In 1979, the New
Jersey Legislature made sweeping changes to the Workers’ Compensation Act. Among those was the creation of a sliding scale
on the Schedule of Disabilities found in N.J.S.A. 34:15-12c. The legislative intent was to award greater
compensation to the more seriously injured worker. To accomplish this intent, the pertinent
language in Section 12c says: “When a
claim petition alleges more than one disability, the number of weeks in the
award shall be determined and entered separately for each such disability and
the number of weeks for each disability shall be cumulative when entering the
Initially judges of compensation as well as appellant panels had mixed interpretations of the above section. The issue was resolved in 1984 with the New Jersey Supreme Court decision in Poswiatowski v. Standard Chlorine ChemicalCo., 96 N.J. 321 (1984). Poswiatowski was actually a consolidation of three cases and the other two are: Fagan v. City of Atlantic City and Smith v. United States Pipe and Foundry Company.
the petitioner fell in 1981 fracturing his back and left foot and received an
award of 20% permanent partial disability for the back, 40% of the foot and 10%
permanent partial disability for the neuropsychiatric component. The trial court, believing that the award
should be entered separately, gave $6,924 (120 weeks @ $59) for the back, $4,328
(92 weeks @ $47.04) for the foot and $2,820 (60 weeks @ $47) neuropsychiatric
for a total of $13,172. Petitioner
argued that the total of the weeks should dictate the rate, and he should have
been awarded 272 weeks at 50% SAWW (State Average Weekly Wage) or $33,456. The Appellate Division affirmed and the
Supreme Court granted certification.
In the Fagan case, the petitioner, a public health nurse, was assaulted and robbed during the course of her employment. She suffered a concussion, fractured nose, facial scarring, sinus disorders, headaches, facial numbness and recurring nightmares. The compensation court awarded her 7 ½% permanent partial disability (45 weeks) for the fractured nose, 7 ½% permanent partial disability (45 weeks) for severe contusions of the scalp, lips and mouth with numbness, and 15% permanent partial disability (90 weeks) for the post traumatic nightmares. That totaled 180 weeks (30% permanent partial disability) at an average rate of $57.30 or $10,314. The Appellate Division reversed and modified the award to $8,460. ($2,115 nose + $2,115 contusions and numbness of face plus $4,230 nightmares). Again, the Supreme Court granted certification.
petitioner received a significant crush injury to his right forearm resulting
in numerous surgeries for vascular, orthopedic and cosmetic injuries together
with skin grafts from petitioner’s abdomen and right thigh. The compensation court awarded 23% permanent
partial disability (138 weeks @ $66) for the combination of the right hand and
right leg (apportioned 50% of the hand and 5% of the leg), 10% permanent
partial disability (60 weeks @ $47) for the cosmetic scarring of the abdomen
and 12 ½% permanent partial disability (75 weeks @ 47) for neuropsychiatric residuals
for a total of $15,468. Petitioner
argued that he was entitled to 273 weeks at 50% SAWW or $33,759. The Appellate Division agreed with petitioner,
finding that the compensation court’s interpretation was “inconsistent with the
purposes of the 1980 amendments.”
The Supreme Court
stated “(W)e believe that the Smith case best illustrates the method
most consistent with statutory purpose.” The court added, “We hold that the
weeks of compensation awarded for one accident’s multiple injuries that
establish a single compensable disability should be cumulated, not
separated, in computing the award.”
The Supreme Court went on to explain, “(O)f course, if the compensation judge uses the schedule as an aid in determining the extent of the award, such may be regarded as a reasonable finding if expressed in terms of permanent partial disability. Orlando v. F. Ferguson & Son, supra, 90 N.J.L. at 553, 102 A. 155. But the point of the Smith panel is to focus on the nature of the injury. The method of calculating permanent partial disability to two or more major body members under N.J.S.A. 34:15-12(c)(20), -12(c)(22), has not been affected by the 1980 amendments. The compensation court is not to determine the scheduled number of weeks for each injury separately; rather, it is to look at the effect of the injuries and to make a reasonable assessment of the extent of the combined disability in terms of a percentage of permanent and total disability. This requires the court to make a judgment about the extent of impairment resulting from the combined injuries without being limited by the statutory schedules. See Cooper v. Cities Serv. Oil Co., supra, 137 N.J.L. at 182, 59 A.2d 268; Orlando v. F. Ferguson & Son, supra, 90 N.J.L. at 557, 102 A. 155; Vishney v. Empire Steel & Iron Co., supra, 87 N.J.L. at 483-84, 95 A. 143.”
In further support the Court said: “(B)ut under the new schedule of benefits set forth in N.J.S.A. 34:15-12(c), the difference is of great significance. If the weeks due the injuries are added together when entering an award, more money is awarded. By the 1979 amendments, L. 1979, c. 283, § 5, the Legislature not only increased the weekly rate for permanent disability from a maximum of $40 to a maximum of 75% of statewide average weekly wage (SAWW), but also created a sliding scale of weekly dollar payments ranging from $47 where the adjudicated disability requires payment for 90 weeks or less, up to $82 for the last six weeks of disability for which 180 weeks of payments are required. Over 180 weeks of entitlement, there is a dramatic increase in weekly dollars payable. From 181 up to 600 weeks, disability is compensated from a low of 35% of SAWW (for disabilities drawing entitlement of from 181 to 210 weeks), to a maximum of 75% of SAWW (for disabilities falling within the 421- to 600-weeks bracket.)1 See **1259 Gothelf v. Oak Point Dairies of N.J., 184 N.J.Super. 274, 445 A.2d 1170 (App.Div.1982).”
Based on this logic, the Supreme Court reversed the appellate division decisions in Poswiatowski and Fagan and affirmed the decision of the appellate division in Smith.
Now let’s consider how stacking affects reopener claims and new accidents. Where an injury results in an award encompassing more than one body part, and the petitioner seeks to reopen that award under N.J.S.A. 34:15-27 for review and/or modification of the prior award, the petitioner need not allege an increase in disability to all affected body parts. Since the original award set the overall disability for the accident, an increase of disability to one part is added to the overall award. In effect, the prior award becomes the base.
For example, let us assume that petitioner receives an award for injury occurring in 2017 to his or her lumbar spine and left shoulder. The award is for 35% permanent partial disability apportioned 20% to the low back and 15% to the left shoulder (210 weeks x $418 = $85,260 assuming wages sufficient for maximum rates in 2017). In 2019 petitioner files an application for review and/or modification alleging an increase in disability to the left shoulder. The judge of compensation finds an increase in disability of 7 ½% of the left shoulder, taking into consideration the overall disability to the petitioner in 2019. The overall award must be increased to 42½% permanent partial disability apportioned 20% (unchanged) to the low back and 22 1/2% of the left shoulder. Because it is an extension of the original award, the award must be paid at the rates in effect for the year of the accident, which is 2017. (255 weeks x $522 = $133,110 less credit for the prior award of $85,260) The award calculation is made by going back to the beginning of the original award and changing the rate to $522 and paying the accrued weeks at the increased rate of $104 per week and the balance of the non-accrued weeks at the full $522.
In contrast to the example above, stacking does not occur with a new accident to one of several previously awarded body parts. Suppose our petitioner above received the original award of 35% permanent partial disability and then had a new accident in 2019 causing increased disability to the left shoulder only. The Judge of Compensation finds an overall disability to the left shoulder to be 22 1/2% permanent partial disability. That is 7.5% higher than the prior shoulder apportionment of 15%, but the new award is only based on the shoulder, not the low back. In effect, the shoulder can be separated from the previously stacked award. So the new award would be 22 ½ % permanent partial disability for the left shoulder minus a credit of 15 % preexisting with no mention of the back at all. The new award would equal 135 weeks x $271.33 or $36,630 credit $22,140 (15% @ the 2019 rate) or $14,490. Obviously, if the new award had been stacked on the prior back/shoulder award, it would have resulted in a great deal more money.
Notice in this example of the new 2019 accident impacting only the shoulder, that the rates must be those for 2019 for both the new award AND the credit. Obviously the new award should command 2019 rates since the new injury occurred in 2019, but the credit also jumps to 2019 rates, unlike the situation noted above for reopeners.
Reopener petitions abound in New Jersey, but seldom does an injured worker seek on reopener to move an award of 30% permanent partial disability to total and permanent disability benefits. That was the issue in Camarena v. Sprint PCS, A-2205-17T2 (App. Div. June 24, 2019).
Ms. Camarena obtained an award of 30% permanent partial disability in 2003 arising from a work-related motor vehicle accident dating back to 1999. The award was for a bulging disc at C6-7 and disc protrusions at L4-5 and L5-S1. Camarena later reopened the award and sought total and permanent disability benefits with the Second Injury Fund. Capehart and Scatchard partner, Michelle Duffield, argued successfully that petitioner’s subsequent increased disability was not related to the 1999 work accident but to subsequent non-work injuries.
There was no dispute that petitioner’s condition clearly
worsened in the years following the 2003 award.
The dispute centered on what caused the worsening. Petitioner admitted to having a car accident
in July 2002 but claimed that she only injured her knee at that time. Respondent obtained medical records from that
accident and proved that petitioner treated for her neck and back after the
In 2004 petitioner suffered a serious fall from her knee giving out. She obtained a new cervical MRI, which showed a new herniation in the neck, leading to a discectomy and fusion surgery at C5-6. She fell again in 2007 and reinjured her low back. A new MRI showed an L4-5 disc herniation and an L5-S1 disc herniation. In 2007, she had a revision surgery on her neck. In 2008, she fell again, leading to another cervical MRI. At the time of trial, she needed a health aide 40 hours per week during the day and 12 hours a week at night.
The petitioner’s expert testified that he knew about the
right knee injury from the 2002 car accident, but he was unaware that
petitioner complained about her neck and back from that accident and had a 2004
MRI showing a new disc herniation in her neck.
Respondent’s expert testified that petitioner’s worsening condition
related to the subsequent car accident and subsequent falls from her knee
injury sustained in the 2002 car accident.
The Hon. George H. Gangloff, Jr. dismissed petitioner’s
claim against Sprint PCS and against the Second Injury Fund. Judge Gangloff found that there was a
contradiction between petitioner’s description that she only injured her knee
in the 2002 car accident when compared with the actual medical records
documenting spine complaints. The judge
reviewed the medical records carefully and noted that the petitioner had several
non-work injuries after the 1999 workers’ compensation injury.
Petitioner appealed and argued that she was totally disabled from a worsening of the 30% award entered in 2003. However, the Appellate Division pointed out that petitioner’s own orthopedic expert had mistakenly believed that the 2002 car accident only involved the petitioner’s knee. Nor did the petitioner’s expert know much about the subsequent 2004 fall. The Court held, “The 2002 motor vehicle accident was an independent intervening cause. As a result of that injury in 2004, her knee later gave out causing her to fall and again worsen her injuries – for reasons unrelated to the 1999 incident. The 2002 motor vehicle accident and her numerous falls were clearly intervening independent causes which broke the chain of causation from the 1999 accident to the present.”
This case underscores why it is so important for employers, carriers, third party administrators and self-insured entities to focus on subsequent health records in reopener cases. Even in serious reopener cases, there is sometimes a rush to arrange a reexam in order to reach closure without spending the time and effort on discovery and investigation into interval activities and injuries. In this case, the subsequent investigation saved the employer a great deal of money. Respondents are well advised to order a new ISO and ask on reopener interrogatories about subsequent work and non-work injuries as well as subsequent surgeries. This case points out that the medical records are often more accurate than a petitioner’s recollection of an old injury. While petitioner stressed that the 2002 car accident was a knee injury, — and it primarily was — the records showed treatment to other parts of the body as well.
Reconstruction of Wages is an issue in many New Jersey workers’ compensation matters. In a case handled by Capehart Scatchard and successfully argued by Keith Nagy, Esq., the Appellate Division stressed that petitioner has to prove permanent impairment of full-time working capacity arising from a work injury before wages must be reconstructed. The case is Lawson v. New Jersey Sports and Exposition Authority, A-4058-17T1 (June 26, 2019).
Petitioner, Ms. Lawson, had two jobs in 2009: one for the
NJSEA as a stadium usher earning about $14 per hour and the other for Wal-Mart
in a full-time position. She broke her
femur at work on the part-time job with the NJSEA I 2009 and had metal rods
inserted into her leg during surgery. She
worked very few hours for NJSEA, so her wage was only $103.36 per week giving
rise to a rate of $72.35 per week for permanency purposes. Because petitioner had a significant injury
consisting of a femur fracture and other leg injuries, the parties ultimately agreed
that the disability was thirty three and one third percent. Where the parties disagreed was on whether to
do wage reconstruction. That issue was
the one that was tried fully.
Without wage reconstruction, the one third award amounted to
$14,469. With wage reconstruction, the
one third award would have amounted to $72,300 because the $14 per hour wage
would be reconstructed on a 40-hour per week basis to $560 with a rate of $392.
reconstruction in this case really mattered:
$14,469 versus $72,200. The
difference was $57,531.
Petitioner testified at trial that after her accident on
August 14, 2009, she took medical leave from Wal-Mart until April 2010. When she returned to Wal-Mart, she did so
with medical restrictions limiting her to part-time work. Petitioner refused the company’s offer of
part-time work and was let go. She later
reapplied to Wal-Mart for a full-time position but the company did not rehire
her. After she recovered from her
surgery, she was able to return to her part-time job as a stadium usher for the
Petitioner collected unemployment from July 2010 to December
2012, certifying that she was ready, willing and able to work. At the time petitioner testified at trial,
she said that she could not do stocking of shelves and so was unable to get a
job in other large stores. She also
testified that she felt she could work full time in a store but only if she did
not have to climb ladders. At the time of her testimony, she was working
part-time at a supermarket. She admitted
to doing a lot of physical work at home, mowing the lawn, cutting wood with a
small electric chainsaw, walking a mile and swimming.
Two experts testified in the case on the issue of
reconstruction of wages. Dr. Tiger for
petitioner said that petitioner could not do full-time work as a consequence of
her injury at NJSEA. However, he did not
know that she was climbing up and down stairs as a stadium usher, and he did
not know that she was swimming, walking a mile and doing some strenuous home
Dr. Mercurio for respondent testified that petitioner had minimal
residual disability from her injuries.
He felt that she could work full duty without restrictions. He noted that petitioner had a second surgery
in 2014 to remove hardware from her leg and observed that petitioner told
physicians that she was “better than she was before.” When Dr. Tiger examined, the second surgery
had not yet taken place, so he really could not comment on this issue.
The Judge of Compensation found Dr. Mercurio to be the more credible medical witness. The Judge noted that Dr. Tiger was not aware of several key facts in the case that Dr. Mercurio had been aware of. The Judge stated that “petitioner was a very sturdy woman with a high level of physical strength and endurance and energy.” This conclusion was based in part on the many home activities petitioner engaged in. The Judge cited to the leading case on reconstruction of wages, Katsoris v. South Jersey Publishing Company, commenting that petitioner failed to prove that “she lacked potential for full-time employment under the Katsoris decision.”
Petitioner appealed to the Appellate Division and argued that she had not been able to return to full-time employment, which was proof in and of itself that her wages should be reconstructed. The Appellate Division disagreed. The Court said, “petitioner did not prove that her injuries from the 2009 accident diminished her capacity to perform full-time work.” The Appellate Division credited the Judge of Compensation in making appropriate findings in the case.
This is a helpful decision to practitioners because it shows that it is not enough to prove wage reconstruction simply by stating that one has not returned to full-time work. Physical capacity of the worker both in and outside work must be considered. The Judge in this case found that the petitioner could in fact do full-time work based on the physical activities that she engaged in at home, and respondent’s expert made the point that she had no restrictions against doing full duty work.
By: Alfred Vitarelli, Esq., Shareholder, Stark & Stark
Yes, it’s me again with yet another nightmare-inducing minefield to trap the unwary practitioner. Well, perhaps that’s an extreme analogy. But since we are dealing with Department of Defense-based health coverage, I believe a military-themed introduction is a necessity. Ok, I’ve got it: think of these liens as submarines, lurking underwater, undetectable unless the destroyer above uses sonar to locate it. Hmmm…I think I’ll take a break and order up “The Hunt for Red October,” or that Burt Lancaster/Clark Gable classic, “Run Silent, Run Deep.” Ok Al, enough with the movies, get down to business…..”one ping only.” Sorry, just had to get a line from a movie in here. Sorry if it makes no sense. Watch one of the above movies!
Ok, why do I say a proactive approach is needed? Well, for
one, many Petitioners are covered by VA health insurance or Tricare. Tricare,
you say? Yes. Tricare is a Department of Defense health benefit plan for
uniformed service members, retirees and their families. They are established
under CHAMPUS, the Civilian Health and Medical Program of the Uniformed
Services. Both VA health coverage and Tricare are secondary payers with respect
to workers’ compensation treatment and both have rights of subrogation under federal
law. The primary source of the right of recovery is found in the Federal
Medical Care Recovery Act, 42 U.S.C 2651. However, both the VA and Tricare have
additional statutory and Code provisions addressing recovery procedures, which
will come up while researching these lien issues.
Both the Veterans Administration and Tricare have a right of
recovery of any amounts paid for ineligible treatment. For purposes of this
article, ineligible treatment is treatment provided for a work-related injury.
Simply put, both entities have statutory rights to recover the cost of
treatment provided for a work-related injury or condition to a covered
beneficiary. Keep in mind, however, that while the VA covers veterans, Tricare
covers service members, retirees and their families, so Tricare’s right to
recovery of course extends to all such covered persons. This places an
additional responsibility on the practitioner, which I’ll discuss later.
The VA collection rules are found in 38 CFR 17.106. It
states in part:
“(a)(1) VA has the right to recover or collect reasonable
charges from a third-party payer for a nonservice-connected disability in or
through any VA facility to a veteran who is also a beneficiary under the
third-party payer’s plan.” Later, this section defines a third-party payer as
“…an entity, other than the person who received the medical care or services at
issue…responsible for the payment of medical expenses on behalf of a person
through insurance, agreement or contract.” A listing of third-party payers
includes: “(F) workers’ compensation program or plan sponsor, underwriter,
carrier or self-insurer.” Pretty comprehensive, no?
Tricare’s collection rules are found in 32 CFR 199.12. The
General statement (a) states:
“This section deals with the right of the United States to recover from third-parties the costs of medical care furnished to or paid on behalf of TRICARE beneficiaries. These third-parties may be individuals or entities that are liable for tort damages to the injured TRICARE beneficiary or a liability insurance carrier covering the individual or entity. These third-parties may also include other entities who are primarily responsible to pay for the medical care provided to the injured.”
Please note the emphasis on reimbursements from third
parties. This requires the respondent to also be actively involved in the
handling of such liens, at least in my opinion.
The recovery provisions under the rules for both the VA and
Tricare are very similar. Each allows suit to be filed in federal court against
a third-party payer within six years of the last day of the provision of the
medical care or services for which recovery or collection is sought. However,
they are much too extensive to include them here. I therefore recommend they be
read in full, as they also refer to other statutory and rule provisions which
will also impact the handling of WC matters involving VA/Tricare payments. By
way of example, I’ll just point to one:
VA/Tricare “reasonable charges,” determined in accordance
with federal law and regulation, “shall be” judicially noticed. See: 44 U.S.C.
1507. The government is not required to litigate reasonableness of
administrative fixed rates. Billing rates are not subject to challenge for
unreasonableness or arbitrariness. There are many more which may impact any
case at a given time, so when dealing with these liens, do the research!
Now it’s time for some practical ideas for handling claims
involving the VA/Tricare. As I noted earlier, many people are covered by the VA
or Tricare. For the petitioner’s attorney this will require asking a potential
client at the first interview if he or she is covered by either program. In my
prior article in this blog on Medicaid/NJ Family Care I pointed out that even
people working for employers which provide excellent health care are covered by
those programs due to the cost of the employee’s share of premiums,
co-payments, etc. The same situation exists with Tricare. Just the other day I
interviewed a woman working for a company with good employer-provided health
care. However, she was covered by Tricare, since her husband was retired from
Another issue I really need to address is whether there are
requirements in these recovery Acts or Codes placing a direct responsibility on
an attorney to place the VA/Tricare on notice of a WC claim filed by a
beneficiary where some treatment has been provided by one of these programs. While
I am unaware of any such written requirement, keep in mind that the beneficiary
(your client) does have a duty to cooperate in recovery efforts. Further, the
attorney has a duty to properly represent the client. So, my position is yes,
notice should be given even if no inquiry from either program has been sent to
the attorney or client.
I believe respondents need to be pro-active here. I previously
quoted provisions of the VA and Tricare recovery Codes. Both clearly state
recovery is against a third party payer, and define a third party payer as
including workers compensation programs and carriers. In addition, I need to
cite a further VA Code provision:
38 C.F.R. 17.106 (c): VA’s right to recover or collect is exclusive. The only way for a third party payer to satisfy its obligation under this section is to pay the VA facility or other authorized representative of the United States. Payment by a third party payer to the beneficiary does not satisfy the third-party’s obligation under this section. (Emphasis added.)
This section, referring to an obligation on the part of the
third party payer, emphasizes the need for the respondent to be pro-active, in
my opinion. On its face, this section prohibits a settlement whereby the respondent
pays petitioner a sum of money to satisfy a VA/Tricare lien. Its import,
however, emphasizes the respondent’s role in satisfying a lien. Respondents
therefore need to act quickly in determining if a claimant is covered by
VA/Tricare as early as possible following receipt of a First Report of Injury.
In claims where the petition is the first notice of claim, respondent’s counsel
should immediately determine this information.
In closing, I’ll first provide two websites to visit when faced with payments by the VA/Tricare. For the VA I found the VA’s Office of General Counsel’s website quite helpful. This is www.va.gov.ocg/collections.asp. For Tricare I suggest visiting their website at www.tricare.mil and go to Forms/Claims/ThirdPartyLiability.
I’d also like to state that of the various liens discussed in my articles, those from the VA and Tricare, seem to be less understood than others. It is hoped this article will alert practitioners to them. All parties must recognize the importance of identifying and addressing payments made by one of these Department of Defense health care programs. The statutes and rules are extensive and complex but do provide guidance in navigating the shoals of DoD liens. There, I closed with another naval reference!!
(Editor’s Note: Many thanks to Alfred Vitarelli, Esq., a frequent contributor to this blog, for an incredibly helpful explanation on how to deal with VA and Tristar liens. This is an area of law that employers, adjusters, and practitioners must understand, and the rules are not exactly the same as those with CMS and Medicare. Keep this blog by your side because we will all be dealing with VA and Tristar liens on a fairly regular basis.)
Sometimes tensions flare up between employees resulting in physical altercations with unexpected consequences. A case in point is Bhut v. Aluminum Shapes, No. A-4652-17T1, 2019 N.J. Super. Unpub. LEXIS 1322 (App. Div. June 10, 2019). The petitioner, Mr. Bhut, worked as a technician fixing manufacturing equipment. He said that on May 21, 2017, he entered the employee locker room. A co-worker, Mr. Stevens, had his feet up on a bench. Bhut said he asked Stevens to move his legs but Stevens refused. Bhut jumped over Stevens’s legs but his feet caught Stevens’s leg in the process. According to Bhut Stevens threw a cup of soda at Bhut.
Petitioner said he left the room
but came back a few minutes later to wash his hands. He ran into Stevens outside the locker room
in a narrow walkway. Stevens was holding
a pizza box. Bhut testified that Stevens
pushed the pizza box at him as Bhut passed Stevens. To keep the box away from him, Bhut swung his
arm toward Stevens and hit a hat on Stevens’s head. Stevens then threw petitioner to the
floor. Bhut maintained that he was not
trying to strike Stevens when he swung at him.
A completely different version of
facts was advanced by Stevens, who said that Bhut never asked him to remove his
feet from the bench. Stevens said Bhut
pushed and kicked his legs off the bench. He claims that when he stood up,
petitioner stepped in front of him and caused the Coke drink to fall on
him. Co-workers separated them. Stevens said Bhut then returned a few minutes
later and Bhut came at him. Stevens
side-stepped with the pizza box, and the next thing he knew Bhut struck him in
the back of the head. Stevens said he
grabbed Bhut’s arm and the two men bounced off the locker and landed on the
floor with Stevens on top of Bhut.
Stevens said he never pushed the pizza box onto Bhut.
There was no dispute that Bhut
injured his shoulder in the fall. Bhut
filed a motion for medical and temporary disability benefits resulting in an
order for benefits in the amount of $15,583.54.
The respondent appealed the decision of the Judge of Compensation. Respondent argued that Bhut deliberately
struck Stevens leading to the fall, which caused the shoulder injury. As such, respondent argued that this was in
the nature of a deliberate assault, disqualifying Bhut from recovery.
The Judge of Compensation found
that the altercation between the two men arose during the fulfillment of work
duties or doing something incidental to that, namely eating lunch on premises. The Judge noted that there was no evidence of
hostilities between the two men outside work.
Therefore there was no personal animus between the two men. The Judge also rejected the argument that Bhut
intentionally assaulted Stevens. She
said that neither man had any willful intent to injure the other. She said, “The reactions of both Stevens and the petitioner were in response to
what each felt was aggressive behavior.”
She found Mr. Bhut credible in his testimony that he did not intend to
strike Stevens when he pushed the pizza box away from himself.
The Appellate Division affirmed the decision below. The Appellate Division viewed this as an injury arising from work tensions. The Court deferred to the Judge of Compensation on her findings of credibility of the witnesses and her finding that there was no intent by either man to deliberately hurt the other. She found that each man was trying to protect himself from the other.
This decision illustrates a number of important rules. First, the trial judge is in the best position to assess credibility of witnesses in factual disputes. Secondly, when a series of escalating tensions occurs, it is very difficult to find that one party deliberately assaulted the other party. This was not a case where an employee decided to assault a co-employee without prior provocation or tensions. The Judge viewed these facts as a series of two separate events minutes apart where each party saw the other as the aggressor and tried to defend himself. The decision of the Judge of Compensation made good sense, and the Appellate Division properly deferred to the Judge below on determination of credibility. Perhaps the case could have been viewed as one involving “horseplay.” That rule says that the victim of horseplay is always covered for injuries, and the aggressor may also be covered under certain circumstances.
Thanks to Rick Rubenstein, Esq. for bringing this case to our attention.
Most workers’ compensation awards in New Jersey are settled with a percentage of disability paid over time in weekly installments. These are called Orders Approving Settlements under N.J.S.A. 34:15-22. A smaller portion of settlements are paid in one lump sum under N.J.S.A. 34:15-20. This second category only applies when there is an issue of jurisdiction, liability, causation or dependency. Section 20 settlements are not available in compensable cases where there is objective evidence of permanent disability.
But are there times where a percentage award, for example,
of 40% permanent partial disability (240 weeks of benefits) can be paid out in
one lump sum instead of being paid out over four and a half years?
This is a question that this practitioner has been asked
many times. Let’s consider two examples:
1) An employee receives an award for an operated two-level fusion for 40% or $115,440 at 2018 rates. The employee gets a few weekly installments paid at a rate of $481 per week and then contacts the adjuster and asks, “Would you please forward the remaining checks to me in one lump sum, as I need to buy a house?”
Frankly, the carrier might want to close the case out and
get the payments off the books, as well as avoid the necessity of making
payments for the next four and a half years.
But is this permitted in New Jersey?
The answer depends on an understanding of the term “commutation,” which
refers to advancing future payments under an award.
N.J.S.A. 34:15-25 provides clear guidance on when a commutation can be done. First, only a Judge of Compensation can approve a commutation. Second, there must be an application by a party for a commutation. Third, the employer is entitled to a discount of 5% if the judge approves the commutation. Fourth, the Judge must find that this is in the best interest of the employer. The statute states that a commutation is only allowed “when it clearly appears that an unusual circumstance warrants a departure from the normal manner of payment.”
Now let’s consider a fairly common situation of a reopener
where the payments have not been fully made on the original order at the time
that the case is reopened.
2) An employee is halfway through payments on a 40% award with 120 weeks remaining and then files a reopener for additional treatment as well as additional permanent partial disability. The adjuster provides some initial treatment and then the parties and their counsel propose to accelerate the remaining permanency payments in one lump sum. Thereafter, they will execute a small Section 20 settlement on the reopener.
This proposal sounds appealing to both sides but it is
fraught with danger for the employer/carrier.
On the surface, the carrier may like the idea of concluding the original
award by making a lump sum payment of 120 weeks of benefits followed by a
Section 20 on the reopener, putting the whole case to bed at once. The employee may like it because he or she can
spend the money as he or she sees fit on a large purchase, take a special
vacation, or invest it and earn interest.
Not so fast, however, because this
too is a commutation since payments that were intended to be made over many
future weeks are now being paid in a lump sum. In order to do this, there must be an
application to the Judge for a commutation.
If the Judge rejects the commutation, then the remaining payments under
the original award must be paid weekly. Very few commutation applications are granted.
Why is this fraught
with danger for the adjuster, carrier, employer and defense counsel? The answer is that people may do foolish
things with large sums of money. Suppose
an adjuster were to issue a lump sum check for 100 weeks of future payments at
$400 per week for a total of $40,000 and then close the file? Suppose further that this employee gets the
lump sum check, goes to a casino and blows all the money in one evening. Next day the employee contacts his or her
lawyer, who discovers that there was an impermissible commutation. The attorney immediately files a motion to
require the employer/carrier to repay the entire award. Can the employer be required to pay twice? That depends on the powers of judges to assess
N.J.S.A. 34:15-25 does not contain references to penalties, so we have to look elsewhere for the powers of judges to penalize a party which violates the statute. In 2008 the Legislature passed several provisions in N.J.S.A. 34:15-28.2 to 28.4 designed to enhance penalty powers of judges. These sections provide that in addition to certain fines, the Judge can take “other action deemed appropriate by the Judge of Compensation.” Since workers’ compensation is social legislation, it would seem that a judge likely has the power to require the employer or carrier to repay the entire $40,000 where neither party filed an application for permission to make a commutation. At a minimum the judge could hold a hearing for contempt with referral to the Superior Court for contempt proceedings.
At this point, you may wonder why New Jersey has such strict rules on accelerating future payments? There are really two reasons. The Legislature intended workers’ compensation award payments to be a partial replacement for lost weekly wages. The statute states that permanency payments “are to be received by the injured employee or his dependents in the same manner in which wages are ordinarily paid.” That means weekly or biweekly. Permanency payments are not like damages in a civil action for pain and suffering.
Moreover, the Legislature has a strong conviction that weekly future payments are in the best interest of almost all employees in compensable cases because payments over time avoid the potential problem noted above of someone literally losing all the money at once.
A cardinal rule in workers’ compensation is that an employee cannot sue his or her employer in civil court for a work injury except for rare circumstances involving intentional harm. But what if the employee has two employers? Does that rule apply to both employers? The answer is yes, the rule applies to both employers, so the focus in many cases is on whether there really is an employer relationship to begin with. The case of Carabello v. Jackson Dawson Communications, Inc. and Transcend Creative Group,LLC, A-3294-17T3 (App. Div. March 26, 2019) provides some helpful insight on the requirements to establish “the second employer.”
Mr. Carabello worked for the New Jersey Sports and
Exposition Authority as a teamster truck driver. The NJSEA contracted with
Transcend and Jackson Dawson for a Mercedes Benz event at the Izod Center which
the NJSEA owned. Carabello was the only
forklift operator at the Izod Center during the event. NJSEA assigned him to operate the forklift to
unload the trucks of Transcend and Jackson Dawson Communications. Carabello was told to report to Jackson’s head
man for further instructions in securing the tent structure for Transcend and
The head man for Jackson instructed Carabello to transport
barrels filled with water using the forklift.
Carabello proposed that it might be wiser to transport the barrels while
they were empty but that suggestion was not followed. While loading the filled barrels on the
forklift, two barrels fell off. As
Carabello moved the last of sixteen barrels off the forklift, he felt a pop in
his shoulder. His injury was promptly
reported to the NJSEA, and the NJSEA paid workers’ compensation benefits.
Carabello then attempted to sue Transcend and Jackson Dawson
for negligence in a third party action.
Jackson and Transcend argued in essence that Carabello could not bring a
civil suit against them because he was their “special employee.” The trial judge agreed and barred the civil
suit, leading to an appeal by Carabello.
In his appeal, Carabello argued that the five-pronged test of a special
employee did not apply to his situation.
First, he argued that there was no express contract between
Carabello and Transcend and Jackson.
Second, he argued that he was doing the work of the NJSEA. It was on NJSEA property. The Appellate Division agreed with Carabello
on both of these points.
Next, Carabello argued that his work was not controlled by
Jackson and Transcend. The Appellate
Division said this point was unclear.
NJSEA told Carabello to use the forklift to help the exhibitors set up
the event. Jackson and Transcend told
him to move the filled water barrels to help secure their tent. On balance, the Court felt that NJSEA really
controlled the work. “Plaintiff testified the scope of his
employment for NJSEA included helping production personnel with event setup,
which involved operating the forklift and assisting others during the
Fourth, Carabello argued that he was paid by NJSEA. The Court noted that Transcend and Jackson
paid a fee for operation of the forklift, but they did not pay Carabello’s
Lastly, Carabello argued that he could not be fired by any
entity other than the NJSEA. The Court
agreed that the license to produce the exhibition at the Izod center did not
provide Jackson and Transcend with the authority to hire or fire
For these reasons, the Appellate Division reversed and allowed Carabello to sue Jackson and Transcend in a civil suit for their alleged negligence in contributing to his shoulder injury. One key distinction between this case and other special employee cases involving assigned nurses is that Carabello was working on NJSEA property when he was injured. In many of the nursing cases where special employment status is found, the nurses work on hospital property under direct control of the hospital.
Thanks to Rick Rubenstein, Esq. for bringing this case to our attention.
It can be challenging to prove that a fairly common cancer occurring frequently in the general population is work related. The case of Proscia v. Advanced Biotech, A-3017-17T2 (App. Div. April 26, 2019) offers interesting guidance on how an injured worker can prove such a case.
Frank Proscia worked for Advanced
Biotech (AB) from 2005 until 2013. The
company manufactures and sells natural flavor ingredients. During his employment, there was occasional
flooding in his work site in Paterson, N.J.
When that occurred, he would wear waders to walk through space to secure
manufacturing materials, which included drums filled with chemicals. He would examine and sample many containers
when they arrived and supervised pouring of chemicals by others. His desk was 15 feet away from the sealed-off
storage room where drums of chemicals were stored.
Petitioner testified that there
were multiple spills of hazardous chemicals over the years he worked at
AB. The chemicals would adhere to his
skin and clothing. There was one spill
of acetic acid in February 2011. That caused petitioner to be hospitalized on
account of breathing problems at work.
He left AB in October 2013. Two
years later, petitioner was diagnosed with colorectal cancer, and he filed a
claim petition alleging that his work exposures either caused or contributed to
A key fact in this case was that the expert for each side agreed that
there were about 1,000 chemicals to which petitioner was likely exposed, and
several of those chemicals were suspected carcinogens.
The petitioner’s expert testified
that Acetaldehyde and Diacetyl are carcinogenic, and they were two of the
chemicals to which petitioner was exposed.
In fact, petitioner’s expert said that Acetaldehyde is a Class One
Petitioner’s expert provided statistical information on colorectal cancers, noting that 11 to 15 percent of such cancers are related to workplace chemical exposures. The expert added that petitioner, who was 42 years of age at the time, could not return to work due to his stage three or four cancer. He said that his cancer was not yet at maximal medical improvement and petitioner required more treatment.
AB’s expert disputed the testimony
that Acetaldehyde causes cancer. AB’s
expert said that there were no studies establishing such a causal
relationship. The Court noted that respondent’s
expert was an oncologist. The Court
noted that petitioner’s expert was qualified in the field of environmental and
occupational health medicine. Respondent’s
expert did agree that some of the chemicals to which petitioner claimed
exposure were carcinogenic.
The Judge of Compensation found
that it was more probable than not that petitioner’s exposure on the job caused
his cancer. The Judge ordered further
temporary disability benefits as well as further medical treatment. AB
The Appellate Division first
observed that petitioner did not have to prove direct causation; aggravation or
exacerbation of a condition is sufficient.
The Court also commented that the Judge of Compensation is in the best
position to weigh the credibility of the expert’s testimony. “He
could, at his option, decide to give petitioner’s expert testimony greater
weight than the expert who testified on behalf of AB.” For these reasons,
the Appellate Division affirmed the ruling in favor of petitioner.
Petitioner had several key
advantages at trial. First, the experts agreed that some of the chemicals to
which petitioner was exposed were carcinogenic.
Second, petitioner proved by his testimony that he had likely exposure
to certain chemicals. Respondent did not present lay testimony disputing
anything petitioner said on exposure. That left no real dispute that there was
serious exposure to chemicals.
The Judge of Compensation seemed to accept that the two named chemicals were carcinogenic. There was nothing in the Appellate Division record showing that respondent offered medical articles debunking any relationship between Acetaldehyde and cancer. Under these circumstances, petitioner made out a very strong case. For respondent to win in a difficult case like this, its expert needed to offer into evidence persuasive scientific evidence based on medical literature establishing that there is no known causal relationship to colorectal cancer. Alternatively, respondent needed to contest the alleged exposure through lay testimony.
In a difficult case like this, the best argument that respondent had was that its expert was far more qualified than that of petitioner to give an opinion on causation, as only respondent’s expert was an oncologist. There is nothing in the appellate decision addressing that point, however, so it is hard to tell if that was argued.
There are few cases in the Division involving assessments of penalties against an employer for late payment of a settlement. Ramella v. Borough of Seaside Heights, A-3310-17T3 (App. Div. April 8, 2019) is therefore of interest to practitioners.
The petitioner, Shirley Ramella,
brought a dependency claim against the Borough and its various workers’
compensation carriers alleging that her husband died from work-related chronic
obstructive pulmonary disease due to alleged exposure to asbestos during his
15-year employment. The total settlement
against all carriers was $50,000, but the Borough itself agreed to pay $7,500
on a Section 20 basis for a period in which its insurance coverage was in
dispute. An order was entered on August
15, 2017 against the Borough.
Public entities need vouchers
before they can make payment, and a voucher was mailed to Shirley Ramella on
August 22, 2017, one week after the order was signed. Mrs. Ramella did not sign or return the
voucher for months. The Borough’s
counsel reached out to Mrs. Ramella’s counsel seeking the signed voucher. In
January 2018, Mrs. Ramella executed the voucher and returned it to the
Borough. The Borough then promptly paid
the $7,500 once it received the signed voucher.
In the days immediately prior to
the return of the voucher by Mrs. Ramella, her attorney moved to enforce the
August 15, 2017 order. By the time the
motion was listed in workers’ compensation court, the order had been paid.
The Judge of Compensation conducted
no formal hearing and took no testimony.
The Judge found that the Borough should have prepared the voucher during
the years that the case had been litigated. The Judge made no findings of fact
concerning Mrs. Ramella’s failure to sign the voucher, nor her attorney’s
failure to inquire about it, nor the promptness of payment by the Borough once
it received the signed voucher. Instead, the Judge entered an order on February
20, 2018 assessing a $5,000 penalty against the Borough payable to the Second
Injury Fund, plus $500 to her attorney.
The Borough appealed the penalty
order, and the Judge later denied the Borough’s motion for reconsideration and
a stay. The Appellate Division began by noting (incorrectly) that there is no
statute establishing a specific timeframe for payment of workers’ compensation
settlement proceeds. Actually, N.J.S.A.
34:15-28 states: “Whenever lawful
compensation shall have been withheld from an injured employee or dependents
for a term of 60 or more days following entry of a judgment or order, simple
interest on each weekly payment for the period of delay of each payment may, at
the discretion of the division, be added to the amount due at the time of
settlement.” This statute was not
mentioned in the decision but the Court did discuss another section dealing
with penalties for failing to comply with orders generally.
The Appellate Division proceeded to
observe that N.J.A.C. 12:235-3.16(e) requires a Judge to hold a hearing before assessing
a penalty for failure to comply with an order.
The Court was critical of the Judge of Compensation for failing to hear
any witnesses or place documentation in the record supporting the reasons for
The Court focused on N.J.S.A.
34:15-28.2, which states that a Judge of Compensation may assess a penalty for
failure to comply with a court order not to exceed 25% of moneys due for
unreasonable payment delay and to impose a penalty of up to $5,000 payable to
the Second Injury Fund. The Court said,
“Here, it was entirely reasonable for the
Borough to send Shirley a voucher for her signature. . . We do not agree with
the judge’s observation that the Borough could have prepared the voucher and
secured Shirley’s signature during the eight years that her amended claim
petition was pending.” The Court commented that this was a contested
matter, and there was no reason for the Borough to prepare a voucher during the
contested period of the case.
The Court reversed the award of the penalty and the award of counsel fees. It said: “Finally, the judge did not consider the inaction of Shirley and her counsel after her receipt of the voucher, the affirmative acts of the Borough’s counsel in seeking Shirley’s signature, or his client’s prompt payment once it obtained the signed voucher, when deciding whether a penalty was warranted.”
The facts of this case were unusual because the petitioner in this matter did not return for months a signed voucher that was sent to her one week after the settlement. The use of a voucher does not occur in private sector settlements. But this case is still important because it shows that judges need to conduct a full hearing with testimony from the parties before assessing penalties under the statute.
Petitioner Joan Haggerty worked for Cape May Regional Medical Center (Crothall Service Group). She tore her left rotator cuff and bicep tendon while working as a housekeeper. Months later she injured her neck and left shoulder making a bed and stretching sheets. She filed a workers’ compensation claim for each injury and later amended the left shoulder claim to include an overuse claim of the right shoulder. She had two surgeries on the left shoulder and one surgery on the right shoulder.
Petitioner obtained an order for medical and temporary
disability benefits in 2015 approving treatment with Dr. Matthew Pepe. He referred petitioner to Dr. Peter Corda for
pain management, who in turn referred petitioner to Dr. Charles Krome. Four
platelet rich plasma injections were recommended by Dr. Krome.
The issue in the case arose when it became clear that the
platelet rich injections did not help petitioner. Dr. Krome then recommended stem cell treatment for the right
shoulder. He felt that this would be a
conservative measure but petitioner would still likely require total shoulder
replacement surgery in a few years.
Petitioner then filed an amended motion to compel respondent to pay for
the stem cell therapy. Respondent
opposed the motion by noting that the stem cell treatment was not approved by
the U.S. Food and Drug Administration (FDA).
Because the judge had questions for Dr. Krome, the judge
called the doctor from his chambers on May 4, 2018 in the presence of both
counsel. The judge asked several
questions, but neither counsel asked any.
At the next listing of the case on May 25, 2018, petitioner testified
that she did not want another shoulder surgery.
She needed to work in order to care for her terminally ill husband. She said she knew that the stem cell therapy
was not FDA approved but she wanted to undergo it. She said she was also aware
that it might only provide temporary relief.
Following petitioner’s testimony, the Judge of Compensation
issued an order requiring respondent to provide the stem cell treatment. The judge commented that Dr. Corda wrote a
letter stating that this treatment was widely used in professional sports. The judge also observed that respondent did
not provide any expert report addressing this issue. Finally, the judge found Dr. Krome to be
On appeal Crothall argued that it was error to determine
credibility of a physician based on an unrecorded phone call without formal
testimony. Crothall also argued that the
treatment was not sufficiently accepted in the scientific community.
The Appellate Division observed the rules on motions for
medical and temporary disability benefits, noting that respondent’s counsel had
raised a defense that the treatment was not FDA approved. “Under
the regulations, the judge was required to hold a hearing where Crothall could
The Court also questioned the validity of using a phone call
to a physician as a basis to determine credibility. “Even if credibility could be determined in that manner, without a
record there is no ability to review what was said.” The Court said that
when an important issue is discussed in chambers, “a record must be made or a summary placed on the record of what
transpired in chambers.”
The Appellate Division held that the procedures in chambers “lacked fundamental due process.” The Court was critical of the failure to record the testimony of Dr. Krome and the failure to allow respondent’s counsel to cross examine the doctor. For these reasons the order was reversed, and the matter was remanded.
The case can be found at Haggerty v. Crothall Service Group, A-4478-17T4 (App. Div. May 3, 2019). This case reminds us that due process applies to proceedings in workers’ compensation court and that fundamental fairness to both parties is the lodestar of court proceedings. The Appellate Division never ruled on whether stem cell treatment can be ordered but rather focused solely on the fairness of the process in the Division proceedings.