Awards

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.

Assessing permanent disability is such a vital aspect of every formal workers’ compensation claim petition.  New Jersey is a loss of function state unlike the more common wage loss states.  An employee can return to his or her job following treatment or surgery, perform the very same work tasks, and still remain eligible for a substantial award of permanent partial disability benefits if the individual can show a substantial impairment of non-work activities.  In other states, if an injured worker returns to the employment, that generally ends the entitlement to workers’ compensation benefits.

New Jersey’s peculiar system of compensation raises an interesting dilemma for employers, lawyers, physicians and judges:  how does one assess the extent of permanent partial disability in one who has returned to the very same occupation with no limitations at work? And how credible is it when an employee performs very physical work without restrictions but complains about difficulty mowing the lawn at home?  Both sides in the case gather all the relevant medical records and send the injured worker for an IME, or even multiple IMEs, with physicians who specialize in assessing the extent of permanency.   The medical records tend to drive the outcome, and all stakeholders in the process focus heavily on the objective studies:  surgery records, MRIs, CT scans, EMGs, pulmonary function testing, and the like.  But there is generally too much emphasis on the treatment that occurred some time ago as opposed to current level of function.

The emphasis on medical records and operative reports is understandable, but all too often practitioners, physicians and judges forget to evaluate the overall current function of the individual and instead make assumptions of disability based on the type of surgery that took place.  One hears comments like this quite often:  “I never settle a two-level fusion surgery for less than 35% of partial permanent disability;” or, “I never pay more than 27.5% for a one level fusion surgery.”  There is a very substantial dollar difference between 30% and any percentage over 30%, so battle lines are often drawn at that particular percentage point. The focus should not be so much on the type of surgery that took place but on the level of function that the individual has at work and outside work.  The assumption that many practitioners have that all extensive fusions must be rated at higher than 30% ignores the legal standard in New Jersey.  Every case is different.

Why does this happen?  Because it is easier for practitioners to evaluate the medical records than it is the actual level of function.  We do not have depositions in New Jersey, and complaints contained in IMEs are so often cursory.  Some IME physicians spend only a line or two on the activities that the individual can now engage in or has given up, while spending 95% of the medical report on cataloguing the treatment that occurred many months ago.  Could one individual have more extensive limitations following a one level fusion than another individual after a three level fusion?  The answer is yes, but one seldom sees this reflected in awards because assumptions about the impact of surgery tend to be self-fulfilling.

Case law in New Jersey makes it reversible error for a judge to say that he or she always awards a given percentage for a certain type of surgery.  The appellate courts have consistently emphasized that when assessing permanency one must look at the impact of the injury on the work and non-work life of the claimant – not the type of surgery one has had.  Has the individual returned to previous sports activities, gotten a second job, returned to work without restrictions, or taken on overtime work?  Is the individual able to enjoy jogging, horseback riding, and more vigorous sports?  These are the most important questions that apply under all three Perez decisions.

From a strictly legal standpoint, if an individual had a two-level fusion surgery and came to court to testify that he could do everything now that he could in the past and had no restrictions, no award of permanency would be warranted.  Evaluating physicians make the same fundamental mistake all the time, raising estimates of disability on individuals based on the number of herniated discs involved, or the type of shoulder surgery, without focusing on what the injured worker actually does or cannot do at home and at work.  When reserving a file, practitioners and adjusters have to focus on the medical treatment because it is early in the case, but in the end the focus must be on the actual level of function when all treatment has ended.  One can make a strong argument that the system tends to evaluate medical records too much and not the people whose records are being evaluated sufficiently.

What does this mean for employers?  If employers wish to reduce permanency awards, they need to address the following:  how has the work injury impacted the level of function at work and outside work?  If an injured worker has minimal complaints following a two-level fusion surgery, and is functioning well at home and at work, the award should be fairly modest.  It should not climb over 30% just because most similar surgeries have resulted in high awards.  If the level of function at work and at home is impressive, It should not matter that the surgery involved two levels.  It is really a mistake to assume that a given type of surgery is worth a preset percentage.  While the system has evolved that way, it is not true to the statute at all.

Surveillance can be helpful in lowering permanency awards if the surveillance shows that the individual is performing at a high level of activity outside work.  What can the employee do in terms of sports and hobbies after MMI?  We all know people who have had extensive knee, back and shoulder surgery outside workers’ compensation, and many return fully to the activities that they used to engage in.  After all, surgery does sometimes restore function completely or nearly fully.  The results of functional capacity exams done after MMI are often a great indicator of level of function and should be considered by the parties in a workers’ compensation case.

Employers should speak with supervisors to get a sense of what the individual is involved in socially and recreationally. It is very rare that an employer will bring in a supervisor or manager in the permanency phase of the case to testify regarding what an employee is able to do at work post-surgery.  But that testimony can be crucial if it contradicts statements that the injured worker cannot engage in certain physical activities.  On high exposure cases, this should be considered.  Proving a normal level of function at work and outside work is the best way to counter the pre-conceived notion that every two-level fusion or frozen shoulder case must be worth 35% to 40%.

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