Capehart Attorney Moderates Panel Discussion at National Conference

Mt. Laurel, NJ – – Capehart Scatchard Executive Committee Member, John H. Geaney, Esq., recently moderated a panel discussion on “Controlling Medical Costs In Workers’ Compensation/Pain Management” at the Fall Conference of the National Workers’ Compensation Defense Network in Hartford, Connecticut.

A seasoned workers’ compensation practitioner for over 31 years, Mr. Geaney, a Moorestown resident, is the author of Geaney’s New Jersey Workers’ Compensation Manual and A Guide to Employment Issues Under the ADA & FMLA co-distributed by the Firm and the New Jersey Institute for Continuing Legal Education.  Mr. Geaney concentrates his practice in the representation of employers in workers’ compensation defense matters, the Americans with Disabilities Act, and the Family and Medical Leave Act.

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New Jersey Voters Pass Constitutional Amendment Increasing State Minimum Wage

This past election, an overwhelming majority of New Jersey voters approved a constitutional amendment that will increase the state minimum wage by $1.00 to $8.50 an hour. Along with this increase in minimum wage that goes into effect on January 1, 2014, the newly ratified amendment also includes the potential for an annual automatic cost of living increase, to be assessed each September 30th, based upon any increase in the Consumer Price Index for all urban wage earners and clerical workers (“CPI-W”) as determined by the federal government. Moreover, should the federal minimum wage increase in any amount, the amendment further mandates that the state’s wage rate likewise be increased to match the federal minimum wage rate.

With the passage of this amendment, New Jersey is now the fifth state nationally with a constitutional provision concerning minimum wage rates; Florida, Colorado, Nevada and Ohio are the others, all of which have similar provisions requiring automatic increases as here in New Jersey. Even with the upcoming increase in minimum wage, New Jersey will not have the highest state minimum wage rate. That distinction still belongs to Washington state with a $9.19 an hour minimum wage.

Regardless of whether you were an employer who supported the minimum wage amendment, it is now the law in New Jersey and all employers on January 1 will need to comply with it. Since this compliance date is just around the corner, it is important that employers take steps now to insure that current payroll practices are in line with this new minimum wage requirement when it goes into effect. It is likewise important that every employer in the state pay close attention to any potential annual changes that may be made to the rate each time a review is conducted on September 30th based upon the  CPI-W.

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Emotional Distress Claim Against Public Entity Must Satisfy Tort Claims Act

By: Betsy G. Ramos, Esq.

In the recent unpublished Appellate Division decision, Mann v. Walder, Docket No. A-0863-11T1, decided October 31, 2013, the Court ruled that the plaintiff’s claim for negligent infliction of emotional distress against three New Jersey State Park police officers and the State of New Jersey was governed by the New Jersey Tort Claims Act (“TCA”) N.J.S.A. 59:1-1 et seq. and that the plaintiff failed to satisfy the requirements of the Act. Thus, the Court upheld the dismissal of this suit.

This matter arose from the fatal shooting of Emil Mann, which was witnessed by his nephew, Carl Mann, the plaintiff in this case. As a result, he claimed emotional damages and sued the three officers involved in the shooting and the State Police.

The plaintiff, however, suffered no physical injuries. His medical expenses incurred only totaled $187. In support of his claim, he submitted an expert report from a physician, opining that he suffered from uncomplicated bereavement and maladaptive health behavior (overeating), affecting his general medical condition, which was secondary to his bereavement. However, the plaintiff was able to graduate from high school, sleep adequately at night without nightmares, was able to perform his job at T.J.Maxx, and, although he continued to distrust police officers, his fear of them had receded.

The issue in this case was whether he had suffered a permanent injury and had incurred related medical expenses that exceeded $3,600, both threshold requirements to maintain an action under N.J.S.A. 59:9-2(d). While the Court had previously ruled that emotional distress could constitute “pain and suffering” under the TCA, an emotional distress claim is barred unless the plaintiff suffered a permanent loss of a bodily function, permanent disfigurement or dismemberment where the medical treatment expenses exceeded $3,600.

The Court noted that case law permits recovery of damages from emotional distress if subjective symptoms are accompanied by “the requisite indicia of permanent physical infirmity.” Here, the plaintiff contended that his weight gain from 250 to 350 pounds was a physical manifestation of permanent injury. However, the Appellate Division ruled that this weight gain did not rise to the level of a permanent loss of a bodily function.

Further, the plaintiff failed to meet the monetary threshold of $3,600. The plaintiff argued that the value of the services he received and will need in the future exceeds that amount. Because his expenses were reduced due to payment by Medicaid, he argued that his claim on this ground discriminates against him because he is poor. The Appellate Division seemed skeptical of this argument and, regardless, noted that there was no evidence submitted as to the value of the services received.

This case is illustrative of both the permanency and monetary threshold requirements for all personal injury claims submitted under the Act. Especially if there is no physical injury, an emotional distress claim must be scrutinized closely to determine if it satisfies the TCA’s permanency requirement. Additionally, all claims should be examined to determine if they satisfy the monetary threshold. Usually, the monetary threshold is not an issue but for an emotional distress claim or other claims such as a simple fracture with no physical therapy or a laceration with a scar but no future scar revision, the plaintiff may not satisfy this threshold.

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Case Win: Gerald L. Hallquist vs. E.I. Dupont de Nemours

Client:  E.I. Dupont de Nemours

Case tried by Stephen T. Fannon

The decedent, Gerald L. Hallquist, initially filed an inter vivos claim alleging that his occupational exposure to chemicals, primarily benzene, caused multiple myeloma (a hematological cancer). Following his death, the decedent’s wife filed a dependency claim. Respondent filed Answers to both claims denying compensability and reserving all defenses.

Prior to Mr. Hallquist’s death, his de bene esse deposition was taken and focus was placed on the alleged occupational exposure. The decedent was employed as a laboratory technician for respondent from 1968 to 1998. However, the decedent’s own testimony provided he only worked with the material alleged to have caused his cancer between 1977 and 1982. The decedent testified that respondent had a strict policy in place that required myriad safety procedures while handling materials. Employees who violated said procedures were subject to punishment, including discharge.  The decedent’s description of how the materials were tested in his workplace, along with his description of the safety/venting devices in the room, made it impeccably clear that there could not have been any actual exposure, meaning actual physical contact permitting absorption into the body. Furthermore, the decedent never testified as to the number of times or on what type of basis he was allegedly exposed to any chemicals with which he worked, including benzene. Finally, the decedent’s testimony did not proffer any evidence of specific exposure to benzene on which to base causal relationship. The decedent’s wife also testified in this matter, but strictly as to issues of dependency.

Following the decedent’s testimony, petitioner’s attorney’s settlement demand was $200,000.00 under Section 20. Respondent decided to continue with trial.

At trial, the main issue was whether the decedent’s alleged exposure to benzene caused his multiple myeloma.  Dr. Shanna Clark, PhD testified on respondent’s behalf and was admitted as an expert in the field of toxicology and cancer causation. Dr. Clark testified that the world literature quite simply has not found a confirmed causal link between benzene exposure and multiple myeloma.  Dr. Clark also testified that based upon her review of the decedent’s deposition, she could not conclude that the decedent’s specific multiple myeloma was in any way related to benzene exposure or any other exposure during the decedent’s employment for respondent.  Alternatively, petitioner’s expert, Dr. Leon Waller, testified that he is a primary care doctor, with no subspecialty in hematology or oncology.  On cross-examination, Dr. Waller admitted he could not recall precisely how long the decedent worked for respondent and admitted that he had no independent personal recollection of the decedent’s deposition as to the specifics of his benzene exposure, including chronicity or intensity.

Dr.Waller provided a net opinion not grounded in any scientific research and unsupported by his own submitted article on causation.

Following testimony, both sides submitted legal briefs.  Respondent’s brief emphasized that petitioner failed to meet her burden of proof in proving causal relationship between the decedent’s multiple myeloma and his alleged benzene exposure. The Judge agreed and found the testimony of respondent’s expert to be more credible. The Judge ruled that the world literature supports a lack of a confirmed causal link between the condition and the chemical. The Judge also held that petitioner failed to prove the decedent was sufficiently exposed to benzene, which might have caused his condition. Accordingly, the petitioner’s claim was dismissed in its entirety.

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Case Win: McQuaid v. Camden Board of Social Services

Client:  Camden Board of Social Services

Case tried by Stephen T. Fannon, Esq.

Petitioner, a security guard, filed a claim alleging that on October 1, 2009, he slipped and fell on a sidewalk at an entranceway, resulting in numerous orthopedic injuries. Respondent denied the allegations of petitioner’s claim on the grounds that petitioner fell while on his way to work on a public sidewalk that was neither owned nor controlled by respondent.  Respondent filed a Motion to Dismiss with Prejudice under the “Premises Rule.”  Petitioner’s attorney filed an opposition to respondent’s Motion on April 1, 2011. The court agreed to bifurcate the case to hear testimony on the issue of whether the subject sidewalk could be considered part of respondent’s premises under N.J.S.A. 34:15-36.

Petitioner’s place of employment was the Aletha Wright County Administration Building, located at 600 Market Street in Camden, New Jersey. Other county agencies and offices occupied the administration building, including respondent, at the time of the accident. The building is large and occupies an entire city block. The building has two entrances, one on 6th Street and the other on Broadway. At trial, petitioner testified that on the date of the accident he was to report to work at 7:00 a.m. and had parked his car in a public parking lot. After parking the car, and while walking from his car to the 6th Street entrance, he tripped and fell on the sidewalk outside of the Administration building, of which respondent was a tenant. Petitioner confirmed that he fell at approximately 6:50 a.m., prior to the start of his shift, prior to him entering the building and prior to him being assigned his security post for the day.

Petitioner and a former security guard testified that respondent’s clients would often line up at the door of the building. Petitioner introduced photographs depicting a long line of people outside the building. However, further testimony revealed this picture was taken during an isolated incident; Hurricane Irene, which occurred years after the alleged date of accident. Petitioner and the security guard also testified that part of their daily duties and employment functions involved patrolling the sidewalk surrounding the administration building, controlling the lines outside of the building and walking employees outside to their cars.

Respondent offered the testimony of the Assistant Administrator for the Board of Services and the Board’s Chief of Security. Both witnesses confirmed the picture presented by petitioner was from Hurricane Irene, a once in a lifetime disaster situation, and that it had occurred years after the alleged date of accident. Chief Montes testified that the daily patrol or security enforcement for the sidewalk areas was the responsibility of guards employed by City Hall or the Camden City Police Department, and the security officers for respondent were not assigned to patrol outside the building. Both witnesses offered testimony that clearly documented that security guards for respondent did not exercise control of the sidewalk. Both witnesses supported the notion that guards were not only instructed to maintain the security of solely the building interior, but also that they had no reason to go outside, as there were never any crowds or lines, which was documented by photos taken by respondent and offered into evidence.  Furthermore, the Chief of Security testified that walking employees out to their cars was never a daily activity of a security guard employed by respondent.

At the conclusion of the trial, both sides submitted legal briefs. Prior to deciding the case, the Judge of Compensation inquired regarding possible settlement. Petitioner’s attorney’s settlement demand was $100,000.00. Respondent declined. Respondent highlighted that petitioner’s injury was not compensable as it occurred on his way to work, on a public sidewalk over which respondent, a tenant in the County-owned building, held no control whatsoever. The Judge agreed with respondent and found that the Chief of Security provided the most consistent and credible testimony during trial. The Judge ultimately ruled respondent neither patrolled nor controlled this public sidewalk. Based on same, the Judge held that petitioner failed to sustain his burden of proof and found petitioner’s injury was not compensable on the grounds that his injury did not occur during the course and scope of his employment.  Therefore, his recovery was barred under N.J.S.A. 34:15-36.

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Horseplay and Assault in New Jersey Workers’ Compensation

By: Nicholas A. Dibble, Esq.

Every Autumn Americans celebrate the national pastime, as baseball’s two best teams compete in the World Series.  Last December, many baseball fans believed the Los Angeles Dodgers had purchased the “Fall Classic” when they signed mercurial pitcher ZackGreinke to a $147 million contract.  However, less than a month into the season, Greinke suffered a broken left collar bone that necessitated surgical repair and caused him to miss six weeks of the season.  The injury occurred during an on-field, bench-clearing brawl with the opposing team.   The melee began after Greinke struck an opposing batter in the shoulder with a fastball.  While Greinke maintained the suspect pitch was an accident, he had a history of hitting that particular batter on three prior occasions during the past three seasons.  After the batter was struck by the pitch, he wrestled Greinke to the ground, causing both teams to rush onto the field suspending the play of the game.  Sometime during the ensuing bedlam, Greinke was injured.

Though an extreme example, the Greinke injury offers an interesting framework for examining the treatment of claims in New Jersey that result from horseplay and assaults in the work place.

Horseplay

Regardless of the occupation or working conditions, a certain amount of horseplay is always to be expected in any workplace.  While a certain amount of horseplay is to be expected, it is important to note that horseplay itself is not a defense to a workers’ compensation claim, as both the instigator and the victim may be covered for workers’ compensation purposes.  A defense may exist if the horseplay is determined to constitute a major deviation from the petitioner’s work duties.

The inclusion of a specific provision in the workers’ compensation statute addressing the issue of horseplay is a testament to its status as an inescapable part of the workplace.  N.J.S.A. 34:15-7.1 states that the person who neither instigates nor takes part in horseplay, but who is injured by it, can recover workers’ compensation benefits.  While this rule provides clear guidance for when an injured worker is a victim of horseplay, the statute is noticeably silent on whether the worker who initiates the horseplay is eligible for benefits.

The issue of whether an instigator of horseplay is covered for workers’ compensation purposes was addressed by the Appellate Division in Wasik v. Borough of Bergenfield, No A-794-02T3 (App. Div. December 1, 2003).  In Wasik, the petitioner, a sanitation worker, was injured after he made insulting comments and pelvic thrusts toward a co-worker while the two were completing their duties.  The co-worker responded to this provocation by punching the petitioner in the mouth.  The Appellate Division reiterated that N.J.S.A. 34:15-7.1 does not bar an instigator from coverage for workers’ compensation purposes.  In holding the incident was covered, the court placed limits on its unpublished holding by finding the horsing around was neither extensive nor serious and was commingled with the performance of the job duties.  The court also found that horseplay was part of the “nature of the employment” of the work crew and “may be expected.”  Accordingly, the operative analysis becomes whether the horseplay is within the accepted norms.

Major Deviation from Work

Determining whether horseplay constitutes a major deviation from work is now a preferred focus of the courts when assessing horseplay.  In Trotter v. City of Monmouth, 144 N.J. Super. 430 (App. Div. ), certif. denied, 73 N.J. 42 (1976) the Appellate Division addressed the issue of major deviation.  In Trotter, the petitioner was a county road department worker.  During a break from cutting grass in the heat of July, the petitioner and several coworkers began throwing water at one another to cool off.  The petitioner interrupted this water fight by driving a coworker’s motorcycle that had been parked nearby on and off county property.  It is important to note that during this joy ride, the foreman continuously yelled for the petitioner to stop.  The petitioner eventually drove the motorcycle up a hill, lost control of it and crashed suffering various injuries.  When discussing the case, the Appellate Division turned to Professor Larson’s Workmen’s Compensation Law guidebook, which assesses the gravity of a deviation from employment based upon the following factors:

  • The extent and seriousness of the deviation;
  • The completeness of the deviation (whether it related to petitioner’s performance of duty or involved an abandonment of duty);
  • The extent to which the practice of horseplay had become an accepted part of the employment; and
  • The extent to which the nature of the employment may be expected to include some such horseplay.

While these factors may appear to add order to the chaos, the application of the major/minor deviation test remains inherently subjective.  Due to the framework’s ambiguity, this horseplay analysis remains a refuge for the creative practitioner seeking to shoe horn an employee’s action into or out of coverage.

 Assaults in the Workplace Constitute a Major Deviation

 As with horseplay, when an employee assaults another employee, the victim is covered for workers’ compensation purposes.  However, it must also be noted that unlike horseplay, there is no published New Jersey case in which the assaulting individual has been found to be covered for workers’ compensation purposes.

Even after determining whether an injury occurred during an assault, the aggressor needs to be determined.  This may be done by distinguishing willful intention to injure someone versus a spontaneous reaction to aggressive behavior.

In Martin v. Snuffy’s Steak House, 46 N.J. Super. 425 (App.Div. 1957), the petitioner, a waitress, entered a dispute with the cook over a customer’s order.  The cook directed vile and abusive language toward the petitioner.  Becoming embarrassed and disturbed that customers were overhearing the abuse, the petitioner attempted to slap the cook, who then retaliated by slamming petitioner into a door and causing her injury.  The Appellate Division found the petitioner was covered by analyzing the petitioner’s conduct in a reflexive manner:

Petitioner’s slap when the chef resumed his offensive talk was simply a reflex action.  It was instinctive and impulsive, as spontaneous as it was unpremeditated.  It was natural conduct in the circumstances, a quick slap that was to be expected, and not such an act as should be considered a totally separate entity and labeled aggression.

Martin at 433.  The court went on to explain the difference between impulsive behavior and premeditated assaults:

We do not consider that the legislature meant to punish a workman for a playful shove, an angry curse, or even an impulsive slap or punch, by depriving him of compensation.  Where the act does not arise out of a private motive, purely personal feud, where it does not amount to willful intention to injure another, it is not for the court to read a new exception, covering aggressors, into the clear and unequivocal text of the Workmen’s Compensation Act.

Id.

Subject of the Fight

When determining where there is coverage in an assault case, a preliminary determination must be made as to whether the action arises out of the petitioner’s employment.  As the Appellate Division stated in Martin, an employee injured in an assault may be covered for workers’ compensation purposes when the assault “does not arise out of a private motive, purely personal feud, where it does not amount to willful intention to injure another.” Id.  This requires practitioners to distinguish whether the catalyst to an assault is an issue about work or a personal, non-work animus. 

This may best be illustrated by reaching back to the Appellate Division’s holding in Pittel v. Rubin Bros. Bergen, Inc., 59 N.J. Super. 531. (App. Div. 1960).  In Pittel, the animosity that led to the assault originated from a prior, high school fight.  While petitioner was on a ladder, taunting language was exchanged between the petitioner and the aggressor before the aggressor pulled the ladder from beneath the petitioner and beat him.  Workers’ compensation benefits were denied as the reason for the assault had nothing to do with work and stemmed from a personal grudge.

Assaults where the Aggressor is not an Employee

 Matters in which the individual committing the assault is not an employee are handled similarly to cases where an employee commits an assault.  In Giracelli v. Franklin Cleaners & Dyers, Inc., 132 N.J.L. 590 (1945) a female employee was working alone in a cleaning establishment when she was sexually assaulted by a customer who followed her to a back room where garments were stored.  The Judge of Compensation found the petitioner to be covered, as the assault would not have occurred but for the petitioner’s employment.

As in all workers’ compensation matters, a paramount issue in an assault case remains whether the injuries arose out of the petitioner’s employment.  In Marky v. Dee Rose Furniture Co., 241 N.J. Super. 207 (App. Div.) certif. denied, 122 N.J. 359 (1990) the petitioner was injured while at her place of employment, when she and a coworker were shot by a man with whom she had had a previous social and romantic relationship that predated her employment with the respondent.   At the time of the incident, the shooter was outraged because he believed the petitioner to be dating the coworker who was shot as the petitioner and coworker ate dinner together during breaks.  However, the shooter’s terrorism of the petitioner was not limited to the work place, as he had lurked outside the petitioner’s home for four days prior to the shooting.

The Appellate Division held the relationship between the petitioner and her coworker who was shot may have been fostered by their employment.  However, the petitioner’s decision to have dinner with the coworker on her dinner breaks, which angered the shooter and precipitated the shooting, was in no way related to her job with the respondent.

Whether a baseball player in a ball park or an office worker in a cubicle, horseplay is inherent in any workplace.  However, it is the deviation from the norms and the intricacies of each workplace that will determine whether workers’ compensation coverage exists.

Capehart Scatchard Attorney Addresses Orthopedics Conference

Mt. Laurel, NJ – – Workers’ Compensation Attorney and firm Shareholder Michael L. Bileci, Esq.  recently spoke at the Tri-County Orthopedics annual conference in Morristown, New Jersey.

Mr. Bileci spoke on the topic of  “Basic Defenses In Workers’ Compensation.”  In his presentation Mr. Bileci covered casual relationship defenses, as well as statute of limitations defenses and personal risk, notice and going and coming defenses.

Mr. Bileci, a Woodbury resident, represents insurance carriers and employers in the defense of workers’ compensation claims at all stages of litigation.  He received his law degree from Widener University School of Law,  cum laude and his B.A. degree from Saint Joseph’s University, cum laude.  He is admitted to practice law in New Jersey and Pennsylvania.

Capehart Scatchard Attorney Speaks Before American Academy of Matrimonial Lawyers

Mt. Laurel, NJ – – Capehart Scatchard Shareholder Amy C. Goldstein, Esq. recently spoke on “Evidence Issues in Matrimonial Litigation” at recent seminar sponsored by the New Jersey State Chapter of the American Academy of Matrimonial Lawyers.

A resident of Cherry Hill, Ms. Goldstein has practiced all aspects of family law for thirty years.  Her practice areas include  marital and civil union dissolutions, alimony, child support, cohabitation and prenuptial agreements, child custody and  related matters.  Ms. Goldstein received her J.D. from the University of Pennsylvania School of Law.  She received her B.A., with Honors, Phi Beta Kappa from the State University of New York at Binghamton.

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Appellate Division Appears To Upend Established Case Law On Medical Liens In Workers’ Comp Car Accident Cases

By: John H. Geaney, Esq.

In one of the most puzzling decisions in decades dealing with N.J.S.A. 34:15-40, the court in Dever v. New Jersey Manufacturers Insurance Company, 2013 N.J. Super. Unpub. LEXIS 2553, (App. Div. October 23, 2013) ruled that respondent has no lien on the medical portion of a third party claim against a UM or UIM carrier.

The case involved a motor vehicle accident which took place on January 3, 2000.  Plaintiff, John Dever, was an on-duty Atlantic City police officer who suffered injuries when his vehicle was struck by a vehicle driven by Alice Turner.  Plaintiff’s injuries were severe enough that he was granted an accidental disability pension effective January 1, 2001, awarding him two thirds of his pay for life free of state and federal taxes.

Dever settled his claim against Turner, who only had a $25,000 policy limit and then filed a claim under his underinsured motorist policy issued by NJM. At trial the parties stipulated liability based on an agreement to cap damages within the $500,000 policy limits as reduced by the $25,000 payment from Turner.

Notwithstanding the extent of Dever’s injuries, the jury determined that he had not proven a permanent injury and awarded Dever $275,000 as compensation for his economic loss.  He was not awarded pain and suffering damages. Both parties then challenged the verdict.  NJM argued that the jury overcompensated Dever for what it contended were temporary injuries because most of the treatment ended in May 2000.  The trial judge and the Appellate Division both rejected that contention and noted that Dever’s depression disrupted his ability to obtain and retain employment and therefore the jury verdict was supportable.

NJM also challenged the reimbursement of plaintiff’s medical expenses.  The workers’ compensation carrier paid all the medical bills.  Following the verdict, Dever moved for NJM to pay $8,482.11, arguing that he should not be forced to absorb his own medical expenses.  The trial judge agreed with Dever in a post-verdict motion because the judge no doubt expected that Dever would have to reimburse the workers’ compensation carrier for these medical expenses. The Appellate Division reversed.  The Appellate Division opinion noted that it was missing key information at the time it issued its decision.  “The workers’ compensation carrier paid all medical bills and we are told placed a lien on plaintiff’s recovery from the tortfeasor.  The record does not disclose whether the workers’ compensation carrier was paid $8,482.11 from plaintiff’s settlement with Turner.”

First, the Appellate Division noted that every automobile insurance policy must provide PIP benefits for the payment of medical expenses to the insured. The court further observed case law stating that an “injured person who was the beneficiary of the PIP payments could not and should not recover from the tortfeasor the medical, hospital and other losses for which he had already been reimbursed.” (citations omitted). Therefore, the court said, a plaintiff in this situation cannot offer evidence of the amounts collectible or paid under a standard automobile insurance policy of PIP benefits. The court added that when an accident victim is not compensated for medical expenses, the accident victim may recover medical expenses.

Next the court examined what happens when an accident victim incurs medical expenses arising from work.  It noted that workers’ compensation coverage is primary, as in this case, meaning that Dever’s medical bills were appropriately paid under workers’ compensation.  PIP carriers need not make payments which are covered by workers’ compensation.  In fact, had NJM paid the medical bills under PIP, the carrier would have had a right to recover those payments from the workers’ compensation carrier.

The court then discussed the subrogation rights of the workers’ compensation carrier under N.J.S.A. 34:15-40.  It said, “Section 40 has been found to require reimbursement when an employee obtains a recovery from his or her UIM carrier as a result of third-party liability.” Midland Ins. Co. v. Colatrella, 102 N.J. 612, 616-618 (1986).  This furthers the policy goal of workers’ compensation to avoid double recovery.

The court seemed to believe that there was tension between the automobile law and workers’ compensation law.  It said in a far-reaching opinion:

The record is not clear as to whether the workers’ compensation carrier invoked its lien against the $25,000 recovery from Turner.  We conclude such action would be inappropriate.  Under these facts, plaintiff’s medical expenses are the responsibility of the workers’ compensation carrier and are not reimbursable by defendant.  The trial court’s decision is reversed and the order for defendant to pay $8,482.11 representing plaintiff’s medical bills is vacated.

The court’s reasoning is hard to follow since it does not focus on the concept of double recovery so much as it does the concept of “permitted” recoveries.

Also, the Legislature has decreed workers’ compensation insurance must be the primary source of payment for work-related automobile injuries, and the cost of the employee’s medical expenses is born (sic) by the worker’s (sic) compensation carrier not the PIP insurance carrier.  Therefore, a section 40 lien, which attaches only to permitted recoveries, cannot include medical expenses from a New Jersey no-fault insured; there is no right to recover such expenses. Patterson v. Adventure Trails, 364 N.J. Super. 444, 448-49, 836 A.2d 856 (Law Div. 2003).  Allowing reimbursement to a workers’ compensation carrier from an employee’s UIM carrier is counter to the legislative intent of this express statutory reimbursement scheme.

It is important for practitioners to understand the limitations in this decision.  First, there was no workers’ compensation carrier involved in this case.  The compensation carrier’s identity is not disclosed, and there is no evidence that any party appeared or made any argument on behalf of the unidentified workers’ compensation carrier.  NJM was the UIM carrier in this case, and their counsel was arguing that the UIM carrier did not owe plaintiff the sum of $8,482.11.  The issue has to do with the common practice of putting medical bills “on the board” in civil cases for purposes of damages.  Since claimants in workers’ compensation cases with third party actions must typically repay part of their third party recovery to the employer to satisfy the workers’ compensation lien, claimants can put medical bills paid in workers’ compensation “on the board” as damages.  The jury is not advised that the bills have been paid by workers’ compensation.  Medical bills paid in workers’ compensation are not considered a collateral source, unlike PIP payments.

In this case, the court took this a step further. It not only said that the UIM carrier did not have to repay the sum of $8,482.11, but it went on to address the subrogation rights of the workers’ compensation carrier, which was not even involved in the proceeding.  As such, respondents can argue that the court’s holding in this case is what is called “dictum,” an observation that is unnecessary to the decision.

It is also important to note that this is an unpublished decision, which means it need not be followed by future appellate courts.  Nonetheless, the reverberations of this case will be felt by employers and carriers until further clarification is given in future litigation.  Claimants’ attorneys will seize on this case to argue that in a work-related car accident case, employers have no rights to subrogation of medical benefits.  The Dever case is already being widely discussed by practitioners throughout the state, and employers need to seek a published decision clarifying this decision since it seems contrary to the established policy against double recovery.

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Capehart Scatchard Employment Attorney Addresses Human Resources Best Practices

Mt. Laurel, NJ – – Capehart Scatchard Shareholder,  Ralph R. Smith, 3rd recently spoke at the “How the HR Department Can Save the Company Money” seminar sponsored by Lorman Education Services.

Mr. Smith spoke on the related topics of (1) best practices in ensuring company compliance with HR laws (2) best practices in addressing employee issues to avoid exposure to legal claims and (3) best practices in responding to legal claims and workplace lawsuits.

A Cherry Hill resident, Mr. Smith is Vice Chairman of the Labor and Employment Department.  He concentrates his practice in the areas of labor and employment law, and complex commercial litigation.  He is a frequent lecturer on labor and employment-related topics.

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