s own computer should have been submitted into evidence.  The record as discussed in the Appellate decision is scant.  
 
Finally, the fact that the claimant was morbidly obese and on medication that affected the clotting characteristics of her blood - known risk factors for embolisms -  should have been used more effectively.  Instead, causation in this case turned on whether Cathleen's “lack of movement at work was more severe than her lack of movement in her daily living” which is an absurd standard not found in the Workers' Compensation Act.
 
The case is not appealable as of right to the New Jersey Supreme Court as there was no dissenting opinion.  The employer may seek to appeal, and if they do we will update you as to the outcome.

Case: James P. Renner v AT&T,  A-2393-10T (App. Div. Decided June 27, 2011).  Link to full decision.

Using surveillance video at trial in New York, New Jersey, and Longshore/DBA workers' compensation claims.

New York: Special surveillance video rules.

Under the New York Workers' Compensation Law, making false statements to obtain workers' compensation benefits is illegal and will result in the claim being thrown out (WCL § 114(a)) and the claimant referred for prosecution. The fraud defense will be based on two types of statements made by the claimant: (1) statements made inside a court room and (2) statements made to doctors in examining rooms.

In a recent case, a New York Appellate Court affirmed a disqualification from benefits where video surveillance of the claimant showed him going to and leaving a medical examiner's office with a leg brace and a cane AND A WALKER.  (Wait a second - - -a cane AND a walker?  How could he manage that with only two hands?!?)  While that portion of video showed a severely disabled victim, in later scenes the claimant was able to move his legs freely.  The video revealed that he was not not using a brace,  cane or walker, and showed that he actually had no impairment in his daily activities. 

The Board ruled that the claimant had violated WCL § 114(a) and was disqualified from workers' compensation benefits.  The appellate panel, on review, affirmed that disqualification.  (Case: Retz v. Surpass Chem. Co.,).

Practical note: New York has specific submission requirements for video - it must be in either ".avi" or ".wmv" and submitted to the WCB on a DVD-ROM.  In my experience, the submission will be noted as a "NS-OBJECT" in e-case ("Non-scannable object").  The video must be viewable in "Windows Media Player" or the WCB will reject the video.

Video in New Jersey: Getting the video into evidence.

Video surveillance is often relied upon by the defense in New Jersey  to either challenge credibility or to demonstrate that a claimant is not as disabled as he appears from his own testimony or his doctor’s examination.  Video does not have to be disclosed during the normal discovery process, even though adversary counsel may demand copies of videotape.  Under the current rules, video does not have to be revealed unless the respondent intends on using the video and only after the petitioner testifies.

One exception to this is where the respondent has shown the video to an examining or treating physician.  If the video has been shown to an attending or examining doctor prior to the petitioner's testimony, then it is discoverable by the petitioner prior to his testimony.

Practical Tip:  Ever since the decision of Gross v. Neptune the introduction of videotape evidence in contested workers’ compensation trials in New Jersey is limited by the disclosures on the Pre-Trial Memorandum. In Gross, the respondent did not disclose surveillance video on the Pre-Trial memorandum.  During the trial (after the claimant testified), the respondent obtained videotape surveillance of the petitioner.  The video evidence was not admissible due to the failure of the respondent to provide proper notice that the video was to be used.

Best practices:  Whether or not we have surveillance, we always put (on every "green sheet" Pre-Trial memorandum) that the "respondent reserves the right to obtain video surveillance of the claimant after the trial has started as per Gross v. Neptune.

Video in Longshore/DBA claims.

The Federal Rules of Civil Procedure require that surveillance evidence must be disclosed if it is to be used at trial. FRCP 26(b)(1).   However, video used as "impeachment evidence" - to challenge the credibility of the claimant - is not subject to discovery.  So, if you have great video on the claimant, but you only intend to use the video during cross-examination (and not send it to your evaluating doctor, for example), is it discoverable?

The Federal Rules (FRCP 26(a)(3)) clearly excludes from pretrial discovery material which will be used "solely for impeachment purposes;" the obvious rationale for excluding impeachment material from discovery is that their disclosure would substantially impair their impeachment value.  In Fee v. Calcasieu Paper Co., videos of a claimant were obtained by elaborate detective work which included inducing the disabled man to dig, to conceal cameras in fox holes and to surveil on his activities.  That video was deemed admissible by the judge. However, in a recent  case arising under the Jones Act, the Fifth Circuit has held that a surveillance videotape of an injured worker's daily activities constituted substantive evidence subject to disclosure pursuant to a discovery request.  The trial court's admission of the tape solely for impeachment purposes, when the evidence was in part substantive, constituted reversible error. Chiasson v. Zapata Gulf Marine Corp.

The decision whether to admit surveillance films and the weight to be accorded such evidence are matters within the discretion of the judge. 

Did I tell you the one about the petitioner in one of my New Jersey cases who was too disabled to work by day but was still fighting in the "squared circle" by night as a professional wrestler?

True story, it really happened.

We busted him with videos he posted himself to MySpace showing him engaged in title fights while out of work and collecting temporary total disability. His attorney argued that "wrestling is fake." Needless to say, that case got dismissed at trial.

Is using Facebook or MySpace to check claimant activity OK?

Claimants have no "reasonable expectation" of privacy for information posted to a social networking site like Facebook or MySpace and anything they publicly post there is fair game. A recent 75-page law review article concludes that "just as a workers‘ compensation attorney may use informal discovery to observe an employee in a public place, such as a park or a restaurant, so too is an attorney able to observe and search information publicly available online." Using Facebook or MySpace or any other social network to "check in' on claimants by viewing their publicly-posted photos, videos, or "wall posts" is A-OK, and any useful information you get can be presented in a workers' compensation court (or a fraud proceeding).

But what about "private" profiles?

Facebook accounts can have different settings regarding sharing. If a Facebook account has "low" security settings, the general public can access the individual‘s profile by searching the internet or by searching for the person‘s name on the Facebook website. Attorneys and others can discover the individual‘s list of friends, shared postings, photographs, and videos. If the claimant has set "high" security settings, attorneys may still be able to discover that the individual has a Facebook account, but will not be able to view the individual‘s profile or information. If the claimant has a "private" account, posted information (like videos, photos of the claimant, etc) that are not publicly available can be obtained through the formal discovery process.

How about subpoenas to site operators?

Subpoenas to social networking site operators have been allowed by the courts when the discovery sought is relevant to the lawsuit. Obtaining social networking information from the site operator, however, would likely be a very lengthy and costly process - probably not worth the cost and time. The fact that subpoenas can be served serves as a "check" on the employee‘s ability to destroy or hide social networking information in a workers‘ compensation case.

What if the claimant just deletes their profile when we make the request for information?

Deleting doesn't work - because the social networking site operators keep the information. The Facebook "terms of use" document states:
"If you want to stop using your account you may deactivate it or delete it. When you deactivate an account, no user will be able to see it, but it will not be deleted. We save your profile information (connections, photos, etc.) in case you later decide to reactivate your account."
In other words - the information isn't going anywhere even after they delete their "profile"!

How about "friending" the claimant to get access to their private posts?

This is where it gets interesting.
A lawyer printing out images that a claimant has posted themselves and made "public" on a social network is entirely permissible and the resulting images are admissible, just as a video of the claimant made in public would be.
A defense lawyer CANNOT friend a claimant - that would violate the ethical rule against communication with a represented party, unless the claimant (through her attorney) permits the activity (unlikely).
However, if the employer/insurer's INVESTIGATOR "friends" the claimant and obtains useful posts, and then provides these posts to the employer's attorney, no foul (but only if the investigator was not employed, retained, or associated with the defense attorney).

Do New Jersey workers' compensation courts permit "social networking" discovery?

New Jersey is on the leading edge of this issue. Recently a federal magistrate judge in New Jersey found writings shared on social networking sites to be discoverable. In Beye v. Horizon Blue Cross Blue Shield an insurer sought production of all e-mails, journals, diaries, and communications and the judge ordered the plaintiffs to produce all entries on web pages, such as Facebook and MySpace, which the plaintiffs had shared with others. There is precedent for workers‘ compensation courts to permit discovery of all entries on social networking sites that relate to an employee‘s physical abilities.

Best Practices for WC in NJ?

Workers‘ compensation defense attorneys should ask in their interrogatories, or other form of discovery demand pursuant to their state‘s rules governing discovery, for the names of any social networking sites used by the employee and request copies of all relevant photographs, videos, postings, communications, and discussions from social networking sites relating to the employee‘s physical or employment abilities.

However, in NJ, there are no depositions and interrogatories are allowed in certain cases only (occupationals). Therefore, if you suspect your New Jersey claimant may be leading a "double life," and in certain other high-exposure claims, a motion for specific discovery can be filed seeking the names of any social networking sites used by the employee.

But, are the information, videos, and photos we obtain admissible in workers' compensation court?

Workers‘ compensation judges generally have broad discretion and are not bound by state or federal rules of evidence, and therefore social networking evidence may be admitted even more liberally in workers‘ compensation courts than in state or federal court.

Recent New York Workers' Compensation case involving Facebook fraud.

On September 13, 2010, Alexis Muniz was sentenced to three years probation for stealing $8,975 in workers' compensation benefits. It turns out she was working full-time while collecting benefits - and was stupid enough to post about her "dual life" on Facebook - boasting about her income! Click here to see the whole story.

Have any questions about this article? Contact Greg Lois.

New York and New Jersey workers' compensation claims can turn on deadlines and handling. This month, we look at how two new cases showing how strict deadline compliance is necessary in New York to avoid draconian penalties; we also explore a very recent New Jersey decision on bad faith actions.

New Jersey: penalties for carrier's actions.

For failing to follow the order of a Judge or failure to provide benefits under the Act, the Judge of Compensation can:

• Impose costs and simple interest on any monies due.
• An additional money penalty up to 25 percent;
• Fine the parties or their attorneys up to $5,000 for unreasonable delay or continued noncompliance;
• Close proofs;
• Suppress defenses;
• Exclude evidence or witnesses;
• Allow a reasonable counsel fee to a prevailing party, where supported by an affidavit of services.

These penalties are bad enough, but the law also allows for a petitioner to seek civil damages for 'bad faith' actions of the employer, the compensation carrier, or its representative.

The general rule in New Jersey allows no direct action available to an injured employee against the employer, or against the employer's insurer when the insurer does what is required under the Workers' Compensation Act and the carrier's insurance policy. Under normal circumstances, injured employees must pursue their exclusive remedies in the Division of Workers' Compensation, even when an employer, acting through its insurer, does not furnish necessary medical treatment when requested to do so by an employee.

This 'general rule' is known as the exclusivity provision and it is enshrined in the New Jersey Workers' Compensation Act at N.J.S.A. 34:15-8.

We recently wrote about the Davis v. OneBeacon case, where a 'bad faith' action was permitted when an employer selected an authorized doctor and then refused to offer the treatment recommended by that doctor. In the wake of this decision it was clear that ‘bad faith’ civil claims are not limited to a situation where a party ignores a court order - a claimant was allowed to make a ‘bad faith’ civil claim when an insurer refused to authorize treatment recommended by their own selected doctor.

In a new decision (published February 1, 2011) the New Jersey Appellate Court reviewed an admitted case where the insurer paid $567,000 in medical and indemnity benefits to the claimant. Scattered medical bills remained outstanding, and the petitioner's attorney filed a motion to enforce the prior orders in the case and requiring the insurer to pay the outstanding bills. The Judge of Compensation ordered the carrier to pay the bills (enforcing his own prior order) and awarded the petititoner's attorney a $2,000 counsel fee. Petitioner's attorney demanded that the judge of compensation sanction and fine the workers' compensation insurer. The Judge of Compensation declined to do so.

Petitioner then brought a civil claim in Superior Court, alleging that he had suffered "pain and suffering" due to the workers' compensation carrier's wanton refusal to abide by the orders of the compensation judge and sought compensatory and punitive damages, plus costs, interest, and attorney's fees.

The Superior Court dismissed the complaint. The Superior Court Judge found that plaintiff was not precluded from returning to the compensation court to seek sanctions and penalties against the insurer, and, if a new Superior Court action is thereafter necessary for enforcement, such action would not be precluded. The Appellate Court agreed with this result, and affirmed the dismissal of the bad faith claim.

The petitioner now can return to the workers' compensation court and seek the maximum penalties against the insurer available under the New Jersey Administrative Code (N.J.A.C. 12:235-3.16). In addition to the penalties described above and upon a finding by the judge of contempt, the petitioner or the judge may file a motion with the Superior Court for contempt action.

New York: Defenses suppressed for late filing; Appellate Panels affirm.

There are many reasons to deny a workers' compensation case in New York (see my chapter on Defenses). Two recent cases demonstrate the danger of failing to file ALL the appropriate forms when you are denying a New York Workers' Compensation claim by filing a Notice of Controversy ("C-7").

When a C-7 is filed, controverting a case for lack of notice, lack of employment, wrong carrier, or other jurisdictional or substantive reasons, the case will be set down for an expedited hearing within 30 days. The Act also requires that a "Pre-Hearing Conference Statement" (PH-16.2) must be filed 10 days before the Expeditied hearing. See 12 NYCRR 300.38(f)(4).

In many cases, the carrier files a C-7 after initial investigation reveals that the claimant did not work for the company, or where either notice or the accident itself is in dispute. Our recommendation: file a Pre Hearing Conference statement at the same time - to avoid the potential for failing to file the Statement (Form PH-16.2) within the 10 days. There is just too much that can go wrong - late notice of the hearing date, no notice at all, etc! If you have enough information to justify a denial, go ahead and file the PH-16.2 at the same time.

Better, have your outside counsel handle the process! It seems that common practice is to have the carrier file a C-7, then refer the claim to outside counsel. This introduces delay and a possible dropped deadline into a time-sensitive process.

Two recent cases (both decided in March 3, 2011) show what can happen when the Pre-hearing Statement is not timely filed the carrier/employer loses the right to assert defenses!

In Smith v Albany County Sheriff’s Dep't, the Appellate Division ruled that because the the carrier submitted an untimely prehearing conference statement the employer waived all defenses to the claim and, upon review of claimant’s medical records, established an occupational injury. In a similar case (Quagliata v Starbucks Coffee) also decided the same day, the Appellate Panel ruled that stripping the carrier of its defenses for failing to file the Pre Hearing Conference Statement on time was "not unreasonable, arbitrary, capricious or contrary to the statute under which it [is] promulgated."

Best practices: be wary of the requirement that the Pre-Hearing Conference Statement be filed ten days prior to the expedited hearing - implement a plan to make sure this is done timely or risk a suppression of defenses!

Have any questions about this article? Contact Greg Lois.

Valentine's day - when love and bullets are in the air.  In honor of this upcoming celebration of love, let's explore the risk implications when love goes horribly, horribly wrong . . . using actual New York and New Jersey workers' compensation cases!

In New Jersey, Mary Ann Marky made the mistake of breaking up with boyfriend Lou Rosa just before Valentine's Day.  Though they had only been dating a year, Lou was madly possessive of Mary Ann.  Lou just wouldn't take a hint, and continued to attempt to woo Mary Ann - by calling her and showing up unannounced at her home. 

Lou also accused Mary Ann of taking up with another man - John Brinker, one of Mary Ann's furniture store co-workers.  This "aggressive wooing" quickly turned into serious stalking, and after one 'surprise visit' Mary Ann resorted to calling the police, who arrested Lou for criminal trespass and carrying a concealed weapon.

Five days after his stalking arrest, Lou stopped a police officer to ask directions.  When the officer responded, Lou produced a knife which he held to the throat of the policeman.  Lou grabbed the officer's pistol and forced him into the trunk of his car.
Read More...

The 2011 schedule of disabilities is available here. (Caution: links to PDF).

Claimant Gerard McGlinsey worked from 1974 to 2001 as a press operator in Pennsylvania. In 1999 he complained to his employer about physical problems he was having, related to the job. The employer told him to file a workers' compensation claim (in Pennsylvania) and pursue treatment. The claimant didn't file anything and kept working as a pressman.
The claimant then worked from 2001-2002 as a pressman in New Jersey, essentially performing the same job. Following this employment, the claimant brought an occupational claim for workers' compensation benefits in New Jersey. The employer filed a motion to dismiss based on a lack of subject matter jurisdiction - stating that the claim should have been brought in Pennsylvania (the claimant called this motion a 'stealth' motion for summary judgment).
During the trial it was established that most of the claimant's work experience was in Pennsylvania, and that only 5% of his work life occurred in New Jersey.
Which state has jurisdiction, Pennsylvania or New Jersey?
The New Jersey Appellate Division just affirmed the decision of New Jersey Workers' Compensation Judge Jose LaBoy. Read More...

The 54 year-old worker in this case was employed in a brick factory. He described his factory job as "not stressful" and enjoyable. Sometimes, when a machine would break, the workers would have to work overtime doing manual jobs to keep production going.
On March 11, 2006 the employee had to work overtime. He did strenuous work in a hot environment. While working, he complained to a co-worker of feeling unwell. At the suggestion of the co-worker, the claimant went home early.
The next day the claimant went to the emergency room and was diagnosed as having had a heart attack. A cardiac cauterization was ordered, and the employee died 11 days later.
The claimant's widow filed a dependency claim petition, alleging that his death resulted from the strenuous condition and the heart attack. Both sides selected experts. Claimant's expert (Dr. Malcolm Hermele) opined that the heart attack occurred on the day the claimant worked overtime, ad the work effort materially contributed to the attack.
Respondent's expert opined that the claimant had a long standing unstable angina. According to the employer's expert, unstable angina is characterized by chest pain that develops with activity and subsides with rest.
After hearing the testimony of both doctors, the Judge of Compensation found that the work effort caused the cardiac event. Although the employer's expert testify that the claimant had unstable angina and that the heart attack would have occurred even if the employee had not worked overtime, the Judge found that the heavy labor occasioned by the overtime work materially contributed to the heart attack.
This case demonstrates that where your defense expert opines the 'cardiac event would have curried anyway' that is not enough to prevail when the claimant can show (1) increased work effort and (2) that the cardiac event occurred while working.
Case: Carol Reading v. Glen Gery Shale and Brick Company, A-1525-09T3 (N.J. App. Div. Decided Oct. 22, 2010). Note: I couldn't find a link to the final decision online - just the Appellate Division's notice the decision was issued. Contact me to request a copy of the decision.

36 year-old Thomas McKeever was employed by J.C. Penney as a security guard. On his day off, McKeever happened to be walking through a different J.C. Penney (not the one he worked in) when he observed a customer acting suspiciously. The claimant started following the customer.
Eventually the customer saw the claimant following him and fled the store. The claimant chased after him, breaking into a run. After running about 50 yards, the claimant was out of breath and seeing stars so he broke off the pursuit.
After doing some personal banking, the claimant returned to the store and complained about being out of breath. An ambulance was called, the claimant was taken to the emergency room. He was released without a diagnosis.
Two days later the claimant returned to the hospital and was diagnosed as having had an acute stroke or strokes. The claimant now alleges he has no sensation on the right side of his body,has problems remebering things, and needs a cane to walk. He filed a New Jersey claim petition alleging that the 50-yard pursuit of the possible shoplifter through a J.C. Penney store (but not the store he actually worked in) on his day off caused him to have a compensable cardiovascular event.
The issue before the workers' compensation court was whether the petitioner met his bred of proof under the New Jersey Workers' Compensation Act. The law requires that any claim for cardiovascular event (heart attack, angina attack, stroke, etc) must be proven by a showing that the precipitating event that allegedly caused the cardiac incident was the result of a strain in excess of the wear and tear of the activities of daily living. This effectively shifts the burden of proof to the claimant to make a prima facie showing - and in this case, the expert doctors each had an opinion as to whether the running event caused the stroke two days later.
The expert doctors hired by each side gave predictably conflicting opinions at the trial. The Judge of Compensation found that the claimant's expert was not as credible as the employer's expert, and the case was dismissed.
On appeal, the reviewing court found that the Judge of Compensation's reliance on the defense expert was well-placed as the employer's expert was better qualified. The employer's doctors was a board-certified neurologist while the claimant's expert was a psychiatrist.
Of note: an interesting aside in this case was that the respondent;s expert came up with a new alternate theory of causation on the eve of trial - but the Judge of Compensation refused to allow the expert to testify about the new theory because the defense expert had not provided a supplemental report to claimant's counsel prior to trial. On the stand the defense expert did not testify about his new theory of causation. However, claimant's counsel "opened the door" into this alternate theory of causation by asking the employer's expert to explain "how the stroke occurred." In response, the employer's expert testified based on his new alternate theory. The Judge of Compensation was able to rely upon this previously-barred testimony!
The Take-away: Never ask an opposing expert to explain their opinion - it opens the door for the opposing expert to expand upon their earlier opinions and maybe introduce a new theory of causation for you to combat at trial!
Case: Thomas McKeever v. J.C. Penney, A-0992-09T1 (N.J. App. Div. Decided Oct. 18, 2010). Unpublished.

New Jersey's maximum temporary disability rate dropped for 2011 to $792 per week. That means that any worker making more than $1,131 per week (gross) is capped at this maximum temporary disability wage compensation.
This is a drop of two dollars ($2) from last year's maximum rate ($794).
Despite this drop, New Jersey's Compensation Rating and Inspection Bureau (NJ CRIB) announced a 1% rate hike. CRIB blames the 1% increase in rate on rising medical costs as a component of workers' compensation premiums.

I am pleased to report that the fully revised and updated 2011 editions of my New York Book and the New Jersey Book (co-authored with Joseph K. Cobuzio) are at the publisher. I am reviewing proof copies now. I expect the final publications to be ready for clients by the end of October. As in the past, both books will be available to clients for free and the New York book will be offered on Amazon.

In a long and complicated decision involving issues of claim removal, diversity citizenship of insurance companies, and limitations of actions, a Federal District Court found that a workers' compensation carrier (OneBeacon) could be liable in a civil action to a claimant whose benefits (surgery) was denied. In this article we will ignore most of the legal wrangling and focus on the dangerous precedent set in Davis v. OneBeacon - that a valid cause of action existed directly against an insurance company for the delay in treatment provided to an injured worker.

The case arose on a complicated set of facts. For the purposes of this article, we focus on the facts in the workers' compensation case that led to the ruling finding that an injured worker could proceed in civil court to recover damages against a workers' compensation carrier for delays in treatment.

The general rule in New Jersey allows no direct action available to an injured employee against the employer, or against the employer's insurer when the insurer does what is required under the Workers' Compensation Act and the carrier's insurance policy. Under normal circumstances, injured employees must pursue their exclusive remedies in the Division of Workers' Compensation, even when an employer, acting through its insurer, does not furnish necessary medical treatment when requested to do so by an employee.

This 'general rule' is known as the exclusivity provision and it is enshrined in the New Jersey Workers' Compensation Act at N.J.S.A. 34:15-8.

Here are the facts: On August 11, 2000, Frank Davis, Sr., suffered a serious injury to, among other things, his left shoulder while working for his employer, South Jersey Overhead Door Company (“Overhead Door”), in Vineland, New Jersey. As a result of the accident, Davis filed a claim petition in the New Jersey Division of Workers' Compensation. OneBeacon, identified in Davis's complaint as the workers' compensation insurance carrier for Overhead Door, selected and appointed Dr. Robert Dalsey, an orthopedic surgeon, to serve as the authorized treating physician to care for and treat Davis.

On March 16, 2005, Dr. Dalsey evaluated Davis and recommended an MRI exam of his left shoulder. About a week later, avers Davis, “The Honorable Robert F. Butler, Judge of Compensation, entered an Order Approving Settlement of Plaintiff['s] ... claim for permanent disability benefits arising out of the August 11, 2000 accident, awarding 40% permanent partial total disability including, inter alia, 2.5 % permanent partial total disability stemming from tendinopathy and impingement syndrome of the left shoulder.”

On March 15, 2006, Dr. Dalsey recommended that Davis undergo surgery for his left shoulder as a result of the August 2000 accident. Despite being advised of Dr. Dalsey's recommendation and several requests made by Davis, OneBeacon refused to authorize the surgery. Consequently, on September 20, 2006, Davis filed a Motion for Temporary Disability and Medical Benefits with the Division of Workers' Compensation (or, “the Division”), seeking to compel the treatment recommended by Dr. Dalsey along with temporary benefits.

The Workers’ Compensation Ruling: On April 18, 2007, Judge Butler rendered his decision, finding that OneBeacon was obligated to authorize the shoulder surgery as recommended by Dr. Dalsey, its authorized treating physician, and that OneBeacon's refusal to authorize the surgery violated Section 15 of the Workers' Compensation Act (or, “the Act”), N.J.S.A. 34:15-1 et seq. , and was unconscionable. In reaching its conclusion that OneBeacon's violation of the Act was unconscionable, the Judge explained that OneBeacon's denial of surgery was not predicated on any sound medical basis, was made with disregard to the seriousness of Davis's injury and the possible consequences he could suffer due to a delay in treatment, and defied the recommendations of OneBeacon's own authorized physician.
Further, Workers' Compensation Judge Butler suggested that, apart from the Act, Davis could pursue a civil remedy for his pain and suffering in another court.

Judge Butler wrote in his opinion:

"The additional and prolonged pain and obvious mental anguish of the Petitioner that has been caused by the appalling and unconscionable conduct of OneBeacon are neither cognizable nor compensable based upon the provisions of the Workers' Compensation Act. Only the nature and extent of the Petitioner's permanent disability following his recuperation from surgery is compensable in this court.
. . .
As regrettable as that may be, the Petitioner is not left without a possible source of redress against OneBeacon for his pain and suffering. The Court suggests that Petitioner's counsel direct his attention to the case of Rothfuss versus Bakers Mutual Insurance Company of New York, 107 N.J.Super. 189, 257 A.2d 733 (1969)."

In apparent response to the Judge's opinion, Davis filed a two-count complaint in the Superior Court of New Jersey on April 13, 2009. In the first count, Davis alleges that OneBeacon's egregious refusal to authorize necessary medical treatment has caused him “injuries that are not compensable under the Workers' Compensation Act, including but not limited to, pain and suffering, deterioration, worsening, wasting, inability to return to work sooner, prolonged pain and mental anguish and severe emotional distress.” Further, in the second count, Davis's wife, Carolyn, asserts a claim for loss of consortium. Together, Davis and his wife sought compensatory and punitive damages, among other expenses.

On August 17, 2009, defendant removed Davis's suit to Federal Court.

The Federal Court ruled that an employee has a limited right to maintain a common-law cause of action against an employer's insurance carrier for willful failure to provide medical benefits in a circumstance where it ‘voluntarily undertook to examine and treat an injured employee by its own doctor ....‘ In particular, the court in Rothfuss, the panel clarified, “found that when the carrier failed to provide medical benefits that its own physician had deemed necessary, it opened the door to a common-law cause of action.”
Under New Jersey law, an employee can state a common law cause of action against an employer's workers' compensation carrier, which was not categorically precluded by the Workers' Compensation Act, by alleging that carrier frivolously, negligently, willfully, wantonly and maliciously failed or refused to authorize the surgery recommended by its own authorized treating physician.

Keep this new decision (decided June 28, 2010) in mind when making treatment decisions!

In the wake of this decision it is clear that ‘bad faith’ civil claims are not limited to a situation where a party ignores a court order - a claimant can make a ‘bad faith’ civil claim anytime an employer selects an authorized doctor and then refuses to offer treatment recommended by that doctor.

Case: Davis v. OneBeacon Insurance, --- F.Supp.2d ----, 2010 WL 2629053 (D.N.J.), decided June 28, 2010).

Suzanne Huntoon began working as a clerk-typist for a police department in 1994. In 1998 she began experiencing tingling and numbness in her right hand. In July of 1998 her primary care physician told her that the condition was "probably work related because of the typing her job required."

In 2001 Huntoon saw a new family doctor, still complaining of pain and numbness in her right hand. The new doctor diagnosed her as suffering from "right carpal tunnel syndrome" and prescribed a wrist brace.

In 2003 Hunoon returned to her doctor, complaining about pain an dumbness in the right hand that would not go away. Once again, she was diagnosed with "carpal tunnel syndrome right keyboard use." Huntoon was referred to a hand surgeon, although she did not make an appointment or follow up on the referral.

On two more occasions Huntoon sought care for her right wrist - again in 2003 and in 2004. She underwent an EMG/Nerve Conduction Velocity test which confirmed a 'severe degree' of carpal tunnel syndrome in the right hand.

In 2007 Huntoon filed a claim petition alleging that she sustained injuries arising from an occupational exposure ("repetitive motion"). The employer filed an answering pleading denying the compensability of the hand injuries.

Trial began in March 2009. During her testimony, the claimant recounted her treatment course (essentially as described above). After trial, the judge of compensation dismissed Huntoon's case - citing the law that requires an employee to file claims for work-related injuries within two years of learning of the condition's relationship to employment. This 'two year' time limit for filing claims is referred to as the 'Statute of Limitations.'

N.J.S.A. 34:15-34 requires that “where a claimant knew the nature of the disability and its relation to the employment” all claims for compensation for compensable occupational disease must be filed within two years after that date.

When an employee suffers and accident but neglects to file a claim petition within the two years, his claim is barred by the statute of limitations.

In the Huntoon case, the judge of compensation found that at the very latest, the claimant knew she had work-related carpal tunnel in 2004, when she underwent testing (EMG/NCS) for the condition.

The claimant appealed the dismissal ruling. On July 28, 2010 the reviewing court (New Jersey Appellate Court) affirmed the dismissal.

This is a great case for the defense! The Appellate Judges rejected the petitioner's argument that the Statute of Limitations did not start running until the date of her last exposure.

The Huntoon case demonstrates the value of a thorough investigation into the prior medical history of the claimant. By obtaining the claimant's lengthy prior medical history, which included the nine-year-old diagnoses of carpal tunnel, the employer was able to show the court that the claimant was well-aware of her allegedly-occupational condition long before she claimed it was work related.

Case: Huntoon v. Borough of Clementon, A-956-09T3 (App. Div. decided July 28, 2010).

The impact of the Medicare Secondary Payer Act on civil and workers’ compensation litigation is growing. In the next few years we expect that CMS’s enforcement activities will increase. On May 24, 2010, the New Jersey Appellate Court decided a case (Jackson v. Hudson Court) that we believe is the first case in New Jersey focusing on the MSP and a civil claim. In Jackson, the plaintiff sought to have the trial court issue an order allocating the proceeds of her settlement to discharge a Medicare lien. The Court refused to do so - forcing the payee to consider Medicare’s interest in her settlement.

This article (caution - very long!) is a comprehensive guide to handling claims (workers' comepnsation claims and liability matters) in which medicare may have an interest. Read on for my review of this important topic, with flow-charts illustarting the decisions facing the employer/defendant in personal injury/workers' compensation claims. Read More...

1. When must Medicare’s interest be considered?
Medicare’s interest must always be considered whenever:
(A) Medicare has paid for treatment for a disability/injury alleged in the claim petition; and/or
(B) In the closure of a workers’ compensation case the petitioner is Medicare entitled and future medicals for a disability/injury maintained in the claim petition are being foreclosed.

2. When is a petitioner considered “Medicare entitled”?
A petitioner is Medicare entitled if he or she is:
65 years or older (assuming sufficient work quarters); or
On Social Security Disability (SSD) for 24 months or longer; or
Suffering from End Stage Renal Disease (ESRD).

3. Is repaying Medicare for conditional payments (or obtaining a waiver) always required when the petitioner has received Medicare benefits?
Yes. CMS recommends that the process outlined under Question 4 of this memo be initiated as soon as possible for petitioners who have received Medicare benefits. To ensure that a record of any Medicare benefits be established, this process must be initiated in all cases when the petitioner is a Medicare beneficiary. One should also keep in mind that repaying CMS for past /conditional payments Medicare made on behalf of the petitioner is required even when no set-aside allocation review is required. Therefore, pleadings become very important in determining the extent to which past/conditional Medicare payment issues may play a role in resolving a claim. Plaintiffs/Petitioners who allege work injuries or disabilities that clearly cannot be sustained may be subjecting their cases to more extensive CMS/Medicare review and delay for alleged injuries or disabilities that will be found “non-compensable” later in the proceedings. In summary, adequate consideration must be given to the issue of conditional payments in all cases involving a Medicare beneficiary at the time of settlement. This includes cases resolved by Orders Approving Settlement, Section 20 Settlements, Judgments, and Second Injury Fund Awards. As long as the petitioner is a Medicare beneficiary, this issue must be addressed.

In the recently decided cases Rosa Maria Borbon v. Fantasia Industries, the plaintiff alleged a personal injure cause of action against her employer and the landlord. Plaintiff Borbon alleged that the parking lot was 'negligently maintained' which led to her slip-and-fall type accident.

In a case of importance for all employers, were her injuries found compensable, and thus, did the employer have the benefit of the 'workers' compensation bar'? Read More...

A recent case re-examined the rules regarding reconstructing wages. In Rose Gruzlovic v. Giovani's Trattoria, A-1519-08T1 (App. Div. Decided April 15, 2010), the appeals court reviewed the decision of a Judge of Compensation who had 'reconstructed' part-time wages of a cafeteria worker, resulting in an increased award. In Gruzlovic, the claimant was a 76-year-old woman who worked nine hours per week, earning $10.50 per hour (average weekly wage of $94.50). During the thirteen years the claimant worked for the employer, she did not have or seek additional part-time employment. After the accident at work, the claimant no longer worked, stating simply, "I thought I had my share [of work]."
The Judge of Compensation awarded Gruzlovic 25% permanent partial total benefits, and 'reconstructed' the rate so that the claimant received the 'full' statutory award ($30,420).

Was this correct? Read More...

The employer appealed an award of $100,000 for temporary disability benefits paid to a claimant with an injured "pinkie toe." 

Hector Mercado sustained a fractured left fifth metatarsal on March 12, 1999 when a pipe fell on his foot.  The employer referred to the injury as a 'pinkie toe' fracture - in truth the metatarsal bones are five long bones comprising the foot - located between the tarsus and the phalanges (toes). 

On April 19, 2010 the New Jersey Appellate Court upheld the $100,000 award. Why? Read More...

Claimant Gerald Catalano was injured at work delivering packages for UPS in Staten Island, New York. But he filed a claim for workers' compensation benefits in New Jersey, telling the Judge that "it would be to his benefit to seek compensation under New Jersey's jurisdiction rather than New York as he would be entitled to a permanent disability award and a higher weekly benefit." UPS asserted a defense of 'lack of jurisdiction' and moved to dismiss the claim petition.

How is jurisdiction established in New Jersey Workers’ Compensation Courts? The Courts look at the following factors:
1. Residence of the petitioner. This is simple: does the claimant reside in New Jersey? Even if the injured worker was injured in another state, and the contract of hire stated that another state’s workers’ compensation law would be applied, a resident of New Jersey can claim New Jersey jurisdiction based upon residence. In Parks v. Johnson Motor Lines, 156 N.J. Super. 177 (App. Div. 1978), the appellate panel found that the New Jersey residence of an injured worker and the fact that a substantial part of his employment was carried out in New Jersey was sufficient for New Jersey jurisdiction even though the accident occurred in Pennsylvania and the contract of employment provided that North Carolina’s law would govern.
Residence alone, without the presence of the other factors, is not likely sufficient to create jurisdiction in New Jersey.

2. Respondent’s location. Is the respondent located in New Jersey? If not, the Court will consider ‘significant contacts’ with New Jersey, such as selling products here, soliciting business in New Jersey, or advertising in New Jersey.

3. Place of Hire. A contract of hire made in New Jersey, by itself, is not enough to create jurisdiction in New Jersey workers’ compensation courts.

4. Location of Accident. If the accident which injured the employee took place in New Jersey, while the petitioner was in the course and scope of her employment, then jurisdiction in New Jersey Workers’ Compensation Court is created.

5. Place where the contract of hire was made; and

6. Place where workers' compensation jurisdiction was established by agreement between the parties. Williams v. Port Authority, 175 N.J. 82, 87-88 (2003).

In Catalano the petitioner admitted that he lived in Staten Island, worked out of the Staten Island UPS terminal, and that he was delivering in Staten Island when the injuries occurred. However, the claimant argued that he was a member of a Teamster's local based in New Jersey and the name of the business unit he reported to was the 'Central Jersey Division.' The claimant also stated that he took his initial employment physical at UPS's Edison, New Jersey plant (ten years earlier) and drove as a 'probationary employee' for two weeks in New Jersey at the start of his employment (also ten years before the accident).

The Workers' Compensation Judge ruled that Catalano could not establish jurisdiction for his claim in New Jersey court. The ruling was found that the employment took place in New York, as did the residence of the claimant and the place of injury. The claimant’s minor contact within New Jersey were not enough to establish jurisdiction in NJ WC Court.

Case: Catalano v. UPS, N.J. App Div. 39-2-7061 (Decided March 9, 2010).

A new case shows just how far the New Jersey Courts will go to construe ‘questionable’ injuries as compensable under the Workers’ Compensation Act.

A truck driver was injured at home while doing some routine maintenance on his work truck. He claimed that his injuries were compensable because his hauling services agreement with his employer required him to "maintain" his tractor trailer at his own expense. The employer denied the claim, stating that the injuries did not arise out of the 'scope' of employment.
The driver, Guillermo Chaverri, entered into an exclusive written agreement with Cace Trucking to provide hauling services. Under the contract, the claimant was required to "maintain, register, and insure" his tractor trailer at his own expense. The Agreement also contained a provision requiring the claimant to maintain the tractor in "good and safe condition and in compliance with the relations of all applicable public authorities."

The incident occurred on a weekend day. The petitioner claimed that he injured is right eye while working on his tractor trailer at his home. The claimant alleged that his vision was impaired and that he developed a psychiatric disability. There were no witnesses to the incident.

The Judge of Compensation ruled that Chaverri was an employee of cace, finding that Cace "had total control of the workday, told petitioner exactly what to do all day, and petitioner was precluded from working for anyone else during the time period he worked for Cace." However, the Judge of Compensation found that the eye injury feel outside the scope of employment - finding it significant that the claimant was not on duty at all times, could use the tractor trailer for his own purposes, and was not "in the business of maintaining vehicles." Further, the Judge found that nothing in the agreement between Cace and the claimant required the petitioner to do his own repairs.

The Appellate Division reversed, stating that "Courts have held that certain injuries sustained by an employee while performing a necessary aspect of the job, even if not performed during normal working hours and not on the employer's premise, may be compensable." The Appellate Curt ruled that at the time of the injury, the claimant was "engaged in the direct performance of his duties assigned" under the employment agreement. The case was remanded to the workers' compensation court for further proceedings (most likely a settlement or award for permanent disability).
Case: Chaverri v. Cace Trucking Inc., App. Div. 39-2-7290 (Decided March 26, 2010).

A recent case, decided March 1, 2010, explores what 'good cause' means in the context of 'reinstating' a dismissed New jersey Workers' compensation case. Claims can be dismissed under N.J.S.A. 34:15-54 ('Section 54') for a variety of reasons, ranging from a claimant's failure to provide discovery, for failing to abide by a prior order of Court, or for lack of prosecution. Section 54 also provides that a dismissed case can be restored "within one year" and if the claimant shows "good cause" for reinstatement.

The Compensation Judge in Metrick v. United Parcel Service, A-4132-08T1 (App. Div. Decided March 1, 2010), denied the motion for the claimant to restore the dismissed claimant to the active trial list. According to the compensation judge, the claimant failed to show 'good cause' as to why the claim should be reinstated. The Appellate Division upheld the reinstatement. Read More...

When a claimant gets workers' compensation benefits and makes a recovery in a civil suit, the workers' compensation carrier is due a credit (or reimbursement) for up to 2/3rds of the moneys it paid in WC benefits. This right to reimbursement is set forth in the New Jersey Workers' Compensation Act at N.J.S.A. 34:15-40 ('Section 40'). Read More...

A new case (decided February 18, 2010) addresses one of the most common disputes in New Jersey Workers' compensation cases:s calculating wages for part-time or seasonal employees. Settling the 'average weekly wage' for a claimant is an important first step in calculating overall exposure, because for low-wage earner (usually part-time employees) the final award for permanency, and the amount that is paid for temporary total disability, will be based on the actual average weekly wage earned. The rate of compensation may not exceed 70% of petitioner's wages at the time of the occurrence of the accident subject to the maximum and minimum rate ($35.00 for partial permanent disability) in the year in which the accident occurred. Read More...

Appeals of decisions in New Jersey Workers' Compensation cases are made directly to the Appellate Division. The 'scope of review' by the appellate Division is "the same as that on appeal in any non-jury case, that is, whether the findings made could reasonably have been reached on sufficient credible eveidnece present in the record, considering 'the proofs as a whole,' with due regard to the opportunity of the one who heard the witnesses to judge of their credibility." Close v. Kordulak Bros., 44 N.J. 589, 599 (1965), quoting State v. Johnson, 42 N.J. 146, 162 (1964). Thus, the findings of fcact made by a judge of compensation "are entitled to substantial deference." Ramos v. M & F Fashions, Inc., 154 N.J. 583, 294 (1998).

But how does the appeals Court review cases where there was a significant split - a disagreement - between the doctors who testified in the workers' compensation case? How does the Appellate Divison review a case where the Comp Judge agrees with one side's doctors over the other? Read More...

According to statistics provided by the NJ Division of Workers' Compensation, nearly 30% of all case closures in the average year are dismissals. This does not mean that those cases are closed forever - the claimant has a right to 'restore' a dismissed case when the case is closed for lack of prosecution. A new case explores the discretion a workers' comp judge has in restoring a case when the claiamnt did not move to restore it within the 'one year' time period to get the case back on the active hearing list. Read More...

Each year Lexis-Nexis, one of the biggest legal publishers, creates a list of "Top 10" most bizarre cases. This year, They named Sexton v. County of Cumberland to the list. In Sexton, the New Jersey Appellate Division reversed the ruling of a workers' compensation judge and held that the alleged aggravation of claimant's pre-existing COPD caused by inhaling perfume sprayed into the air by a co-worker "arose out of and int he course of" employment and was compensable. Read More...

Despite the recession, WC claims filed in New Jersey have been surprisingly steady. So why is New Jersey getting eight new comp judges, most of whom have never stepped foot in WC court?
New Jersey’s manufacturing, construction, farm, and trade employment has shrunk every year for the past two decades. The drop in claim petitions filed has followed this trend over the past two decades: from 53,637 new claim petitions filed in 1990 to only 35,566 new formal claim petitions filed in 2007.
Despite the worsening recession, 2009 saw about 35,000 new claims filed - which is in line with 2008’s filings. The gross number of filed claim petitions is likely to fall in 2009-2010, but this is more likely indicative of the general trend of job loss in high-risk industries like manufacturing and construction.
The big question is - with the population of new claims slowly but steadily declining year over year - and with that decline projected to continue, why did outgoing Governor Corzine appoint eight new WC judges?

The answer is: Politics as usual. Read More...

In a recent published decision, the New Jersey Appellate Division just published a decision finding that injuries arising from an employee's five-mile off-premises trip to run a personal errand - buy a cup of coffee - was compensable. The Court ruled that accidents "occurring during coffee breaks for off-site employees, which are equivalent to those of on-site workers, are minor deviations from employment which permit full recovery of workers' compensation benefits."
This is an extremely liberal interpretation of the ‘coming and going’ rule in New Jersey.
The Statute which controls when and where and injury is compensable states: “employment [starts] when an employee arrives at the employer's place of employment to report for work and [ends] when the employee leaves the employer's place of employment, excluding areas not under the control of the employer; [unless] the employee is required by the employer to be away from the employer's place of employment, [in which case] the employee [is] deemed to be in the course of employment when engaged in the direct performance of duties assigned or directed by the employer.” (See N.J.S.A. 34:15-36.) The Act provides exceptions for
paid travel time;
employees using an employer-authorized vehicle; and
travel by emergency personnel (fire, police) traveling to an emergency.
Generally, off-premises travel to and from work is not compensable, UNLESS the employer provides the transportation.
Further, injuries that occur during on-site lunch breaks and coffee breaks are generally found compensable by the New Jersey courts.
In this new case (Cooper v. Barnickel Enterprises Inc., App. Div. Decided Jan 14, 2010) the Court took note of the fact that the claimant was working on a ‘remote’ job site in a “rural area.” Therefore, the claimant’s was entitled to travel a “reasonable distance” from the place at which the off-site employee was waiting to attend his work-related meeting and the coffee break was equivalent to that of an on-site employee.

New for 2010 we are publishing just one newsletter that will cover New York and New Jersey workers' comp. Check out the new format here.

An employee can not sue his employer in civil court for bodily injuries - he can only collect workers' comp benefits. While this exposes employers to the costs associated with medical treatment, temporary disability wage compensation benefits, and permanency benefits, this is far less expense then if employees were able to collect money judgments in civil court for their injuries (well, that is the theory justifying our compulsory system of workers' compensation, anyway).

What this means is that in many situations, particularly those where there may be dual employment, potential litigation targets bend over backwards to prove that they are, indeed, an employer and therefore responsible only for their portion of workers' compensation costs - and not liable in superior court for a civil judgment. In fact, much of the case law in New Jersey on the topic of "co-employment" or "dual employment" has been generated by targets of litigation fighting to show that they were, in fact, the employer of the injured party and therefore entitled to the "workers' comp bar" (the immunity from civil suit afforded an employer is commonly referred to as the "comp bar.")

In a recent case, the decedent was the superintendent at an apartment building. One business entity, "Lincoln Avenue Corp" provided free rent to the claimant, who was required to live 'on the premises.' Another business entity, "TR Mudnick" actually paid the employee his salary.

While these two entities had different names, the two entities shared the same corporate officers, both paid the claimant wages, and being the same entity, each had control over the way he carried out his duties. In so ruling, the Court found that 'free rent' was akin to paying wages.

The result of this ruling - finding that both 'Lincoln Avenue Corp' and 'TR Mudnick' were employers - meant that the claimant's only recourse against those employers was his workers' compensation claim.

This ruling is an important one for employers in similar situations, and employers who (for example) have one company that "operates" a facility and another that "owns the property" that the facility occupies. In cases where the owner of the property - even if that is the same as the 'actual' owners of the operating entity - may be exposed for civil claims from their employees.

Case: Montalvo v. Lincoln Avenue Corporation and City of Newark, A-0904-08T3 (App. Div., decided October 30, 2009).

Pornographic cartoons, rumors of sexual escapades while on a business trips, and a co-worker hell bent on your destruction. No, this is not an episode of Melrose Place: this is working for the City of Asbury Park. On November 23, 2009, the Appellate court found that the Judge of compensation (Hon. Leslie Berich, from the Freehold court) had correctly ruled that the psychiatric conditions that Lori Ross suffered from were related to the hostile working conditions she was exposed to.

The facts of the case established that the petitioner, Lori ross, was the victim of an organized "rumor" campaign at the hands of Cassandra Dickerson. according to the decision, Dickerson was 'jealous' of compliments that a shared supervisor directed to Ross. As a result, she began a smear campaign about the petitioner, allegin sexual indiscretions and crafting stories of escapades which occurred during business travel.

The claimant was also the subject of a pornographic cartoon depicting her relationship with another co-worker. There was also testimony that rather than address these problems head-on, the City attempted to lay off the offended worker.

The petitioner presented evidence that she suffered from 'Adjustment Disorder with Mixed Anxiety and Depressed Mood.' The testifying psychiatrist attributed this condition tot he claimant's employment experiences, which were described as an "unhealthy work environment." The Judge agreed, and found in favor of the claimant.

The facts in this case are extraordinay and show a very dysfunctional workplace in which the claimant can show a pattern of peculiar stresses which amount to more than just a psychiatric reaction to the work itself.

In New Jersey, a psychiatric injury can be compensable by itself - that is, without any physical injury. This was recognized by the Court in Williams v. Western Electric Co., 178 N.J. Super. 571, 577 (App. Div.), cert. denied, 87 N.J. 380 (1981). That doesn't mean that any psychiatric reaction tot he workplace is compensable - just those in which the claimant can meet their burden of proof that the work exposure was a 'material' contributing cause of the alleged psychiatric injury.

The Courts later ruled that the workplace exposures must be 'peculiar' - that is, the workplace conditions must be uniquely linked to the employment, and the medical opinion must be supported by objective evidence. In the Ross case, the work exposures were indeed peculiar: dirty cartoons and an organized smear campaign could not be considered a 'regular' part of a 'normal' employment anywhere.

"regular' incidents of employment, common to all jobs, such as a layoff notice, a bad review, or even a normal dressing-down by a superior, are not the basis for a compensable psychiatric claim in New Jersey.

Workplace psychiatric claims always boil down to a fact analysis. This must be applied on a case-by-case basis. If a claimant can show that the working conditions are 'objectively stressful' and 'peculiar' to that specific employment, the claim may be compensable.

Case: Lori Ross v. City of Asbury Park, A-0379-08T3, (App. Div. Decided Nov. 23, 2009).

It's a sad commentary on New Jersey: even our own state employees don't want to live here. When you travel to Trenton the parking lots of the various state agencies are filled with cars bearing Pennsylvania license plates - and the rush hour traffic is directed out of New Jersey as New Jersey state workers travel home to their residences in Pennsylvania, where they enjoy lower property and income taxes.

This sad state of affairs gives rise to a recent decision that examines what happens when an employee collects workers' comp benefits in one state but live sin another, where he recovers under an Uninsured Motorist policy.

In a recent case, a New Jersey state employee was injured while driving a New Jersey-issued car. He recovered New Jersey workers' compensation benefits. Apparently, the vehicle which struck his official vehicle was not identified or did not carry insurance. So, the employee brought a claim for "Uninsured Motorist" benefits against his own (personal) auto policy (a personal policy under Pennsylvania law).

The New Jersey workers' comp insurer asserted a lien against any recovery the petitioner recived from his personal auto insurer.

If the claimant was a New jersey resident, this would be a 'no-brainer': the workers' comp carrier would pay medical, temporary, and permanency benefits and then recover a lien against the UM (uninsured motorist) carrier. However, this claimant accepted new jersey benefits, then recovered under his Pennsylvania auto policy, and then resisted reimbursing the New Jersey carrier, stating that he was entitled to keep both recoveries because Pennsylvania law allowed him to.

The New Jersey workers' comp Judge relied on New Jersey state law - which forbids double recovery - and Ordered the claimant to reimburse the New Jersey Workers' Comp carrier. The claimant appealed.

On appeal, a three-Judge panel (including Judge Maryann Espinosa, formerly a partner at Tompkins, McGuire, Wachenfeld & Barry) ruled that the Judge of Compensation should have performed a 'conflict of laws' legal analysis before summarily ruling that New Jersey law controlled. The case was remanded to the New Jersey workers' comp Judge to make a final decision.

Conflict of laws issues crop up all the time - most often in cases where a claimant live sin one state and works in another. Some states (like New York) have 'carve outs' where specific amounts ($50,000, in New York's case) are immune from subrogation by a comp carrier. The attorneys at Tompkins have been successfully arguing these cases for years - arguing that New Jersey law controls in issues of subrogation. We sty up-to-date on all changes in this area of the law and keep you informed as well!

Case: Terrence Johnson v. State of New Jersey, A-3202-07T3 (App. Div. Decided Nov. 20, 2009).

In a case with a truly bizarre set of facts, the Judge of compensation had to decide on an issue of what exactly should count as wages, in a claim where the 'employee' was obviously trying to 'game the system.'

Some facts: the claimant, Richard Holle was a funeral director who was injured at work in 1985, getting an award of 60% partial total (remember: 75% of partial total is deemed 'totally disabled' in New Jersey). Over the next 13 years he succeeded in having this finding of disability increased from 60% to 65% and then 'totally disabled.'

The issue before the court: was the claimant working for the respondent at the time he was deemed 'totally disabled', and if so, how would his wages be computed? This was a huge question because the claimant "sold the business' to family members under an "installment contract" that paid the claimant fixed sums for twenty years - and that in return, the claimant continued to act as a funeral director at the funeral home, meeting clients, residing on the premises, holding a state funeral license, and assisting in making funeral arrangements.

If the claimant was indeed working (as the comp Judge found he was) then the claimant would only be due $5 per week for 'permanent, total disability.' This is due to a 'quirk' in the New jersey law which states that if a claimant can earn wages that exceed the wages he earned at the time he was injured, then the employer must pay only $5 per week to the claimant until such time as the claimant's wages fall below his pre-injury earnings.

In this case, the claimant's pre-injury earnings (in 1985) were MUCH LESS than his income under his 'installment contract.' This means that the Comp Judge's ruling - that the 'installment contract' is really the equivalent of wages given what the claimant is actually doing for the funeral home - would entitle the petitioner to only $5 a week in compensation.

The Appellate Division screwed this one up - finding that the Comp Judge needed to make "further findings . . . as to whether petitioner's receipt of payments under the installment contract can qualify as wages or earnings."

Case: Richard J. Holle v. Jacob A. Holle Funeral Home, A-3632-08T2 (App. Div., decided November 5, 2009).

Based on the claimant's testimony at trial, Rutgers was ordered by a Comp Judge to provide a knee surgery to a claimant. Rutgers argued that a surveillance video they obtained showed that the claimant lied during his testimony - and that the Judge didn't give the video enough weight (the Judge viewed the video after he had ruled that the surgery was necessary). The appellate Court upheld the Judge of comp - stating that even if Rutgers was right, that Rutgers would only be allowed to seek reimbursement for expenses associated with treatment obtained through fraud.

This decision hurts Rutgers. Unfortunately, Rutger's counsel apparently waited until AFTER the trial was concluded - and the Judge rendered his decision - to bring up the videotape.

Case: Scott Del Vecchio v. Rutgers, A-2780-08T3 (App. Div., decided November 5, 2009).

New Jersey Claimant Kimberly Paladino was injured at work on March 30, 2001. On February 3, 2005, she agreed to an 'Order approving Settlement.' Nine days later (February 14th, 2005) the respondent issued her draft for the settlement. The claimant then waited seventeen months (until July, 2006) to take the settlement draft tot he bank for deposit. The bank refused to honor the old check.
After the bank refused to honor the original check, the claimant requested that another draft be issued. the respondent complied, and issued a replacement check on July 26, 2006. The claimant deposited the check and enjoyed the proceeds.
The claimant then filed a 're-opener' application on August 28, 2007, alleging that her disability had increased since the entry of her February 5, 2005 settlement and that she was entitled to more compensation.
The respondent raised the statute of limitations as a defense to the re-opener. Under the New jersey Workers' Compensation Act, a claimant has "two years from the date when the injured person last received a payment upon the application of either party on the ground that the incapacity of the injured party has subsequently increased" to file a 're-opener' claim. The respondent argued that the claimant has two years from the date of the original check being issued - not two years from the date the replacement checked was actually cashed - to re-open her claim. Under this reasoning, the claimant was 'out-of-time' on her re-opener.
The Appellate Court agreed: regardless of when the draft was actually cashed, the claimant's opportunity for re-opener was governed by the date the respondent delivered the original check to the petitioner.
Case: Paladino v. Pier One Imports, App. Div. 39-2-5671 (Decided October 26, 2009).

A recent federal case, decided October 9, 2009, explored the definition of ‘employee’ in a New Jersey workers’ compensation context. My discussion of this new case serves as a good summary of the law in this area . . . Read More...

Remember Ronnie Holloway? He was in the news back in May when a video surfaced showing a Passaic City cop, Joseph Rios, jumping out of a patrol car to beat him. The unprovoked attack was captured on a restaurant's surveillance camera, and was the subject of breathless reporting in the Spring.

In a comp-related twist, the partner of Officer Rios, who was present at the beating but didn't take part in it, is being brought up on charges by the Passaic police for allegedly filing a false workers' comp claim in relation tot he incident.

In her New Jersey claim, officer Erica Rivera claims she was struck repeatedly by her partner's baton as he attempted to subdue the victim of the police attack, Ron Holloway. Apparently, Officer Rivera was unaware that the whole incident was caught on tape: the images show Officer Rivera pacing, mostly at a safe distance, during the beating. Her claim alleges she "was struck accidentally several times with a baton about the body & head."

Link to a news report with video of the beating: http://www.youtube.com/watch?v=0lREauR9TvY

The claimant in Cong Su operated a biscotti machine for her employer. While operating the machine, her hand came into contact with a sharp blade causing severe injuries.
To prevent a hand from entering the area where the blade was housed, a metal guard was on the machine. The metal guard was designed to keep the workers’ hands nine inches from the metal blade.
The claimant filed a civil suit against the maker of the machine and her employer. The employer (David’s Cookies) moved to dismiss her claims, arguing that the claimant’s remedy was through the New Jersey Workers’ Compensation Act.
In the civil suit, the claimant produced an expert who opined about the safety devices on the biscotti machine. According to the claimant’s expert, the metal guard protecting the operator’s hands was insufficient: a worker could easily slip their hand under the metal guard, through a one-and-one-half inch gap and into the cutting blade. Further, petitioner's expert testified that the claimant was illiterate, and was unable to read any warning signs or messages (also, the claimant spoke no English). Finally, it was argued that the claimant injured her hand on the first day on the job, and was inadequately trained to operate the biscotti machine.
Read More...

On September 26, 2009 Medicare issued guidance as to how Set-Aside proposals "could" be submitted to Medicare. We expect that these recommendations will now be 'best practices' for dealing with Set-Aside arrangements. Read More...

It happens all the time: where no settlement can be reached a case involving the Second Injury Fund is set down for a bifurcated trial. This procedure allows the Trial to take place without a Deputy Attorney general present. This is generally done when the Fund has taken a ‘no pay’ position.
In a recently decided case (Nisivoccia v. County of Essex, A-1946-07T2 (App. Div. 2009), the court took testimony and began proceedings without the Second Injury Fund. The Court ruled that the claimant was ‘totally disabled’ and the Fund got involved in the case. After Trial the judge found the respondent liable for 35% of ‘total disability’ and the Second Injury Fund liable for 65% total disability.
The Fund appealed, arguing that it was denied the opportunity to cross-examine the petitioner’s witnesses.
The Appellate Panel agreed, stating that “administrative regulations cannot be construed to infringe upon the due process rights of either party” which includes the right to cross-examine witnesses. Read More...

Every year the State of New Jersey Department of Labor issues a new ‘temporary disability rate.’ The rate for 2010 will be $794 per week. The rate for 2009 was $773 per week. To put that another way: according to the State of New Jersey, the average worker employed in New Jersey saw real wage growth averaging 3%.
Every year this rate increases. I have written on this topic every year for the last five years - how does this state TDB rate rise every year? The answer is: because the TDB rate is not really tied to any objective economic indicator. For example, in 2008 the Federal Government (U.S. Bureau of Labor Statistics,)the median weekly earnings of all full-time workers in New Jersey was $948.00 per week. If correct, that would give rise to a New Jersey State TDB rate of only $655 per week for 2008. In New Jersey, the maximum rate of temporary disability for 2008 was $742.00 per week.
As I have written before, the way the Feds and the State calculate ‘average weekly wage’ is different with the net effect that the NJ State Temporary Total disability rates are artificially high.
How much higher? In 2008 New Jersey calculation method yielded a weekly wage estimate that was 9% greater than the Federal estimate of wages.
Presuming that the New Jersey figures are correct for rate of growth, TDB rates for 2009 are too high by approximately $111.00 per week. This is calculated by using the Federal figures for reported wages for 2008 and using New Jersey’s growth factor.
I believe that even New Jersey’s growth factor (3%) is too high: the state has historic levels of unemployment and downward wage pressure is reported in every industry.
Read More...

It’s the number one topic of discussion in most New Jersey workers’ comp courthouses. Has the down economy resulted in less claims or more claims? There are two schools of thought: (1) with the down economy, people are more afraid to lose their jobs by filing a workers’ comp claim, so filings will be trending downward; and (2) with the down economy, more laid-off workers will be more likely to file claims. Which one of these is right? Can we expect claims to fall or increase?
First, we have to admit that there is a data problem. The Division of Workers’ Compensation only published 19 years of historic data, so there isn’t a like period of downturn (the last time unemployment crested 9% Reagan was newly-elected president in 1981). Without hard numbers to crunch (unemployment rate versus number of claims filed) we are left with a statistical analysis of the figures we do have. Even this analysis is going to be severely flawed: New Jersey has been a harbinger of the greater workforce trend of the last thirty-years: the demise of ‘blue collar jobs’ and the rise of the ‘knowledge worker.’ New Jersey’s manufacturing, construction, farm, and trade labor categories have shrunk every year for the past two decades while government (number one growth industry in terms of jobs), professional, academic, and health professions have gained workers. The drop in cl

The New York Workers’ Compensation Board has had the power to issue stop-work orders - now New jersey is drafting a rule to grant this power to the Director of the Division of Workers’ Compensation.
The ‘reform’ legislation passed in October 2008 laid the groundwork for this new power. Specifically, Section 79 of the Act allowed the Division of Workers’ Compensation the authority to issue proposed rules describing how the power to ‘stop work’ would be restrained and authorized.
The proposed rules allow for a stop-work order to be issued if the employer ‘knowingly’ violates the Workers’ Compensation Act. The stop-work provision appears to allow the issuance of the order in the following circumstances:
Where the employer had workers’ comp insurance but allowed the insurance to lapse or cancelled coverage;
Where the employer was told by the Division of Workers’ Compensation or another State agency of the need to obtain workers’ comp coverage;
Where the employer had prior instances of failing to insure;
Where the employer misrepresents the number or type of employees in order to reduce premium costs;
where the employer misrepresents thew work classifications of employees to reduce premium costs.
The stop-work order is to be issued to the particular work-site where the infraction occurred. It is not known (not set out in the proposed rules) whether or not there actually has to be a workplace injury for the Division of Workers’ Compensation to issue a stop-work order. In other words, it is unknown whether this proposed rule is meant to increase compliance with the laws regarding mandatory workers’ compensation coverage or if this proposed rule will merely become another arrow in the quiver of union forces and disgruntled employees.
New York allowed its Workers’ Comp Board the power to issue stop-work orders in May 2007. Since that time more than 1,000 stop-work orders have been issued and approximately $7 Million in penalties have been issued to New York employers.

Two cases, upheld by the New Jersey Appellate Division within days of each other, touch on the same theme: whether subjective complaints given by a claimant are enough to substantiate a claim for permanent disability. In these two cases the Appellate Courts came to opposite conclusions: in one case, they upheld the Judge of Compensation's decision finding that the subjective complaints of the petitioner validated the decision of the Judge of Compensation as to permanency. In the other case, the Appellate Division agreed with a Judge of Compensation who threw out the claims of a petitioner, finding them “just subjective.”
Read More...

In a new case decided June 16, 2009, the Appellate Court ruled that an 'occupational aggravation' of an injury did not constitute a 'second injury' thereby implicating the Second Injury Fund. The case is interesting because the employer/respondent tried to argue that even though the claimant was injured at work ( a specific accident) it was the subsequent occupational exposure at work that worsened the claimant to the point of total disability - and that the occupational worsening should be considered a 'second accident' for the purposes of drawing contribution from the Second Injury Fund. A novel case - with interesting implications for employers in similar situations. Read More...

Your employee gets injured - you pay benefits. Your employee then sues the premises owner, who happens to be your landlord. You also happen to have executed a lease with an indemnification provision. What happens - do you have to reimburse your landlord any money he pays out to settle your employee's claim for injuries? Read More...

A new case (Continental Casualty Co. v. Ameritemp, Inc., 39-2-2843 App. Div) provides a good restatement of the basic formulation (the ‘six factors’ laid out above) used by the New Jersey courts in determining whether a claimant is considered a ‘New Jersey’ employee for the purposes of collecting benefits available under the New Jersey Workers’ Compensation Act.
Read More...

A recent case (discussed in this post) explores the difficulties of defending claims where treatment for a subsequent condition (in this case, HIV/AIDS) worsens an established disability. Does the employer's liability increase? Read More...

We previously reported on the changes to the Workers' Comp Act made in October 2008 (following a string of articles in the news railing against the NJ WC system) that created an 'emergent motion' for Med & Temp when a claimant is alleged to suffer 'irreparable harm' of medical care is denied by the employer.

According to figures provided by Chief Judge Calderone and revealed at the 2009 Workers' Compensation Conference (held May 15th at the Borgata in Atlantic City) only 31 'Emergent' motions were filed since the passage of the law. Of those 31 motions, only 11 were found to have met the criteria of 'irreparable harm' required to be considered 'emergent' by the Courts.

Figures like these (against a backdrop of more than 200,000 work-related accidents reported and more than 30,000 claim petitions for compensation filed) show just how unnecessary the October 2008 "reforms" were in assuring that cases where irreparable harm is possible get addressed by the Court.

New Jersey lost 14,400 jobs in April and unemployment increased from 8.3% to 8.4%.
Only two sectors showed job growth: Government added 1,400 new jobs and 'Education and Health' (also government-spending-driven) added 900 new jobs.

The New Jersey State Bar Association Workers' Compensation section hosted the annual 'Workers' Compensation Conference' at the Borgata in Atlantic City on May 15th.

Chief Judge Calderone reported the following statistics to the crowd of Judges and attorneys:

• In 2008, 47% of cases were closed by an 'Order Approving Settlement' pursuant to N.J.S.A. 34:15-22 ('Section22').
• In 2008, 32% of cases were closed by way of 'Section 20 Lump-Sum Dismissal' (N.J.S.A. 34:15-20).
• In 2008, 20% of all filed cases were dismissed (for Lack of Prosecution, lack of jurisdiction, etc.)
• In 2008, 2% of all cases were tried (reached Judgment).

This entry discusses a recent Appellate decision where the court found that subsequent employment DID aggravate a prior comp injury. Contrast this decision with Zrno, another recently decided case on 'subsequent' injury.
The petitioner in Singeltary v. WaWa, A-5723-07T3, App. Div. decided April 23, 2009 (published version not available as I blog this) worked in a convenience store for 20 years. In 1992 and 2001 she was injured in work-related slip-and-falls involving her cervical spine. At the time of the incidents, AIG was the carrier. In 2002, WaWa became self-insured for workers' compensation purposes in New Jersey. In 2006 the claimant was told she needed a cervical fusion surgery.

The question was: Who was to pay? AIG or WaWa?
Read More...

This entry discusses a recent Appellate decision where the court found that subsequent employment did NOT aggravate a prior comp injury. Contrast this decision with Singletary, another recently decided case on 'subsequent' injury.

In Zrno v. Wegmans (A-4025-07T1)(App. Div. decided April 27, 2009, published version not available as I blog this) the employer (Wegmans) appealed the Order of the presiding workers' comp judge finding that the claimant's current occupational disability was the result of his employment at Wegmans, rather than an aggravation of a prior wc injury. The prior injury was compensated by the prior employer (Wakefern Food Corp.).

The claim petition did not allege that the claimant had actually sustained an injury while employed at Wegmans. Read More...

Greg Lois Presented: 'HIPAA Privacy Rules' for Sompo Insurance Company/Broadspire, April 30, 2009.

Here are the ingredients:

a. One totally disabled claimant;
b. Nine different employers; and
c. A Workers Comp Judge who didn't apply the law correctly.

Result: Appeal and reversal.

Read More...

The “Odd Lot” doctrine permits an employee to recover benefits when a work-related injury, in combination with “personal factors” creates a total disability. What is a “personal factor”? The doctrine, traceable to line of cases, defines a ‘personal factor’ as “a personal handicap.”
The ‘personal handicap’ is not a physical limitation. For employees that have a pre-existing disability, and then become totally disabled as a result of their pre-existing disability and a workplace accident, Second Injury Fund benefits are available.
The ‘Odd Lot’ doctrine refers to ‘personal handicaps’ for other-than-physical conditions. The cases law states that a worker is eligible for Odd Lot benefits when “viewed in the context of the market place, his inability to sell his labor is traceable to his personal background superimposed on his physical disability.”
Qualifying “Odd Lot” conditions are: Read More...

No, it’s not an April Fools’ Joke: On April 1, 2009 the Equal Employment Opportunity Commission, the federal entity responsible for making sure that the nation’s workers are being treated fairly and according to the laws, was found to have “willfully violated” the Fair Labors Standards Act by offering employees compensatory time off rather than paying overtime.
Read More...

A recent New Jersey Appellate Division decision, Campbel v. Shrewsbury Surgicenter, may have a significant impact on commercial premises liability matters within the context of available insurance coverage. The decision was based upon a dispute between the insurer of a commercial tenant and a landlord who was named as an "additional insured" on the tenant's policy. Under the facts, the court found that the landlord was entitled to coverage under the tenant's policy. However, the significant aspect of the decision relates to the court's additional conclusion regarding primacy of coverage. Based upon the types of policies involved and language of the respective policies' "other insurance" clauses, the court also held that the coverage afforded to the landlord as an additional insured under the tenant's policy was only excess to the primary coverage provided under the landlord's own insurance policy. Read More...

The 2009 edition of 'New Jersey Workers' Compensation Law for Adjusters and Risk Managers' has been published. The introductory guide, now reaching 270 pages, includes a copy of the scheduled loss charts for 2009 and a new chapter on 'Motions for Med & Temp' and the new-for-2008 'Emergent Motion for Med & Temp.' Authored by: Joseph K. Cobuzio and Greg Lois. Click here to request a complementary copy.

Deputy Attorney General Dolores McNamee, longtime Second Injury Fund Attorney, was elevated to the bench in January 2009.  Judge McNamee now presides over lists in New Brunswick (two week out of the cycle) and Camden (one week of the cycle).

This leaves the already overwhelmed ranks of the Deputy Attorney general with just four Deputies assigned to the whole state!  Accordingly, Administrative Supervisory Judge Dietrich has cancelled eight (8) Second Injury Funds lists and re-assigned those pending cases to already extant Deputies/Judges.

Because of the state hiring freeze (due to New Jersey's expected $4B budget shortfall), the Second Injury Fund is not able to hire any new Deputies to assist the Fund. Read More...

The State is phasing out half of the centralized computer system that the Workers' Comp clerks have access to. Now, when the docket shows a child support arrearage, and the amount is in dispute, the petitioner's attorney will have to resolve the dispute with the applicable county probation department. Read More...

We normally don’t report on 'unreported' Appellate Division decisions. That is because 'unreported' decisions of a Judge of Compensation have no ‘precedential’ value: they cannot be relied upon as a statement of the law for future cases.

However, the recently decided Natale v. Celanese is notable because it shows what can happen in an occupational disability case when an employer was covered by different policies (and carriers) for successive periods of coverage. Read More...

The NJ Legislature passed six bills which we reported on last year. One such bill requires each carrier or self-insured employer to identify a "contact person" to respond to issues concerning medical and temporary disability benefits in cases where a formal claim petition has not yet been filed. This is the so-called "pre-petition" contact. A form with instructions for competing it is available here. Read More...

The Appellate Division considered in Reyes, et al. v. Egner, et al., etc .,(decided January 8, 2009) whether the lessors of a beach house had a duty to correct or warn about what are claimed to be dangerous conditions of their property, presenting hazards that allegedly were not reasonably apparent to a short-term tenant and her guests. The tenant’s elderly father, who had been vacationing at the house, was injured when he lost his balance while stepping onto an outside wooden platform. The platform was adjacent to the sliding glass door leading from the master bedroom to a rear deck. There was no handrail available to help plaintiff regain his balance, despite building code provisions that appear to mandate one. He and his wife thereafter filed a personal-injury action against the lessors and the real estate broker that had facilitated the two-week lease. Because the trial court erroneously required plaintiffs to prove that the lessors had actively or fraudulently concealed the allegedly dangerous conditions, the court vacated summary judgment entered in the lessors’ favor. The case involved a short-term rental, a context in which a lessee often has only a limited opportunity to discover hazardous conditions on the premises. However, the court affirmed the grant of summary judgment to the real estate broker, declining to extend liability to the broker in this short-term rental context beyond the limits expressed in Hopkins v. Fox Lazo Realtors, 132 N.J. 426 (1993).

In Sexton v. County of Cumberland, decided January 9, 2009, the Appellate Division upheld a denial of benefits from a Petitioner who alleged that her pre-existing respiratory illness (COPD) was aggravated by a co-worker spraying perfume into the air of the workplace. The workers’ compensation judge found that such aggravation was not compensable because it did not arise out of the employment but instead arose out of a "personal proclivity" of the petitioner. The Appellate Division reversed his conclusion, finding that such an aggravation was compensable under N.J.S.A. 34:15-7 because it did arise out of this employment.

A federal judge in Camden has handed down what appears to be the first federal court ruling to allow an insured to inspect a carrier's computerized claims-adjustment process. U.S. Magistrate Judge Joel Schneider directed Allstate to produce "the data, pricing and software Allstate used between 2000-2004 to adjust property losses in New Jersey," along with passwords, keys and activation codes needed to access and use it. The disclosure was ordered in Opperman v. Allstate New Jersey Insurance Co., a suit by a couple over Allstate's handling of their claim for damage to their home in a 2004 fire. The Oppermans allege Allstate omitted and underpriced many items and they could not find a reputable builder willing to do the repairs at Allstate's price. The Oppermans sued Allstate on behalf of a class of similarly situated individuals making claims under Allstate policies. Although Allstate and its software licensing company opposed the inspection of its claims adjustment software, Judge Schneider said the plaintiffs' need for access outweighs the potential harm from disclosure of trade secrets. It is unknown whether Allstate intends to appeal the ruling.

This case will no doubt be cited by plaintiffs' attorneys in New Jersey (most likely with success) to gain access to claims processing software and related tools from insurance carriers.

The New Jersey Supreme Court last Monday was asked to explode the legal fiction in UIM cases that the driver who caused the accident, not the plaintiff's auto insurance carrier who declined coverage, is the defendant. The plaintiff in Bardis v. First Trenton Ins. Co., was injured in a parking lot collision with an underinsured driver. First Trenton paid PIP benefits, but declined UIM coverage. When the plaintiff sued, he requested a jury instruction that First Trenton be the named defendant, which was refused. The jury found that the other driver's negligence did not cause the accident, thereby extinguishing the UIM claim. The Appellate Division affirmed and the Supreme Court subsequently agreed to review the case. It is the Plaintiff's argument that had the jury known of the PIP benefit payments, it could have concluded that the carrier agreed the injuries were caused by the other driver's negligence. At argument, the Justices seemed to be concerned about the possibility that if insurers feel the payment of PIP benefits might lead to subsequent UIM liability, they will have "second thoughts." This suggests the Court may affirm the Appellate Division. However, given the Court's general penchant for ruling against carriers, the decision could go either way. In any event, the decision will have important implications for auto carriers doing business in New Jersey, and we will provide and update upon receiving the opinion.

Video surveillance is often relied upon by the defense in New Jersey Workers’ Compensation cases to either challenge credibility or to demonstrate that a claimant is not as disabled as he appears from his own testimony or his doctor’s examination. A recent case (Gross v. Neptune) has been relied upon by plaintiff’s attorneys to limit the introduction of videotape evidence in contested workers’ compensation trials in New Jersey. Read More...

New Jersey workers’ compensation law makes no distinction between seasonal employees and 50-year veterans in regards to entitlement to compensation for work-related injuries. Seasonal employee have the same rights and protections under our laws as do ‘permanent’ employees.

Seasonal workers hired by nation’s retailers in November 2006: 427,000

Seasonal workers hired by nation’s retailers in November 2007: 458,000

Seasonal workers hired by nation’s retailers in November 2008: 217,200

Source: ‘The Record,’ B-1, December 9, 2008.

FAQ: Is there a minimum number of weeks worked to receive WC benefits pay or is a seasonal employee entitled to compensation if he gets hurt on day one?

Answer: If an employee is hurt in the first minute he “punches in” he is entitled to exactly the same medical, wage replacement, and permanent disability benefits as if he had worked for the employer for 50 years.

A New Jersey appeals court has upheld a no-cause verdict in a negligence suit against a woman whose child injured another child during backyard play while under her supervision. The Appellate Division, in Kane v. Hatch, said the trial judge correctly invoked the parental immunity doctrine, which gives parents a high degree of autonomy in making subjective decisions to carry out their duties and which applies to third-party suits. The defendant "neither placed the children at risk nor exposed them to a commonly inherent danger so as to fall outside the traditional realm of child rearing and therefore outside the protective mantle of the parental immunity doctrine," the judges wrote. The defendant's son was playing tee ball with a wooden bat with two girls, including the plaintiff's daughter. The defendant was supervising from a porch seven feet away. Though the defendant warned the girls to stay away, the boy struck one of the girls with the bat above the eye, causing a scar. Her mother sued the defendant, alleging negligent supervision. The Appellate Division held that the trial court properly instructed the jury to weigh the defendant's conduct against the willful and wanton standard of liability. Parental immunity "protects parents from having to defend against judgment that may be construed as poor or negligent, so long as it is an honest error of judgment that is not wanton or willful." While parental immunity is typically invoked by a parent in a matter involving the injury of their own child, the court applied it here in the third-party context, providing what could be a useful defense for liability insurers, depending upon the circumstances.

In Sroczynski v. John Milek, decided December 17, 2008 the NJ Supreme Court found that there can be no legally effective policy cancellation where a carrier fails to prove that it strictly complied with all of the requirements for canceling a workers’ compensation insurance policy. The NJ Legislature established clear and unambiguous requirements in the cancellation statute, which include the requirement that a carrier file with the Compensation Rating and Inspection Bureau the certified statement required in N.J.S.A. 34:15-81(b). However, the Court also held that only parties that have raised this particular filing issue can be granted relief from improper cancellations - past cancellations that were never challenged on this ground will stand because the policyholders waived their right to challenge them.

One of the most basic questions we always ask when looking at a new claim is: Did the injuries arise out of the employment? There are probably more reported decisions on disputes about this question than any other issue in New Jersey Workers’ Compensation. I dedicate an entire chapter of my book to this subject and blogged extensively on this subject.

In an interesting new decision, an Appellate Panel found that that an employee’s injuries did not arise out of the course of employment while he was on a personal errand.

The claimant, William Garcia, was riding in his employer’s vehicle which was being driven by his foreman. The claimant was on his way to a bank to cash his paycheck. The claimant also alleged that he was riding between job sites or was going to return to the original job site at the time of the accident.

The claimant relied on the following facts to establish that he was actually working at the time of his accident:
• He was actually being driven in an employer-owned vehicle at the time of the accident;
•He was driven by his foreman; and
•He was on his way to or from a job site.

The workers’ compensation judge found that the claimant was not engaged in or assigned to work directed by the employer at the time of the accident. The Appellate Division agreed with this reasoning, and affirmed the denial of workers’ compensation benefits.

The Appellate Panel explored the possible legal arguments that would support the petitioner’s claims for benefits. First, they determined that the claimant failed to show “that the employee was performing his or her prescribed duties at the time of the injury.” (Quoting Jumpp v. City of Ventnor, 177 N.J. 470 (2003).

Next, the Appellate Panel discussed the Supreme Court’s decision in Sager v. O.A. Peterson Construction Company, 182 N.J. 156 (2004) and compared the facts in Sager to the facts of the Garcia case. In Sager, the claimant was “directed” by his site supervisor to extend his workday and have dinner with his co-employees and was injured while returning to the worksite after dinner. The Panel found that unlike the facts in Sager, no one ‘directed’ the claimant to go to the bank and cash his check (they found it to be a personal errand).

Finally, the Panel considered whether it was possible the claimant had a “reasonable belief” that his employer wanted him to go to the bank and cash his paycheck. This consideration was necessary in light of the Supreme Court’s decision in Lozano v. Frank DeLuca Construction, 178 N.J. 513 (2004), which held that even if an employee is not directly told to do something, the act may be found to be “in the course of employment” if the employee had a reasonable belief that his employer wanted the act done.

After considering every possible way that the accident could be considered “arising out of the employment” the Appellate Panel concluded that it did not. The decision of the workers’ compensation Judge dismissing this case was rightly affirmed.

Case: William Garcia v. Wagner Land Expansion, App. Div. A-3595-07T1, decided November 6, 2008 by Judges Stern, Waugh, and Newman. (Note: this blog entry discusses an ‘unpublished’ decision).

Statute discussed: N.J.S.A. 34:15-36

Contributed by: Greg Lois

According to the U.S. Bureau of Labor Statistics, the average man working full-time logs 8.2 hours per day.

According to the same study, the average woman works 7.8 hours.

The average American spends 2.6 hours a day watching TV.

What is a “commutation”? Simply stated, a ‘commutation’ is the legal term for a petitioner asking the Court to accelerate the payment of an award to answer some pressing need of the claimant.

A recent case, Piskorz v. Beno Stucco Systems Corp., discussed the availability of commutation in a specific case. The Petitioner filed a motion for commutation of his workers’ compensation award, stating he wanted to leave America and open a business in Poland. According to the petitioner, he needed his money NOW because he had obtained the promise of a financial subsidy from the European Regional Development Fund for $60,000.00 to open the business, however, as a condition of the approval, he had to provide his own matching personal funds of $60,000, otherwise he will not receive the subsidy. Read More...

Governor Corzine just signed six new laws yesterday which attempt to "reform" certain aspects of the New Jersey Workers' Compensation system. The "reforms" were passed by the Legislature in response to the series of newspaper articles in the Star Ledger which focused on the long wait some New jersey claimant have had to obtain their benefits.

Three of the new laws (S-1914/A-2962, S-1915/A-3059 and S-1918/A-2970) create new reporting requirements, create a new prosecutorial power, and increase penalties on employers who fail to provide workers comp coverage for all their own employees (or see that it's provided for their subcontractors' workers). These laws can be said to address the situations where an employer has no coverage or issues of coverage are in doubt. These laws are in direct response to the Star Ledger series of articles which focused on cases where benefits were delayed because the claimant’s employment status and coverage issues were questioned. Read More...

According to the U.S. Bureau of Labor Statistics, the median weekly earnings of all full-time workers in the United States is $695.00 per week. In New Jersey, the maximum rate of temporary disability for 2008 is $742.00 per week.

We have blogged before on this topic (here and here)- the way the Feds and the State calculate ‘average weekly wage’ is different with the net effect that the NJ State Temporary Total disability rates are artificially high.

How high? Well the state of New Jersey just released figures showing a state average weekly wage of of $1,031.28. (Figures released August 22, 2008).

Who is a “volunteer” and who is an “employee”? The defense of “non-employment” is one of the few affirmative defenses left under the New Jersey Workers’ Compensation Act. This case explores the distinction between and ‘employee’ (whose injuries are compensable) and a ‘volunteer’ (for whom there is no workers’ compensation liability.)

The salient facts of the Flores v. Paragon case are as follows:

•Flores was an undocumented (illegal) worker who was employed by general contractor Bredbenner from April to November of each year. Bredbenner’s business was installing gutters.
•Returning to America after his usual winter stay in Mexico, Flores sought work with Bredbenner.
•Here the story conflicts: Bredbenner testified he had no gutter work for Flores, and instead offered to hire Flores to work at his hose, doing yard cleanup for two days. Pay was $100 per day. Flores testified that he was hiredin his usual capacity as ‘laborer’ without limitation or qualification on the amount or type of work to be done.
•Flores did do yard work for Bredbenner.
•After two days of yard work, Flores accompanied Bredbenner to a gutter worksite. According to Bredbenner, the gutter installation was for a ‘friend’ and the work was unpaid (although Bredbenner was reimbursed for materials).
•According to Bredbenner, Flores offered to help at the gutter installation job, and Bredbenner accepted the offer.
•Flores fell off the roof at the job site, breaking both arms, his nose, and one leg.

Bredbenner argued that Flores was a ‘volunteer’ at the time he fell of the roof - not an employee. Bredbenner argued that Flores ‘offered’ to help and there was no promise of payment for his help. The Judge of Compensation found that Flores was an employee of Bredbenner at the time of the accident. The Appellate Panel agreed.

The legal decision was based on the following factors:
1. Credibility. Basically, the trial judge found Flores more credible than Bredbenner.
2. The statutory definition of employee. N.J.S.A. 34:15-36 defines an employee as “a servant . . . who performs a service for financial consideration.”
3.The prior employment relationship. Flores was able to show a two-year history of working for Bredbenner.
4.The circumstances of the incident. Flores was transported to the work site by Bredbenner, used materials and tools provided by Bredbenner, and worked under the ‘direction and control’ of Bredbenner.

All of the judges acknowledged that the lack of a contract and the fact that Flores was a seasonal employee who had only been back in Bredbenner’s employ for two days complicated the decision.

Case: Flores v. Paragon Construction and Restoration, App. Div. A-1035-07T3, decided September 15, 2008 by Judges Payne and Alvarez. (Note: this blog entry discusses an ‘unpublished’ decision). Also note: I can’t find a copy of this decision online, either at the Rutgers Law Library or the Appellate Division’s page. If you would like a copy of this decision, please contact me directly - my office # is 973-622-3000.

Statute discussed: N.J.S.A. 34:15-36
NEW CASE: FLORES V. PARAGON CONSTRUCTION - DEFINING “EMPLOYMENT”
9/15/08
New Case - Employment - Who Is an ‘Employee’?



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In a case of first impression, the Appellate Division held that where a public entity settles with an injured plaintiff for an at-work injury, the plaintiff's independent contractor-employer is not entitled to a credit for workers compensation payments in a subsequent indemnity suit by the public entity. In Serpa v. New Jersey Transit, a construction worker was severely injured while working on a train station owned by New Jersey Transit -- a publicly owned concern. He received some $900,000 in workers' compensation payments from his employer, the general contractor for the job. New Jersey Transit paid the plaintiff $1.5 million to settle a personal injury suit, wherein the employer was named as a third-party defendant on an indemnity claim. The employer's attorney agreed on the record that the $1.5 million was a reasonable settlement. However, after being apportioned 85% of the fault at trial on the indemnity issue, the employer sought a credit for its workers compensation payments. The trial court declined the requested relief and the Appellate Division affirmed. The court held that N.J.S.A. 59:9-2(e) precludes reimbursement to an employer from a public entity tortfeasor. Rather, the public entity or public employee receives a credit for the workers compensation payments, if a judgment is entered. Thus, in a settlement, a public entity cannot reasonably be expected to pay full value for a claim, knowing that if the case goes to trial, it will receive a credit against the damage verdict for the workers' compensation payments. This was not accounted for by the employer in consenting to the reasonableness of the settlement.

Ultimately, the lesson taught by Serpa for carriers with insureds who work with public entities is that the public entity's right to a credit for workers compensation payments made to injured employees must be taken into account before conceding as to whether a settlement proposal is reasonable. In this case, counsel for the employer should have argued that a settlement of $600,000 was appropriate.

A settlement or judgment is not the end of a case in New Jersey (unless you close a case by way of Section 20 - a ‘lump sum dismissal.’ A claimant retains the right to ‘re-open’ their case if their condition worsens and the doctrine of res judicata does not apply.

The law (N.J.S.A. 34:15-27) states that the worker can ‘re-open’ their claim for “two years from the date compensation was last paid” which includes payments for medical benefits. Read More...

The Temporary Total Disability ‘maximum rate’ climbs to $773 for year 2009. The minimum rate rises to $206.

This represents a 4.2% increase in compensation rates (on the ‘maximum side; interestingly, the ‘minimum’ rate only rises 4%).

In a case decided August 12, 2008, the Appellate Division held that where a personal injury protection benefits insurer has paid benefits to its inured, it is entitled to reimbursement of those benefits from the insurance proceeds of a third-party tortfeasor pursuant to N.J.S.A. 39:6A-9.1, even if the limits of the tortfeasor's insurance policy are insufficient to make the insured whole. In Fernandez v. Nationwide Mutual Fire Insurance Company, which is approved for publication, the court resolved a perceived conflict between two prior opinions on this topic. Specifically, the court found that IFA Ins. Co. v. Waitt -- often relied upon by injured parties for the proposition that their recovery preempts a PIP carrier's reimbursement action -- holds only that recovery cannot be had against the tortfeasor's liability insurer for more than its policy limits. The court further held that Knox v. Lincoln General Ins. Co. controlled and requires that the PIP carrier take priority over the injured party in recovering from the tortfeasor.

As a practical matter, this case should be cited by any PIP carrier seeking reimbursement for payments, especially when there is resistance on the basis that there is a pending personal injury case. The Appellate Division has made clear that there is no reason for a PIP reimbursement arbitration to await the outcome of the underlying tort case.

According to the Division of Workers’ Compensation, 197,006 workplace accidents were reported in 2007. This led to 34,556 new workers’ compensation claims being filed. In addition, 4,773 “re-opener” claims were filed.
These figures show almost no changes in the numbers of filed cases over the past year, but do reflect an increase in reported accidents year-over-year (approximately 20,000 more accidents reported in 2007).

In the well known Rova Farms decision, the New Jersey Supreme Court held that a liability insurer who in bad faith refuses to accept a plaintiff's reasonable settlement demand, will be liable for the amount of any judgment above and beyond the insured's policy limits. In an opinion approved for publication on June 30, 2008, the Appellate Division held that a UM carrier cannot be exposed to Rova Farms liability in refusing to settle with an insured. The court in Taddei v. State Farm, was faced with a case where the plaintiff/insured made a settlement demand after non-binding UM arbitration of $87,500. A jury eventually awarded the plaintiff $2.6 million. However, the trial judge molded the verdict to the $100,000 policy limit. On appeal , the plaintiff argued that the carrier had acted in bad faith, in light of the refusal to settle. The Appellate Division was un-persuaded, reasoning that the Rova Farms bad faith model is inapplicable in the UM and UIM context because the insured is the claimant and, therefore, not exposed to an award in excess of the policy limit.

In a June 26, 2008 opinion from the Appellate Division in the case of Metta v. American Empire Surplus Lines Ins. Co. , the court again affirmed the principle that insurance coverage follows indemnity. Often times, parties seeking additional insured status take the position that when a party is added to another’s CGL policy, they are entitled to the same coverages as the primary insured, without respect to the circumstances underlying a given loss. To the contrary, the court in Metta held that under the pertinent contract, the insured was to indemnify the additional insured only for the insured’s negligence. Thus the court held that since those damages, if any, had not been determined, final resolution had to abide the outcome of the underlying B/I case.

It is important to remember this point of law in determining whether to accept an adversary's tender demand. Very rarely will it be that one party has agreed to indemnify another for the latter's negligence. Thus, the Metta court would advise that an additional insured should only be provided coverage where the primary insured is found negligent. However, all too many times, especially in the case of snow removal contracts and the like, tender demands are accepted prematurely and it is ultimately found that the contractor was not negligent. The carrier is then left to pay the judgment against an entity it does not insure.

Tompkins McGuire frequently advises insurers and TPAs on indemnity issues and related insurance coverage concerns. For more information, please contact Joseph Cobuzio, Esq.

Claimant Orsola Doria, sixty-eight years old at the time of her alleged “accident” filed occupational and specific accident claims against her employer alleging that as a result of her employment as a housekeeper for five years she was totally and completely disabled.

Respondent’s doctors found no disability except for 2.5% of permanent partial total for “post-concussion syndrome” related to an incident where a ceiling tile fell on the claimant’s head.

After eight (8) trial days, the Judge of Compensation found a permanent partial disability of 30% of partial total and dismissed the petitioner's claims against the Second Injury Fund. The claimant appealed.
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Many Second Injury Fund Cases end with a Judge of Compensation ruling that the Fund is dismissed from the case. This usually happens when the Judge determines that (a) the claimant is not totally disabled, or (b) the claimant was totally disabled as a result of the last accident alone, or (c) the claimant’s pre-existing conditions were not disabling.
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In the case of Bolz v. Bolz, a published opinion relapsed in May 2008, the Appellate Division examined the combined effect of the New Jersey Tort Claims Act (TCA), N.J.S.A. 59:1-1 to 12-3; the Joint Tortfeasors Contribution Law (JTCL), N.J.S.A. 2A:53A-1 to -5; and the Comparative Negligence Act (CNA), N.J.S.A. 2A:15-5.1 to -5.17, when there is a collision between a private automobile and an automobile that is owned by a public entity and driven by a public employee. It was held that despite the fact that a public entity is not liable to pay damages unless plaintiff sustained a permanent injury as defined in the TCA, both drivers are deemed “tortfeasors” if they are found to have been negligent and their negligence was a proximate cause of the accident.

Therefore, allocation or apportionment of each driver’s negligence or fault must be assessed, even if there is a possibility that the public entity may not be liable for damages. Put a different way, although no damages can be awarded against a public entity or employee for pain and suffering if the injuries caused by an accident do not meet the threshold set by the TCA, the public employee is, nonetheless, a tortfeasor pursuant to JTCL and the CNA and this affects the judgment against the private tortfeasor.

In a decision released June 10, 2008, the New Jersey Supreme Court held that a negligent infliction of emotional distress claim, fashioned on the liability set out in Portee v. Jaffee, is independent of the requirements imposed by the Automobile Insurance Cost Recovery Act's verbal threshold. The Court in Jablonowska v. Suther, determined that the New Jersey Legislature provided no indication in drafting AICRA that it intended to superimpose the permanent injury requirement on Portee claims that happen to involve the use of a motor vehicle. Accordingly, when asserting a claim for negligent infliction of emotional distress in motor vehicle cases, plaintiffs will not have to submit objective medical evidence of a permanent psychological injury. Nor will they have to file a certification of permanency from a physician.

On June 11, 2008, the Assembly Judiciary Committee took up a bill that Deputy Majority Leader Joseph Cryan (D-Union) has been pushing for three legislative sessions to cap punitive damage awards in cases where several defendants are determined to share responsibility for a harm.

In such cases, as soon as one defendant reaches a punitive-damages settlement with the plaintiff, that agreed-upon figure will be used to calculate a ceiling on the punitive damages the other defendants may be assessed. For example, should a defendant judged 20 percent liable for a harm agree to pay the plaintiff $100,000 in punitive damages, then the maximum punitive damages the plaintiff could receive would be $500,000, and no defendant would be liable for more than the share of that $500,000 corresponding to his or her comparative liability.

TMWB is monitoring the progress of this important piece of legislation.

In Penn National v. Costa, decided April 29, 2008, the Appellate Division reversed the Law Division's denial of the motion for summary judgment by the defendant/third-party plaintiff homeowner's insurer and remanded for the entry of judgment for the homeowner's insurer and against the plaintiff automobile insurer in a coverage action for injuries sustained by the third-party defendant when he slipped on ice and hit his head on the vertical post of the jack being used to replace a tire on his employer's pickup truck in the employer's driveway. Read More...

On Friday, May 3, 2008 New Jersey Governor Jon Corzine signed the nations' third "Family Leave Act" allowing workers up to six weeks off to care for a newborn or newly adopted child, or a sick parent, spouse or child. They could collect up to two-thirds of their pay, up to a maximum of $524 a week. The Bill (A-873) is available here: http://www.njleg.state.nj.us/2008/Bills/A1000/873_I1.HTM

In an important decision for E&O carriers for insurance brokers, the Appellate Division has held that even where an insured knows it has a potential malpractice action against its broker, that claim will not be barred by the Entire Controversy Doctrine if it is not brought in connection with a declaratory judgment action to deny coverage procured by the negligent broker. In Media Sciences International v. Beckerman & Co., the court, in keeping with New Jersey's continuing line of cases which limit the Entire Controversy Doctrine, held that the broker is required to establish by specific facts that it was "substantially prejudiced" by the failure of the insured to join it in the underlying coverage action. Prejudice, the court noted, is primarily demonstrated by showing lack of access to relevant information. Delay alone is not sufficient, nor are "faded witness memories." Therefore, E&O carriers should beware that the the resolution of a coverage action does not necessarily indicate preclusion of a suit against a broker for malpractice.

Tompkins McGuire, regularly represents numerous industries as well as their insurers in professional malpractice claims. For more information on this case as well as other developments in this area, please contact us.

The Appellate Court reversed the decision of the workers' compensation judge, finding the "travel-time" exception to the going-and-coming rule does not apply where a salaried employee is reimbursed for gas, tolls, and wear and tear on his vehicle, but was not paid wages for the time of his commute to and from work.

In Scott v. Foodarama, 398 N.J. Super. 441 (App. Div. 2008), the Appellate Division found that the claimant was merely driving to work when the accident happened, and was barred from receiving compensation for injuries sustained on his commute. In other words, the claimant was engaged in his normal commute. The fact that his commuting expenses were paid by the employer did not make the claim fall "within the course of" his employment.

What makes this case notable is that the claimant was actually reimbursed for his commuting expenses by the employer. (Decided February 27, 2008, link to full decision: http://lawlibrary.rutgers.edu/courts/appellate/a3936-06.opn.html)

A tavern may be liable for negligence if it makes no effort to keep a visibly drunk patron safe, even though his drinking may have been done elsewhere. In a case of first impression, the Appellate Division held in Bauer v. Nesbitt, decided March 20, 2008, that a bar owner can be sued for failing to prevent a patron from getting into a car with another patron who was visibly intoxicated and later caused the passenger's death. The court held that if the bar's employees should have recognized that the passenger was drunk, even if he was not served alcohol there (the passenger only drank a Coke at the bar), there was a duty to protect him from foreseeable injury as the result of an automobile accident by insuring he did not drive and that he did not ride as a passenger with a patron who was similarly impaired. This is the first decision holding that if a patron becomes visibly intoxicated and the bar's employees know or should have known, the patron should not be permitted to leave without trying to find safe transportation.

The New Jersey Workers' Compensation system was the focus of an investigation conducted by the Star-Ledger Newspaper , one of the most widely-read newspapers in New Jersey. The articles (which ran consecutively in April) concluded that "bureaucratic delays, politics and poor state oversight have left thousands of injured workers waiting years for the relief promised by the compensation system." The three-part article has led to a New Jersey Senate Labor Committee hearings scheduled to begin May 5th in Trenton to examine ways to "reform" the workers' comp system in New Jersey. Read More...

The sponsor of a measure to expand damages in wrongful death cases, vetoed by Gov. John Corzine because it could fall heavily on public defendants, has reintroduced it and plans to tailor the bill to the Governor's concerns. The bill would amend the Wrongful Death Act to allow recovery for mental anguish, emotional pain and suffering, loss of society and loss of companionship. Those damages would be available to to those entitled to intestate succession of the decedent's personal property, namely spouses, children and parents. Presumably, the new bill will give judges authority to strike or reduce "excessive" non-pecuniary damage awards. The newly introduced bill has been assigned to the Senate Judiciary Committee. However, no action is predicted until the fall, after the budget process is completed and the Legislature takes its summer recess.

Following a series of unfavorable rulings in the Appellate Division over the past few years, New Jersey courts were generally of the view that biomechanical experts could not be called upon by defendants to opine that a minor automobile accident could not have possibly caused a serious medical condition. However, on March 6, 2008, the New Jersey Supreme Court announced its decision on Hisenaj v. Kuehner, ___ N.J. ____ (2008), reversing an appellate court that overstepped its bounds in throwing out the report of Harold Alexander, PhD., based upon the conclusion that it was not supported by reliable scientific methodology. Thus, the defendants were left with the prospect of facing exposure for significant medical treatment, including spinal surgery, for a motor vehicle collision occurring at less than ten miles per hour. However, the Supreme Court found that the studies Dr. Alexander relied upon, as opposed to those used for support in prior cases, included similar accidents and similar victims in terms of age, gender and physical composition. Thus, the opinions offered were sufficiently supported by scientific data for admissibility.

This was an important victory for insurance carriers in New Jersey, as juries will no longer be left to determine whether low impact collisions correlate to serious medical conditions, especially in the spine, which often times are pre-existing. However, it remains important for defense counsel to insist that their biomechanical experts rely upon the most recent and up-to-date empirical evidence.

TMWB maintains an extensive automobile liability defense practice, representing insureds on personal auto, as well as commercial policies.

Passengers in stolen cars who are unaware the vehicles are being driven without the owner's permission may collect PIP and UIM insurance if they're injured in an automobile accident, the Appellate Division has ruled. In Hardy v. Abdul-Martin, the appeals court reversed a grant of summary judgment to an insurance company that denied coverage in such a circumstance under an exclusion in the insurance contract. The court said, "A passenger cannot be expected to inquire upon entry into a vehicle, as to the status of the car and driver, unless existing facts place the passenger on notice that the use of the car is questionable."

In Cruz v. Central Jersey Landscaping, Inc., decided by the New Jersey Appellate Division on May 14, 2007, the majority found that amendments to N.J.S.A. 34:15-13 (which went into law effective January 14, 2004 setting a uniform 70% of the decedent’s wages as the death benefit amount in dependency cases regardless of the number of dependents) applied to pending workers’ compensation cases including claims where the worker’s death was prior to January 14, 2004.

A recent nationwide poll of 501 businesses with fewer than 100 employees found that six out of ten businesses paid for workers’ compensation coverage. Of those businesses with more than $1M in revenue, that number rose to more than 9 out of 10.

On March 30, 2007 the Appellate Division decided Ventura v. Reliable Wood Products, A-4554-05T1 (Mar. 30, 2007)(Not Approved for Publication). The cases presented a novel issue: an undocumented worker alleged that his daily weekly wages were $500 per week. The employer alleged that his wage was $6.15 per hour.

On November 22, 2005, the very first day he worked for the respondent, the claimant was injured (his right foot was amputated). Read More...

On April 11, 2007 in Kibler v. Roxbury Bd. of Educ., the New Jersey Appellate Division affirmed the decision of a Superior Court trial judge, holding that a plaintiff injured at work as a result of an altercation between two students was barred from pursuing a civil action for damages against the students. The appellate court held that there was no “genuine issue of material fact” as to whether the teacher’s injuries came within the purview of conditions the New Jersey Legislature intended to exempt from the exclusive remedy provisions of Workers’ Compensation Act. The plaintiff’s exclusive remedy is with the Division of Workers’ Compensation for her work-related accident

On March 14, 2007, the New Jersey Appellate Division decided Valcarel v. FSA Management, A-40001-05T2 (Mar. 14, 2007)(Not Approved for Publication). The issue at bar was whether or not the claimant was “acting within the scope of his employment” when the accident occurred. The Appellate Division agreed with the Judge of Compensation (Judge Joel Gottlieb, New Brunswick) that the petitioner was engaged “on personal business when he was involved in the accident in question” and that no compensation would be payable. Read More...

It is a familiar story in New Jersey: immediately after Melard Manufacturing Corporation closed its Passaic plant, laying off 111 workers, 84 of the former employees promptly filed workers’ compensation claims alleging a variety of “occupational” maladies. (Melard, which manufactured plastic bathroom parts and packaged other items, laid off the workers in 2002.) The problem: the employees were represented by a single law firm, which filed identical complaints for each former employee, changing only the personally-identifying information on each court pleading. Melard filed a complaint in federal Court alleging Racketeer Influenced and Corrupt Organizations Act (RICO) violations by the employees and their lawyers - alleging that “fraudulent claims were being filed” and that “workers were being coached.” Melard claims that the workers gave false complaints to their physicians and that the lawyers who filed the claims solicited and developed the complaints. Melard argued that none of their workers ever filed a claim for pulmonary-related complaints before the plant closed and no worker claimed retaliation for filing a claim. Melard allegedly was told of this wrong-doing by a former employee who came forward. Read More...

Two cases decided in February 2007 examined the proofs in an occupational-disability case.

Credibility is King . . . Patel v. Federated Logistics, App. Div. February 7, 2007 (not approved for publication)

Petitioner Yogina Patel claimed that exposure to "dust, fumes, pulmonary irritants, bending, lifting and repeated manipulations" while working for three years as a checker in a dusty warehouse caused her to become permanently disabled.

During a full trial, the claimant presented the testimony of her physicians, who testified that the petitioner suffered from "inflammation of the soft tissues of the muscles" and "chronic bronchitis."

The employer presented the testimony of its Human Resources manager, who disputed the claimant's descriptions of the premises and her claims that the warehouse was "dusty."

The Judge of Compensation dismissed the case, finding that the claimant's description of the warehouse was not true and her complaints were therefore not credible.

Practice tip: In defending occupational disease claims, the testimony of an employer-representative to dispute specific facts asserted by the claimant may be powerful evidence for the defense.

. . . Objective Medical Evidence- Larsen v. City of East Orange, App. Div., February 13, 2007 (not approved for publication)

East Orange firefighter Kenneth Larsen brought a claim for occupational exposures to asbestos resulting in colon cancer and pulmonary disabilities which he alleged were related to his employment.
Both parties retained experts. During the trial, respondent's expert admitted that he could "not rule out" the claimant's workplace exposures as a possible cause of the Larsen's cancer and disability.

There was no dispute that the claimant worked in a facility with "free asbestos" present.

Based upon the lack of disagreement between the experts and the presence of the admittedly cancer-causing substance in the workplace, the Appellate Division affirmed the decision of the Judge of Compensation finding a causal relationship between the cancer and the work exposures.

The New Jersey Workers' Compensation Act states that “employment starts when an employee arrives at the employer's place of employment to report for work and [ends] when the employee leaves the employer's place of employment."

The Act provides exceptions for (1) paid travel time; (2) employees using an employer-authorized vehicle; (3) travel by emergency personnel (fire, police) traveling to an emergency. Generally, off-premises travel to and from work is not compensable, UNLESS the employer provides the transportation.

A recent case, decided February 22, 2007, discusses the application of the going-and-coming rule in the context of a familiar set of facts.

In Lawhead v. Harleysville Insur. Co., App. Div. February 22, 2007 (not approved for publication), defense attorney Mark Lawhead appeared in workers' compensation court in Newark to represent his employer, Harleysville Insurance Company. He was busy in court until 2:45pm. He was scheduled to appear the following day in Freehold workers' compensation court, and because he did not have the necessary files, he drove in a company-owned vehicle from Newark to his office in Somerset to pick them up. After retrieving the files, he was injured while driving from his office to his home in Tinton Falls (again, in the company-owned vehicle).

The Judge of Compensation found Lawhead's injuries compensable by deciding that Lawhead was "engaged in an activity for his employer's benefit when he had his accident" and because Lawhead was operating a company-owned vehicle at the time of the accident.

The Appellate Division panel disagreed and reversed the Compensation Judge, finding that the petitioner was "merely in the course of traveling from his office to his home at the end of a normal workday." The Appellate Division found that the claimant was "engaged in his regular commute" and therefore not entitled to benefits.

Practice tip: The facts surrounding an off-premises accident are of paramount importance in determining whether the claim is compensable.

Tompkins McGuire continually monitors the decisions of the workers' compensation courts. Any questions? Feel free to contact us!

The Division of Workers’ Compensation has simplified the process for obtaining payment from the Uninsured Employers’ Fund.
From Director Calderone’s February 5, 2007 memo:

“The current law requires that a petitioner or the petitioner's attorney make a request for payment in writing to the Commissioner of Labor and Workforce Development before the Uninsured Employer's Fund (UEF) can comply with an order for petitioner benefits, counsel fees or other costs. To have each individual petitioner or petitioner attorney prepare separate letters for payment has created unnecessary benefit delays and expenses for the parties.”

The Division has created a new form that all UEF attorneys will have available at the time a judgment or order for UEF benefits is entered. The UEF attorney will bring the completed form back to the Division to commence the payment process. No additional letters or mailings will be required by the parties.

A panel of Appellate Division judges overruled the Judge of Compensation in this occupational disease death case. The Workers’ Comp Judge found that the decedent, a heavy smoker, was exposed to asbestos when he worked for Mid-State Sprinkler. The Judge of Compensation decided that the asbestos exposure was what caused the cancer that the claimant died from. The Appellate Division disagreed, finding that the plaintiff’s proofs did not establish medical causation and there was no evidence brought out at trial that the decedent had symptoms of asbestosis.
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Section 40 lien reimbursements now allow for a reduction of up to $750 for petitioner's expenses where a petitioner has recovered money in a third-party suit. Petitioner's expenses were previously limited to a reduction of $200. This change has been codified at N.J.S.A. 34:15-40. The upshot: workers' compensation insurers will now recover slightly less from claimants who receive an award or settlement in a third-party suit.

New for 2007: A Judge of Compensation can now award interest on awards that have not been paid within 60 days. This is a significant change in the law, as compensation judges previously could not award interest for withheld payments until after 90 days. This change has been codified at N.J.S.A. 34:15-28. Practice tip: issue payments due under an award as soon as possible to avoid a motion for interest (which can be brought by petitioner's counsel or the Judge herself).

The 2007 edition of the ‘Introduction to Workers’ Compensation’ is published. The book, produced by the Tompkins McGuire workers’ compensation department, provide a ‘soup-to-nuts’ overview of the workers’ compensation system in New Jersey, and includes valuable practice tips for claims professionals handling workers’ compensation claims in New Jersey.

The 2007 edition contains updated and expanded information regarding the intersection between OSHA and workers’ compensation, recent information regarding the Medicare Secondary payer Act, and case summaries of all recent decisions of the Appellate Courts. For more information about the book, or to request a free copy, please see this page.

Also, if your “revision” number on the front of you copy is lower than # 11.xx.xxx, please contact us to request an updated copy. The Medicare Secondary Payer chapter, Chapter 12, changed considerably and the newest revision, reflects the new information. Read More...