Employer May Be Entitled To Offset For Overpayment Of Benefits To Petitioner

Adam Weiner worked for the Elizabeth Board of Education and received an award of 100% total and permanent disability on October 18, 2000.  That entitled him to $480 per week for 450 weeks and thereafter.  That award was reduced on January 9, 2001 to $340.98 per week due to the social security disability offset rate.

The key development in this case occurred on April 1, 2002, when Mr. Weiner began receiving an ordinary disability pension benefit.  He did not disclose his receipt of ordinary disability pension benefits to the Board of Education, so the Board kept paying him $340.98 per week. 

On April 29, 2010, the Board sought approval to access Mr. Weiner’s pension records to determine if it was entitled to an offset.  On August 10, 2011, Weiner and the Board entered into a consent agreement, reducing Weiner’s disability rate going forward to $222.39, but there was no agreement on past overpayments of $57,753.33.

This action was filed by the Board to obtain reimbursement for the overpayments between April 1, 2002 through August 10, 2011, totaling $57,753.33.   A hearing took place on August 1, 2012, and on August 29, 2012 the Judge of Compensation denied the Board’s motion for reimbursement based on the conclusion that petitioner did not have the ability to repay the funds.  The Board of Education then appealed.

The Appellate Division was guided by the principle that “an underlying theme of the workers’ compensation law is that there should not be duplicative payments for the same disability” (citing Young v. Western Elec. Co., 96 N.J. 220, 231 (1984)).  The Court said that there is a two-step process: first, the Judge of Compensation must determine if petitioner was unjustly enriched for which the respondent has the burden of proof.  Second, the respondent can then “institute enforcement proceedings in the Law Division . . . which may be treated as a summary proceeding.” Hajnas v. Engelhard Mineral & Chemical Co., 231 N.J. Super. 353, 363 (App.Div. 1989). 

The Court said, “It is considered unjust enrichment to permit the recipient of money paid under mistake of fact to keep it, unless the circumstances are such that it would be inequitable to require its return.” (citations omitted).  In this case, the Court felt that the Judge of Compensation did not take a detailed look at the ability of the petitioner to make reimbursement payments.

No evidential hearing was held.  The compensation judge’s finding that Weiner was unable to repay the money, and therefore, that it would be inequitable to order reimbursement, was supported solely by ‘several years of his Individual Income Tax Returns, the most recent of which shows an annual salary of $17,295 for 2010.’ No statement of assets and liabilities evincing Weiner’s net worth was produced.  Further, no statement of income and expenses was considered by the judge of compensation.

The Court reversed and remanded for further proceedings.  “We will not indulge in hypothetical speculation of a net worth which would support the immediate return of the payments, which all parties agree, should never have been made to Weiner. Nor will we reach a conclusion based on incomplete facts concerning whether, after considering Weiner’s income and expenses, a payment plan would be appropriate.”

This case can be found at Weiner v. Elizabeth Board of Education, A-0627-12T2 (App. Div. July 15, 2013).  It is an important case for employers for a number of reasons.  The Appellate Division endorses the right of the employer to obtain reimbursement of benefits that are overpaid to the petitioner, including payments from a disability pension.  It is also important because the situation in this case is rather common, namely that someone receiving workers’ compensation later obtains a disability pension without that information ever getting to the employer or carrier on a timely basis.  Lastly, the case is significant because it sets forth specific requirements for each party in an unjust enrichment claim.

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This blog article was researched and written by John H. Geaney, a member of the executive committee and equity partner at the law firm of Capehart Scatchard. The content of the this article is intended to provide general information on the topic presented, and is offered with the understanding that the author is not rendering any legal or professional services or advice. This article is not a substitute for legal advice. Should you require such services, retain competent legal counsel.

Employer May Be Entitled To Offset For Overpayment Of Benefits To Petitioner

Appellate Court Approves Dismissal of Firefighter’s Occupational Knee Injury Claim

John Machiaverna worked for the City of Newark as a firefighter since 1988.  He filed a workers’ compensation claim for his left knee in 2008, alleging that repeated work stressors over many years caused extensive knee problems and a need for knee replacement surgery in May 2007.  He contended that his knee problems were due to regular climbing of extension ladders and stairs, crawling through buildings and carrying people out of buildings.  The City denied the claim and put petitioner to his proofs.

During the testimony at trial, petitioner was asked if he had ever suffered any injuries in his work career.  He testified that he had no previous injuries to his knee or hip.  That testimony fell apart on further questioning.  He then admitted that he injured himself in 2002 when a piece of sheetrock gave way during a fire, causing injury to his left leg. He next admitted on cross examination that he had arthroscopic surgery on his left knee in April 2002.

The petitioner was seen by four IME doctors, two for each side.  The Court noted that he “lied to all four doctors who examined him because he failed to disclose his prior left knee injuries.”  The Judge also commented that he initially failed to admit to having prior knee surgery in April 2002 and failed to admit two incidents in 2001.  The IME doctors testified in court, and their testimony was critical in proving fraud.

Dr. Canario for respondent said that petitioner had not told him about a previous surgery to his left knee in 2002.  In the opinion of Dr. Canario, petitioner’s size and weight were major factors in his knee problems.  Petitioner was six foot five inches tall and weighed 345 pounds.  Dr. Wong for petitioner stated in testimony that petitioner had not told her about his 2002 knee surgery.  Dr. Kulkarni for petitioner also said that petitioner had not told him about three prior knee injuries. 

The Honorable Theresa Yang, Judge of Compensation, found that petitioner was not a credible witness.  She held that in concealing his prior knee injuries and surgery, petitioner committed fraud as defined by the New Jersey Fraud Act, N.J.S.A. 34:15-57.4.  She therefore dismissed the case.

On appeal, petitioner argued that his due process rights had been violated because he was “deprived of the opportunity to defend himself against the court’s allegations of fraud.”  The Appellate Division categorically rejected that position.  “There was sufficient evidence to support Judge Yang’s credibility assessments and her determination that a violation of N.J.S.A. 34:15-57.4 (c) (1) had occurred.”  The Appellate Division held that petitioner failed to prove an occupational claim. 

This case is important because it shows that Judges of Compensation are following the statutory law under the New Jersey Fraud Act.  It is not necessary for an employer to prove a claimant was working while on temporary disability benefits to establish fraud.  That is just one issue in a fraud case.  If a claimant deliberately misrepresents or conceals prior medical information that is relevant to the claim, that in itself constitutes fraud.  The case also shows how important it is for defense counsel to get prior records, whether attacking credibility or attempting to prove fraud.

The case can be found at Machiaverna v. City of Newark, A-5848-11T3, (App. Div. July 18, 2013). 

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This blog article was researched and written by John H. Geaney, a member of the executive committee and equity partner at the law firm of Capehart Scatchard. The content of the this article is intended to provide general information on the topic presented, and is offered with the understanding that the author is not rendering any legal or professional services or advice. This article is not a substitute for legal advice. Should you require such services, retain competent legal counsel.

Appellate Court Approves Dismissal of Firefighter’s Occupational Knee Injury Claim

The “General Employer” Is Immune From Civil Suit From An Employee Loaned To A “Special Employer” In New Jersey

In December 2006, Bobby Robinson was injured working at a construction site in Asbury Park, N.J. when a jack hammer “kicked back” and knocked him off a ladder.  He filed two workers’ compensation petitions:  one against Tishman Construction Corporation and the other against Air Joy Heating and Cooling, Inc.  The two companies asserted joint responsibility for workers’ compensation benefits and an order approving settlement was entered in the Division of Workers’ Compensation.

During the receipt of workers’ compensation benefits, Robinson also brought a civil suit against Tishman Construction Corporation (hereinafter “Tishman”).  Tishman filed an answer to the complaint contending that Robinson’s suit was barred by the exclusive remedy provision of N.J.S.A. 34:15-8, which prohibits civil suits against employers except in the case of intentional harm.  The question before the court was whether Tishman was in fact Robinson’s employer.

The construction site in Asbury Park was owned by Paramount Homes, which wanted to build three residential units on its property.  Paramount contracted with Tishman to provide administrative and supervisory staff for the site and to monitor labor levels and equipment, as well as manage trade contractors.  Tishman then entered into a contract with Air Joy as the HVAC subcontractor for the site.

Air Joy’s job was to install exhaust vents by cutting out duct openings in the exterior walls.  However, Air Joy could not use its own employees to do this.  The Local 595 Laborers Union (Local 595) claimed this project, and since Air Joy did not have any contract with the Union it could not hire union employees directly.  Air Joy relied on Tishman to do this because Tishman was a signatory to the labor union.  Air Joy would tell Tishman’s construction superintendent how many laborers were needed, and then Tishman would provide the laborers through the union.

Robinson was told to report to the construction site in August 2006.  He reported to Kenny, the Air Joy foreman.  Robinson said that while on the site Air Joy employees directed his work.  However, he submitted his time sheets to Tishman’s labor foreman.  Tishman employees gave the final sign-off on the time sheets before sending them to payroll.  Tishman paid Robinson directly and then charged Air Joy back for his wages.  The payor on the checks was Tishman.  Before he received a paycheck, Robinson would have to show his Social Security card and driver’s license to the appropriate individual at Tishman. 

Tishman’s project foreman testified that Robinson worked for Air Joy on loan from Tishman.  Tishman’s project foreman patrolled the site for safety issues and checked on employees.  Tishman retained the right to fire union workers and had exercised such power in the past.  When Robinson was injured, a Tishman employee called the ambulance that took him to the hospital, and Tishman filled out the accident investigation report.

The trial court found that Tishman was Robinson’s general employer and Air Joy was its special employer.  That gave both companies immunity from civil suit.  The Court of Appeals affirmed that decision, noting that both companies shared in responsibility for the workers’ compensation claim. The Court said that it was clear that Tishman was a general employer.  “There was an implied contract of hire based upon the fact that plaintiff’s services were procured by Tishman through his union, he performed work, and was paid.  Tishman paid his wages.  Tishman had the right to control the work and the power to both hire and discharge him. Tishman was plaintiff’s employer and is entitled to the immunity provided by the Act.”

This case shows that employers benefit from joint employer situations such as general and special employer relationships. Both the general and special employer are entitled to immunity from civil suit in the case of injury to a borrowed employee.  The case may be found at Robinson v. Tishman Construction Corp. of New Jersey, A-1370-11T4 (App.Div.June 28, 2013).

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This blog article was researched and written by John H. Geaney, a member of the executive committee and equity partner at the law firm of Capehart Scatchard. The content of the this article is intended to provide general information on the topic presented, and is offered with the understanding that the author is not rendering any legal or professional services or advice. This article is not a substitute for legal advice. Should you require such services, retain competent legal counsel.

Fitness-For-Duty Exams in Workers’ Compensation

The words “fitness for duty” do not appear in the New Jersey Workers’ Compensation Act, but the issue is of paramount importance to employers and employees in many workers’ compensation cases.  In New Jersey the need for a fitness exam is often compelling because medical and temporary disability benefits end at maximal medical improvement often without any comment from the treating physician about whether the employee can return to work.  When workers’ compensation benefits end, the focus often turns next to whether the employee can return to work and perform the essential job functions.  This is not for the Judge of Compensation to decide in New Jersey.

When can an employer require a fitness-for-duty examination in a workers’ compensation setting?

Practitioners must differentiate between employees who are out of work and employees who are working.  When an employee seeks to return to work following a workers’ compensation absence and there are restrictions imposed by the treating doctor, a fitness-for-duty exam is appropriate.  In fact, New Jersey physicians often seek guidance from FCEs, functional capacity examinations.  In contrast, when an employee with a workers’ compensation claim is working, an employer cannot request a fitness exam absent a business reason. A medical evaluation of an employee can be required by an employer under the Americans with Disabilities Act and under state disability law. The ADA standard is “job related and consistent with business necessity.” 42 U.S.C. 12112(d)(4).  In other words, the employer must have a legitimate reason to require an existing employee who is working to attend a fitness exam.  Examples might be if the employee is expressing difficulty or pain on the job, is limping while working, or is asking for accommodations.

It is important to appreciate differences between the New Jersey Workers’ Compensation Act and laws in other states.  Many states have a requirement for vocational rehabilitation.  New Jersey does not.  Awards for partial permanent disability in New Jersey are not generally dependent on how long an employee has been out of work but on the level of functional loss in the injured body member.  New Jersey compensation law does not provide job protection, except against retaliation for filing a workers’ compensation claim.  Temporary disability benefits and medical benefits end at maximal medical improvement in New Jersey.  Whether the employee returns to work may not matter all that much as far as the outcome of a workers’ compensation claim but it matters to the employee and employer for obvious reasons.

Workers’ compensation cases suddenly merge into labor law at the return to work stage.  It is outside the power of a Judge of Compensation to order an employer to return an employee to work.  However, employees have rights under the Americans with Disabilities Act, the Family and Medical Leave Act, and the New Jersey Law Against Discrimination that impact on return-to-work status.  Many workers’ compensation claimants are covered under the ADA and NJLAD but these laws do not automatically mean the employee must be reinstated.  An employee with a disability must be able to perform the essential functions of the job with or without reasonable accommodation.

How then do employers decide whether an employee who has been out of work with a serious injury is fit for duty?

Medical and legal guidance is crucial.  From a medical vantage point, employers can reach out to treating doctors, occupational physicians or physiatrists for advice on fitness for duty.  As mentioned above, FCEs are a wonderful tool that provide objective and scientific information about ability to perform essential functions. For this reason, treating doctors routinely ask for FCEs before giving opinions on restrictions and ability to perform job duties. From a legal standpoint, it is important to consider the application of disability and leave laws that may apply.

            Here are some common traps that employers fall into in fitness assessments:

            * The Ambivalent Treating Doctor Syndrome

 Quite often the treating doctor imposes serious job restrictions that carry on for many months.  There may be severe restrictions against lifting, bending, reaching and performing other physical functions. Light duty may be offered. After maximal medical improvement is reached and compensation benefits end, the employee will often contact the employer to return to work. When the employer expresses concerns about the medical restrictions, a short note may suddenly appear from the treating doctor removing all restrictions.  This stunning turn of events leaves employers shaking their heads.

            * The “Wing It” Return-To-Work Note

 New Jersey is blessed with highly skilled surgeons in the workers’ compensation arena.  However, surgeons are not always the best choice when it comes to deciding whether the employee can do a particularly difficult job.  A good fitness-for-duty examination requires time, information and medical expertise.  The job description must be read and considered, and the physician must speak with the employee about job duties.  In addition, FCEs should be analyzed to see that the testing reflects the actual job duties to be performed. Cryptic medical notes following a serious surgery stating, “Bill may return to work full duty” without analysis or any indication that job description has been analyzed are more often than not “wing-it” notes.  There are risks to the employee who is returned to a job that he or she cannot safely perform, and a well-intentioned “wing-it” note can do more harm than good.

            * Reflexively Turning to Treating Doctors

When it comes to assessing fitness for duty, the best choice is generally an occupational physician or physiatrist who specializes in this area of medicine and has an understanding of reasonable accommodation requirements. These experts often have training in biomechanics and are willing to expend the time it takes to fully appreciate the job duties and consider possible accommodations. There is simply no substitute for thorough analysis. The idea that fitness assessment is as simple as scribbling on a note pad could not be further from the truth.  Yet all practitioners continue to see treating doctors hurriedly write “full duty” without any analysis at all of the job requirements or previous restrictions.

            * Asking the Comp Adjuster Whether the Employer Must Reinstate

 This is also a very common mistake that employers make in New Jersey.  The reason this happens is that many employers erroneously think that return-to-work issues are decided in comp court.  Almost every adjuster has been asked more than once for advice from an employer on whether the employer can terminate or must reinstate.  This is a complex medical/legal inquiry with significant labor law implications that should be put to house counsel or outside counsel for guidance.

Developing a return-to-work team is the best solution. There is an important role on this team for counsel, HR managers, claims professionals, supervisors, nurse case managers, and medical experts.  It is a fact of life that many employees post-injury cannot return to their former job while many others can and should be reinstated.  The process is complex but can be handled effectively with a consistent and comprehensive approach.

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This blog article was researched and written by John H. Geaney, a member of the executive committee and equity partner at the law firm of Capehart Scatchard. The content of the this article is intended to provide general information on the topic presented, and is offered with the understanding that the author is not rendering any legal or professional services or advice. This article is not a substitute for legal advice. Should you require such services, retain competent legal counsel.