Awards

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 award.”

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 Chemical Co, 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.

In Poswiatowski, 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.

In Smith, 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.

The post Stacking Injuries to Multiple Body Parts Resulting From The Same Accident and The Impact on Reopeners and New Accidents appeared first on NJ Workers’ Comp Blog.

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.
 So
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
NJSEA.

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
activities.

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.

The post Appellate Division Affirms Decision of Judge of Compensation Finding That The New Jersey Sports and Exposition Authority Did Not Need To Reconstruct Petitioner’s Wage in Award of One Third of Permanent Partial Disability appeared first on NJ Workers' Comp Blog.

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
penalties.

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.

The post When May An Employer Or Carrier Accelerate Future Permanency Award Payments In A Lump Sum? appeared first on NJ Workers' Comp Blog.

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 penalty. 

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.

The post Appellate Division Voids Penalty Assessed Against Borough for Late Payment of Award appeared first on NJ Workers' Comp Blog.

The Honorable Joshua Friedman decided an issue this month that has been pending for several years regarding calculation of the Social Security Disability offsets in workers’ compensation cases for petitioners under the age of 62.  A petitioner’s attorney had brought motions in five cases including one handled by our office, asserting that the SSD offset had been calculated incorrectly because the petitioner’s rate should change and increase every three years in accordance with rate changes in Social Security – the triennial recalculation.  While we do not normally write about cases decided in the Division of Workers’ Compensation, this case is an exception because it is the only decision that we know of in the state dealing with the issue of triennial recalculation.

The total and permanent disability provision of the workers’ compensation statute NJSA 34:15-95.5 indicates that offsets should be calculated in conjunction with the SSD statute 42 USC 424(a).  In most states, if a petitioner gets both SSD and workers’ compensation the SSD is reduced to insure that the petitioner does not earn more than his 80% average current earnings.  In a handful of states, including NJ, there is a “reverse offset” – if the combination of SSD and workers’ compensation is more than the 80% average current earnings (ACE), then the workers’ compensation rate is reduced, not the SSD.  This offset can make a total disability award very attractive monetarily for the respondent and the Fund.  This offset is only applicable for total and permanent disability resolutions.

The petitioner’s attorney had argued that since SSD re-determines the ACE every three years that workers’ compensation was required to do the same.  This would mean that every offset case would have the rate increased every three years by an amount determined by Social Security which takes in effect  national wage factors, inflation, cost of living etc.  The effect of the change that the petitioner was seeking would be to both increase the exposure for every total disability case for a worker under 62 and also insert uncertainty regarding the amount of the award.  Another potential issue is that any change in the NJ workers’ compensation statute regarding the offset could result in the loss of the “reverse offset” for the entire state, converting NJ to a state where Social Security, rather than workers’ compensation gets the offset.

The motions were pending for a very long time with multiple briefs provided by each party and testimony offered regarding legislative intent regarding NJSA 34:15 – 95.5. and Social Security.  In his decision, Judge Friedman stated that the triennial recalculation is essentially a cost of living adjustment , which was not contemplated by the Workers’ Compensation Act.  He also found important the fact that Social Security does not make triennial recalculations in reverse offset states.  He believed that the calculations that the petitioner’s attorney provided were merely  hypothetical, not official calculations from Social Security.  Judge Friedman also decided that the Supremacy Clause, which holds that Federal law pre-empts conflicting State law, was not applicable because there was no intent in the Federal law to “occupy the field” for payment of workers’ compensation disability benefits.

This decision is a very favorable outcome for the  respondents and the Fund.  A contrary decision would have been extremely disruptive to both pending total and permanent disability cases and potentially cases already settled or tried.  At this time we do not know if the case will be appealed. Claire Ringel of our office handled this case for respondent Burlington County. Please direct any questions regarding this issue to her.

The post Triennial Recalculation Issue Decided in Favor of Respondents and 2nd Injury Fund appeared first on NJ Workers' Comp Blog.

By now all workers’ compensation practitioners know of the law change in 2018 with respect to voluntary offers or bona fide offers of permanency.  The new law amended the 1927 law that allowed employers to make voluntary offers within certain time limits free from counsel fee.  The law passed in 2018 provides that if there is an established attorney-client relationship when an offer is made, the offer is feeable, meaning that both petitioner and respondent pay a counsel fee on the amount offered when the case settles.

The main incentive for employers to make voluntary offers for the past 90 years has been the savings on counsel fees.  Those savings were often significant.  If the employer offered a percentage equal to $10,000 by way of voluntary offer, the respondent would save $1,200 by not having to pay a counsel fee on that offer.  The petitioner would save $800.  But with the new law, why would employers or carriers ever make a voluntary offer going forward?  Are there still situations where voluntary offers make sense?  The short answer is that there may yet be limited situations that argue in favor of a voluntary offer.

1. Obviously, if an injured worker has no attorney at the time the offer is made, the offer remains free of any counsel fee. Here is the problem:  there is no way for an employer or carrier to be sure that the worker has no written agreement with a lawyer.  A question may be put to the injured worker about having counsel, but there is no obligation for the worker to reveal this information to the employer or carrier.  The injured worker may not feel comfortable at all with this question. Nonetheless, the employer can always make the voluntary offer, understanding that it may not know until the end of the case whether the offer is considered bona fide for purposes of being free of counsel fee.  The proof will be the written counsel fee agreement offered in evidence at settlement. The date of the agreement will decide whether the offer is feeable.
2. The injured worker’s lawyer may on occasion make a request for a voluntary offer and give consent that the offer will not be feeable. This could happen in a situation where the employee has reached maximal medical improvement but the case is nowhere close to settlement.  The employee’s lawyer may request a voluntary offer at this point to tide his or her client over pending the resolution of the case and may propose that the amount of the offer will not be feeable.  These kinds of hardship offers by consent are likely to occur from time to time.
3. Another situation that happens concerns overpayments of temporary disability benefits. When a carrier or third party administrator has overpaid temporary disability benefits, one way to recapture the overpayment, subject to approval of the Judge of Compensation, is to make a voluntary offer of permanency and then reduce the offer by the amount of the overpayment in temporary disability benefits.   The offer may still be feeable at the end of the case depending on whether there was a written attorney-client relationship, but at least this approach may remedy the overpayment issue.
4. In some cases it is not clear whether the employer or carrier owes temporary disability benefits. There may be causation or legal issues over the question whether temporary disability benefits are due and owing.  In this case, the parties may discuss making an open-ended offer at a certain rate while the issues are being litigated.  Once the causation issue gets resolved, the Judge will decide whether the voluntary payment will be deemed to be a payment of temporary disability benefits or a voluntary offer of permanent partial disability.   Either way the employer will get a dollar credit.  The advantage for the employer is that this approach may avoid penalties and perhaps counsel fees related to a motion for medical and temporary disability benefits.
5. Some carriers believe that a voluntary offer made early on in a case at the time of MMI, before it is known whether the employee has a lawyer, may deter the injured worker from filing a permanency claim petition. It is impossible to know whether this theory is valid because it is hard to prove a negative, namely that the injured worker would have filed a claim petition but for the voluntary offer.  Some carriers do subscribe to this approach and may therefore continue to make voluntary offers with the hopes that such an offer will deter the filing of formal claim petitions.

In short, the new law does not eradicate all rationales for voluntary offers.  Such offers will still happen from time to time but nowhere near as often as they were made over the past 90 years.  Voluntary offers will be few and far between in all likelihood, and practitioners will need to weigh the plusses and minuses in each case.

The post Do Voluntary Offers Still Make Sense in New Jersey Comp? appeared first on NJ Workers' Comp Blog.

New Jersey workers’ compensation has two kinds of settlements: those under Section 20, a full and final settlement, and those under Section 22, an accepted percentage of disability settlement with reopener rights retained by the petitioner.  Section 20 settlements are popular with employers and carriers because they do not involve an admission of liability, and the case is closed for good.  The two most frequent legal bases for obtaining a Section 20 settlement are liability and causation.  They comprise perhaps 95% of the Section 20 settlements in the Division, with the remaining small portion involving jurisdiction and dependency.  But what do liability and causation really mean?

An issue of liability refers mostly to legal considerations:

• The petitioner was not in the course of employment when injured
• The petitioner was injured on premises not controlled by the employer
• The petitioner was an independent contractor, for instance, not an employee
• The petitioner cannot meet the definition of having a permanent impairment under Section 36

In contrast, causation refers mostly to medical-legal considerations:

• The herniated disc is preexisting and was not caused by the injury
• The petitioner’s present complaints reflect a subsequent non-work incident
• The mechanism of injury is not consistent with petitioner’s pathology

The foregoing are just some examples of how causation and liability issues manifest in workers’ compensation cases.  As a practical matter, it is much easier to reach a Section 20 settlement if the workers’ compensation claim has been denied from the outset.   Accepted cases with objective evidence of permanent partial disability are not candidates for a Section 20.  Such cases are settled under Section 22, allowing the injured worker to retain the right to reopen the case in the future for additional medical, temporary or permanency benefits within two years from the last payment of compensation.

One exception to the above rule disqualifying admitted cases from a Section 20 concerns those matters where the defense doctor disputes that there exists any permanent disability at all.  If the defense IME finds zero permanent partial disability, even in an admitted case, the case may be a candidate for a Section 20 settlement.  Both parties must agree, and the Judge of Compensation must approve the Section 20.

Practitioners should realize that not all estimates of zero disability are the same.  If an IME doctor finds zero disability in a sprain and strain case with limited treatment and minimal lost time, the Judge of Compensation will be more likely to approve a Section 20 than a case where the defense IME has a zero estimate in the face of MRI findings of a bulging disc with radicular pain.  Just because the defense IME finds zero disability does not mean that the case will be approved for a Section 20.  Each case is different, and judges focus on the specific medical findings as well as the impact of the injury on the injured employee in his or her work and non-work life.  Minor sprains are excluded from compensation by statute under N.J.S.A. 34:15-36.  As such, admitted minor sprain cases are often settled under Section 20.

Perhaps the largest category of Section 20 settlements emerges from cases where the treating doctors have inquired about and identified preexisting or subsequent conditions that may explain the petitioner’s pathology and complaints. Often that questioning reveals prior car accidents or injuries that led to significant treatment and diagnostic testing, and that analysis often leads to a Section 20 resolution.  The skill of taking a detailed past medical history, inquiring about current sports, recreational activities and second jobs, varies immensely from doctor to doctor.  It takes time and effort to do this well.

Workers’ compensation is contingent health care, meaning that the physician must focus on whether the condition arises from work or perhaps from other non-work causes.  Most employers and carriers err in choosing doctors from enormous lists and large networks where the focus is primarily on provider pricing.  The reality is that the best results and greatest savings in workers’ compensation are directly traceable to the ability of physicians to analyze causation thoroughly and spend time taking a detailed past medical history.  Occupational physicians and surgeons should be selected primarily for their medical expertise and for their skill in analyzing causation, including taking a complete past medical history and considering non-work hobbies and sports in relation to the work activity that is alleged to be the cause of the injury.

The post Understanding Causation and Liability in Relation to Section 20 Settlements appeared first on NJ Workers' Comp Blog.

Patrick Malone began working for the Pennsauken Board of Education in 2007 as a custodian.  He said he would sweep floors, take out the trash, clean the blackboards and desktops, remove gum and shoe marks from floors, sometimes climb ladders, and clean toilets, floors and walls.  He also said in the summer he would remove furniture and filing cabinets and put them in the hallway so that classrooms could be cleaned.  He said he did a lot of kneeling, stooping, and squatting, but he never said how frequently he did any of these tasks.  He had been doing this work for many years with other employers.  By 2012 he began to experience constant pain in both knees and was diagnosed with osteoarthritis in both knees.  In 2012 and 2013 he had both knees replaced.

Malone filed an occupational claim petition against the Pennsauken Board of Education, alleging that his work duties aggravated his preexisting but asymptomatic osteoarthritis, requiring bilateral knee replacements.  The Board of Education, represented by Capehart Scatchard, denied the claim.

Petitioner produced Dr. Ralph Cataldo, an anesthesiologist, as his expert.  Dr. Cataldo said that he found objective findings consisting of surgical scars from the knee replacements and some swelling about both knees.  He said that in his opinion the work duties aggravated petitioner’s preexisting osteoarthritis because petitioner was asymptomatic in 2007 and was symptomatic after performing work duties.  He estimated 70% permanent partial disability in each leg.

Respondent produced Dr. Francis Meeteer, a family and occupational medicine physician, who testified that petitioner’s osteoarthritis condition was chronic, progressive and degenerative and due to the natural aging process, not to work.

The Judge of Compensation found Dr. Cataldo to be more credible.  She commented as follows:

[w]hen called upon to make findings neither the Court or medical experts should ignore commonly known facts to wit:  an extensive amount of bending, squatting, and lifting can cause increased discomfort in one’s knees.  The Court finds the testimony of Dr. Cataldo satisfies the burden of establishing a causal connection with probability that Petitioner’s injuries were aggravated by his occupational duties.

The judge awarded petitioner 55% permanent partial disability credit 20% for prior disability plus one year of temporary disability benefits for the year petitioner was out of work because of his knees.  The permanency award came to $109,214.  Petitioner returned to work for the Board of Education.

Respondent appealed and argued that Dr. Cataldo’s opinion was a net opinion, meaning that he never provided any medical basis for his opinion on causation.  The Court agreed, noting that there was minimal evidence in this case.  “First, there was no evidence concerning how often and to what extent Malone engaged in the various physical activities about which he testified to perform his job duties.  Simply to identify the tasks he performed and that they entailed “a lot” of kneeling, stooping, and squatting fails to impart any reliable information about how arduous and physically demanding Malone’s job actually was.”

The Court added that the medical evidence was also deficient. “Second, the only objective medical evidence Cataldo identified were the surgical scar and the swelling he found around each knee. Neither form of evidence indicates – and Cataldo did not explain – how Malone’s job duties aggravated the underlying osteoarthritic condition.”

The Appellate Division criticized the simplistic analysis on causation performed by Dr. Cataldo. “In the final analysis, the crux of Cataldo’s opinion is that, because Malone’s knees were asymptomatic before but became symptomatic after he began working for the Board, then his knee condition must have been caused by the tasks he performed for the Board.”  The Court said that the record is devoid of the necessary objective medical evidence to establish a causal connection between Malone’s bilateral knee condition and his work duties.

For these reasons, the Appellate Division reversed the award and ruled in favor of the Board of Education.  The Court did not remand the case for further findings.

This case is significant for practitioners and employers because it shows that the focus in occupational orthopedic claims, just like pulmonary claims, must be on medical or scientific evidence supporting or rejecting causation.  In an occupational claim, unlike a traumatic claim, the claimant must show not only that the condition arises from work and occurs during work, but also that the medical condition is produced by causes that are characteristic of or peculiar to work in a material degree.

In the end, Dr. Cataldo based his opinion on timing, not medical analysis.  It is clearly flawed reasoning to assume proof based on timing alone in an occupational disease claim.  His contention was that there was causation merely because petitioner became symptomatic after working with a preexisting osteoarthritic condition. It is the sort of logic that would support a causal connection between the rooster crowing and the rising of the sun. As Lora Northen, Esq. of Capehart Scatchard has often stated in seminars, that sort of logic would mean that sleeping causes carpal tunnel syndrome because the numbness and tingling usually happen at night.

Petitioner lost this case because there was absolutely no testimony at trial regarding any medical studies or literature showing that bending, stooping or squatting worsens preexisting osteoarthritis to the degree that knee replacements are needed. In fact, the Arthritis Foundation promotes an exercise program for those with osteoarthritis. The question is the degree of physical activity which is helpful or harmful. In this case, the record was silent on the extent and frequency of physical activity engaged in by the petitioner.

This case was expertly handled by Adam Segal, Esq. of Capehart Scatchard with assistance on the trial and appellate briefs by the undersigned. The case can be found at Malone v. Pennsauken Board of Education, A-3181-16T1, (App. Div. June 29, 2018).

The post Appellate Division Reverses Substantial Award to Custodian Who Contended Five Years of Custodial Work Caused a Need for Bilateral Knee Replacements appeared first on NJ Workers' Comp Blog.