Awards

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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New Jersey adjusters sometimes ask why future benefits under an order approving settlement with a percentage of disability cannot be paid in a lump sum to the injured worker.  In other words, why is there a requirement that future payments be paid out over a period of many weeks or even many years? This question goes to the foundation of the New Jersey system.  The New Jersey Act is social legislation, and Judges of Compensation are required to look out for the best interests of injured workers.  There is a legislative conviction that dependable weekly payments of permanent partial or total disability are almost always in the best interest of injured workers.  The right to reopen workers’ compensation cases is extended until two years from the last payment, (which benefits the employee), and the insistence on weekly payments avoids the temptation to risk a large sum of money in an exercise of bad judgment, perhaps gambling or betting on a hot stock.

If an adjuster were to mistakenly advance, for example, 100 weeks of future payments in one lump sum, this would amount to an impermissible commutation.  There is a procedure under N.J.S.A. 34:15-25 for employees to obtain a commutation of future payments, but an application must be filed with the Director of the Division for judicial permission to commute an award. Usually the Judge of Compensation who approved the settlement hears the commutation request.  The statute reads, “Compensation may be commuted . . . at its present value, when discounted at five per centum (5%) interest, upon application of either party, with due notice to the other, if it appears that such commutation will be for the best interest of the employees or the dependents of the deceased employee, or that it will avoid undue expense or undue hardship to either party. . .”

There are few published cases on commutations, but generally judges focus on whether there is an undue hardship on the injured worker or family or a compelling need that may justify a lump sum commutation.  One example comes from Harrison v. A & J Friedman Supply, Co., 372 N.J. Super. 326 (App. Div. 2004) where the applicant, a dependent spouse, applied for a commutation of a dependency award because the building she resided in was in default to the City of New York, giving her the opportunity to purchase her Manhattan residence for $370,000.  She could obtain a mortgage for about half that amount, but she needed to commute future permanency payments to raise the balance of the purchase price.

The Judge of Compensation reviewed the New Jersey Administrative Code provisions on commutations.  The relevant code provision provided, “No award for total disability or dependency benefits shall be commuted.”  The Judge of Compensation therefore denied the application, and the petitioner appealed.  The Appellate Division disagreed with the administrative code provision.  It said, “A plain reading of this statute, spurred by the absence of any limit on the types of compensation benefits that may be commuted, suggests that the discretion to permit commutation was intended to encompass all types of benefits, including the total disability and dependency benefits specifically referenced in N.J.A.C. 12:235-6.3 (d).”  The Court held that under certain circumstances a commutation may be made in dependency and total and permanent disability cases.

The Court did not order the commutation but it sent the case back to the Judge of Compensation for further proceedings.  “Certainly, upon remand, the parties should be afforded an opportunity to present information regarding the appellant’s financial status, her ability to maintain her lifestyle in the absence of the weekly benefits, the value of the property appellant is desirous of purchasing, the availability of funds other than the dependency benefits, and the availability of other financing that might render commutation unnecessary.”  As one can see from reading this quotation, commutations are not simple matters.  Judges must analyze many different issues and develop an understanding of the injured workers’ financial status before making an informed decision.  It is a case by case analysis often requiring substantial testimony. In actuality, there are surprisingly few commutation requests annually in the Division.

This legislative preference for weekly payments of permanency benefits also explains why annuity companies are less involved in New Jersey than in other state workers’ compensation systems.  In many states, an annuity company may offer an injured worker a stream of payments changing over time, perhaps increasing in future years at a higher rate. But in New Jersey payments must be made according to the statute.  If an award is entered for 60% permanent partial disability, it is paid out over 360 weeks at one set rate.  If an annuity company were to contract with the employer to make those 360 weeks of payments, the annuity company would be required to make the payments at the rate established in the court order.  The annuity company could not vary the rate or increase the rate while shortening the period of payments or make any other material change without the permission of a Judge of Compensation.

Over all, the New Jersey system makes good sense, even though injured workers may sometimes be disappointed that their payments must be spread out over many weeks.  Settlements by lump sum payments do happen frequently in New Jersey, of course, under N.J.S.A. 34:15-20, but these settlements are only available where there is a genuine issue of causation, liability, jurisdiction or dependency.  A smaller percentage of cases is settled under Section 20 than on a percentage basis under N.J.S.A.  34:15-22.

The New Jersey system is designed to provide protection for injured workers and their families by creating a steady and dependable stream of tax free payments over a period of weeks or even years, depending on the severity of the injury and its impact on the employee’s work or non-work life.  Permission to apply for a commutation is potentially available to any recipient of a percentage disability award paid out over future weeks, but the employee must prove to the Judge of Compensation that such a commutation is in his or her best interest.

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New Jersey employers like reopener claims about as much as homeowners like back-to-back blizzards.  The general view is that employers have virtually no defenses and have to pay more with each reopener. The truth is that employers can win reopener cases where the petitioner’s expert cannot really prove the petitioner’s condition has worsened since the prior award.  Garces v. Mid-State Lumber Corp, A-4199-15T4 (App. Div. April 10, 2018) provides a good example.

Petitioner suffered two compensable accidents on October 16, 2009 and December 11, 2009 leading to an order approving settlement for 66.67 percent partial permanent disability described as orthopedic and neurologic in nature for residuals of a herniated disc L3-4 and L4-5 status post lumbar laminectomy and fusion.  Respondent received a credit of 27.5% for previous disability.

On June 15, 2013, some fifteen months after entry of the award of 66.67% petitioner filed to reopen his case.  Petitioner testified in the reopener, and he produced two experts.  Dr. Becan was petitioner’s orthopedic expert, and Dr. Peter Crain was petitioner’s psychiatric expert.  The treating surgeon, Dr. Carl Giordano, saw petitioner and concluded petitioner needed no further treatment.

Dr. Becan saw petitioner twice, once in 2011 before the first award and again in 2014 for the reopener examination.  He raised his estimate to 90% of partial total.  On the reopener exam he wrote that petitioner’s disability had increased by 20% of partial total. When asked about the objective findings that supported the increase, he said petitioner “walked with a guarded and antalgic gait pattern,” “had a noticeable limp on the right,” and “was unable to heal or to walk on his right leg.”  He also found “right-sided sacroiliac joint tenderness.”  He noted restrictions when he put petitioner through various maneuvers like straight leg raising.

On cross examination, Dr. Becan conceded that many if not most of his restrictions were the same as they were in 2011.  The two reports were compared, and it turned out that petitioner’s range of motion tests were actually better in 2014 than in 2011.  Petitioner’s muscle strength testing of the quadriceps and hamstring was better.  The right ankle jerk reflex had improved.  Backward extension was the same, and straight leg raising improved.

The Judge of Compensation examined the two reports closely and concluded that Dr. Becan’s findings on the new 2014 examination were not worse at all.  He further noted that while Dr. Becan said petitioner could not return to work, the doctor did not know what petitioner’s job duties were.  The Judge concluded that Dr. Becan had simply offered a net opinion, which is an opinion not supported by any evidence.  The Judge also noted that petitioner’s psychiatric expert, Dr. Crain, had done the same thing.  He also failed to offer any objective evidence of worsening.

The Judge of Compensation dismissed petitioner’s reopener claim and petitioner appealed.  The Appellate Division made short work of the appeal and commented that there was sufficient credible evidence to support the dismissal of petitioner’s case.

The case illustrates an important point.  In valuing a reopener claim, practitioners often focus on the percentage increase that the expert for the claimant offers.  But the better way to value a reopener case is to look beyond the mere estimate of increased disability and compare the pre- and post- award reports side by side.  If the actual measurements, range of motion and findings are the same or better on reopener, it doesn’t matter that the claimant’s doctor raised his or her estimate.  The percentage of increase in an IME means nothing if the actual test results appear to be the same.   There are other ways to win reopeners as well, such as proving that a new non-work event or new employment has worsened the petitioner’s condition.  All of these approaches do give respondents a fighting chance in defending reopeners.

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The concept of reconstructing wages for permanency awards pertains to part-time workers with serious injuries.  For example, consider an employee who works 20 hours per week earning $10 per hour.  The employee has a serious injury that prevents the employee from earning the same amount of money or prevents the employee from working full-time in the future.  The wage is $200 per week giving rise to a permanency rate of $140 per week.  Assume that the award is 50% permanent partial disability payable over 300 weeks.  Unreconstructed the award would amount to $42,000.  (300 times $140).   If the Judge were to reconstruct the wage to $400 per week (40 hours times $10 per week in a customary work week), the rate would be $280 per week with the award being $84,000. (300 weeks times $280).  That reconstructed award to a 40-hour work week would be double the unreconstructed award.

As a reminder, the New Jersey rate chart that all practitioners have at their desks cannot be used for low wage employees.  The front of the rate chart is for high wage earners (those subject to maximum rates due to high wages).  If one were to pay based on a 2017 rate chart, the award would be 300 weeks or $179,400.  That would be an overpayment of $137,400!

Remember also that the minimum for temporary disability benefits is much higher than the minimum for permanency benefits ($35). In 2017 the minimum rate was $239 for temporary disability benefits but the minimum for permanent partial disability benefits was $35 per week.  That minimum rate has been $35 per week for many decades.

So when should a judge reconstruct an employee’s wages?  The rule comes from Katsoris v. South Jersey Pub. Co., 131 N.J. 535 (1993).  The Supreme Court said, “The critical inquiry is whether petitioner has demonstrated that her injuries, while disabling her from engaging in part-time employment, have disabled or will disable her with respect to her earning capacity in contemporary or future part-time employment.”

Let’s consider a few scenarios:

1. The part-time employee is able to return to his or her full-time job but can no longer engage in the part-time work due to the disabling injury. Reconstruct?  No, according to the Supreme Court in Katsoris.  If the employee can return to her prior full-time job with no wage loss in that full-time job, the employee has not satisfied the test because the employee cannot show material impairment in full-time earning capacity.
2. The part-time employee was earning $800 per week in her full-time job, which requires physical skills, but now cannot engage in physical work. Her employer transfers her to a lower paying non-physical job paying $400 per week due to the work injury.  Reconstruct the award?  Yes, because the employee has proven a material impairment in full-time earning capacity.
3. The part-time employee decides to spend more time with her growing family and cuts back hours from 20 per week to 15 per week. Reconstruct the award?  No, because the employee’s decision to reduce hours is not related to the work injury but is rather a personal decision.  But suppose the employee could only work 10 hours per week part-time because the disabling injury prevented her from working her normal 20 hours?  Then the Judge would properly order reconstruction because there is proof of a contemporary loss of wage earning capacity.
4. The part-time employee lost her full-time job earning $1,000 per week while out one full year recovering from the serious work injury suffered on the part-time job. The employee was skilled in package handling and now cannot get any job at all other than a full-time minimum wage job.  Reconstruct the part-time wage? Yes, because the work injury clearly has had a material impact on the employee’s full-time earning capacity.  She cannot get a similar full-time job paying wages she had earned before.

What happened to Ms. Katsoris?  She had a part-time job delivering newspapers, which was the work that caused her serious injury.  She was no longer able to do that part-time physical job on account of the work injury.  However, she was able to return to her full-time secretarial job.  The Appellate Division stated that the wage should be reconstructed, but the Supreme Court reversed and said it should not be reconstructed because petitioner did not prove an impairment of full-time earning capacity since she was able to resume her full-time secretarial job.  So the focus must always be on whether there is a material impact on contemporary or future earning capacity.

Here’s the last point to remember about wage reconstruction.  One does not always reconstruct to 40 hours per week. That is most common but it could be more or less hours, depending on what is a normal work week.  The Supreme Court makes clear in the Katsoris case that the judge should determine the customary number of hours and the customary number of days constituting an ordinary work week before reconstructing.  So if the normal work week is 50 hours per week, then the multiplier should be 50 instead of 40.

The post When Should a Judge Reconstruct An Employee’s Wages for Permanency Purposes? appeared first on NJ Workers' Comp Blog.

It is challenging for a petitioner to relate an increase in disability or need for treatment to a relatively modest award that has remained unchanged for over a decade.  That was the situation in Batts v. Flag House, A-5616-15T4 (App. Div. January 16, 2018).   The case involved an award of 50% disability of the right foot and 10% psychiatric disability going back to 2003.  Petitioner was originally injured on April 2, 1998 when a forklift ran over his right ankle in the course of employment.

Petitioner reopened the case several times – but only with respect to the foot.  In 2007 his foot award was increased to 57.5%.  Five years later, his foot award was increased again to 60%.  But the psychiatric aspect was not increased.  It remained at 10%.

The same day petitioner received an increase to 60% of his foot, he filed a modification application along with a motion for medical and temporary disability benefits seeking psychiatric treatment.

At trial, petitioner testified that his increased level of depression was due to his foot injury.  He said that he developed intimacy issues with his wife leading to his divorce nine years earlier.  He also alleged that he gained 50 pounds and was diagnosed with depression following the accident.

Petitioner presented Dr. Devendra Kurani as an expert in psychiatry.  Dr. Kurani stated that petitioner’s divorce, lack of mobility, weight gain, hypertension, diabetes, unemployment, financial concerns, inability to socialize, and depression were all due to his 1998 accident.  Dr. Kurani said petitioner needed psychotherapy and medication.  Up to that point in time, petitioner had never been prescribed any psychiatric medication.

Respondent produced Dr. David Gallina, who agreed that petitioner had depression.  However, Dr. Gallina testified that the depression was not due to the work accident in 1998.  He felt that his obesity and loneliness were due to his divorce.   Respondent pointed out that petitioner had not had any psychiatric treatment throughout the life of his case and had not been prescribed psychiatric medications.

The Judge of Compensation ruled against petitioner.  The Judge noted that petitioner had never sought psychiatric treatment from 1998 to 2016.   Although his awards had been increased for the foot, his underlying foot condition had not changed all that much.  The Judge felt petitioner failed to link his divorce to the ankle injury in 1998.  According to the Judge, Dr. Gallina’s testimony made more sense in that petitioner made certain lifestyle choices which could account for his obesity.

Petitioner appealed and argued that res judicata principles applied and the Judge was bound by the prior acceptance of the psychiatric aspect of the case.  The Appellate Division disagreed:  “Thus, there is no basis for the assertion that petitioner had a right to have his psychiatric disability award increased because of a prior court order.”  The Appellate Division stated that petitioner simply failed to prove that his current depression was caused by his 1998 accident.

The case illustrates that employers can win reopener claims at trial.  The case was extraordinary in that petitioner was seeking psychiatric treatment after an accident going back to 1998 with no intervening psychiatric treatment.

Rarely does the Appellate Division reverse a Judge of Compensation when the only issue is the extent of permanent partial disability.   The case of Van Artsdalen v. Fred M. Schiavone Construction, No. A-3392-15T1, 2017 N.J. Super. Unpub. LEXIS 2516 (Oct. 5, 2017) is that rare example.

The petitioner, Mr. Van Artsdalen, was injured on January 26, 2012 in a fall at work while carrying 60-70 pounds of plywood.  He saw a doctor after work and then again two days later.  He attempted to return to work the next day but was unable to do so because there were no work assignments available.  He did go back to work on January 30, 2012 but could not finish his shift on account of severe back pain.  Petitioner obtained an MRI and received physical therapy and pain management.  He was cleared to return to work on May 5, 2012.  He did not return to work initially because there were no assignments.  Finally, he returned to work on July 12, 2012 and continued through September 2012 when he retired.  He testified that he could no longer take the pain and therefore retired at the age of 53.  He did admit to having chiropractic treatment in 1992 and symptoms of low back treatment in 2008.

In 2013 petitioner had another MRI and then filed a petition in the Division of Workers’ Compensation.  He received more pain management and an epidural injection.  He never treated again after September 2014. He never had any surgery to his spine.  Petitioner testified at trial that he had difficulty lifting things, bending over while getting dressed and performing household chores.  He was subject to sudden onset of sharp pain, particularly in the groin area.  He used over-the-counter medications and ice.  Sometimes the pain interfered with his sleep and often prevented him from doing heavy lifting of objects.  He did admit that he was able to perform most daily activities including household chores and driving his grandchild to and from school.

The parties agreed to submit the expert reports into evidence without having the experts testify.  Dr. Gaffney for petitioner estimated 52.5% based on petitioner’s lack of relief from epidural injections.  He diagnosed “chronic pain and lumbar fibromyositis syndrome” and noted “restriction of function.” The Judge stated that “it was understood that surgery could not be wisely undertaken in Van Artsdalen’s condition to obtain an optimum result bettering his condition.”  However, there was apparently no testimony to the effect that surgery could not be performed, and Dr. Gaffney’s report did not spell this out.   The Judge also stated that the petitioner’s condition “simply was inoperable due to his condition of multiple levels impeded in his lumbar spine.  Therefore, his disability rating is construed as worse than one who could obtain relief from a procedure or operation.”

Dr. Maletsky’s report was also admitted into evidence without testimony by the doctor on behalf of respondent.  Dr. Maletsky found 2% permanent partial disability.  Dr. Maletsky noted that petitioner had x-rays of his spine in 2008, four years before the accident, but the Judge of Compensation found Dr. Maletsky’s report was not as credible as that of Dr. Gaffney because in part he did not address the fact that petitioner had multiple levels of discs which were impaired.  She found that Dr. Maletsky did not “adequately address petitioner’s increased symptomology as being related to the last work incident.”

The Judge awarded 47.5% permanent partial disability or $153,900.  Schiavone appealed and argued principally that the judge’s conclusions were not supported by the record.  The Appellate Division first acknowledged the expertise of the Judge of Compensation in awarding disability.  However, in this case the Appellate Division found two areas where the Judge of Compensation drew conclusions that were not supported by the record.  “[W]e are constrained to vacate the judgement and remand for reconsideration as we conclude there was no evidence to support the findings that Van Artsdalen’s injury was inoperable or that he took few days off during his years of employment.”   The Court added that “neither Van Artsdalen nor the experts stated these facts or opinions, nor was there any other evidence presented from which the judge could have logically inferred them.”  For these reasons the award was reversed.

This case would not have been reversed had there been evidence in the record that petitioner did not take time off in the past and had been advised that his condition was inoperable.  Both petitioner’s attorney and respondent’s attorney took risks when they did not produce the live testimony of their experts.  Through live testimony petitioner’s attorney could have focused on whether the back condition was inoperable, thereby giving the Judge of Compensation support in the record for her conclusion.  Respondent’s expert could have cross examined effectively on petitioner’s prior condition and alternative explanations for why petitioner was never advised to have surgery on his spine.  This was simply a case where the sparse record did not support some of the conclusions of the Judge of Compensation, and that was mainly due to the failure to bring in the experts.  Without that testimony, 47.5% seemed extremely high for an unoperated back condition.

The lessons learned are to bring in experts when trying cases and only try cases on reports where there is very little money at stake and there are no real issues of causation.

Last week I wrote about how employers should not handle reopener claims, namely trying them on reports without expert testimony.  The case of Kalucki v. United Parcel Service, A-3486-15T3 (App. Div. August 15, 2017) demonstrates the winning strategy for employers to adopt in reopener claims.

The case involved an injury that took place many years ago to petitioner, who was a clerical worker for UPS.  The most recent reopener award took place on June 24, 2009.  Petitioner received two separate awards of disability.  In one claim he received an award of 40% permanent partial disability for the left shoulder and neck subject to a credit of 37.5% for a prior compensation award.  In the other claim petitioner received 17.5% of partial total for bilateral carpal tunnel syndrome subject to a credit of 15% for a prior carpal tunnel award.  The petitioner then reopened both awards seeking an increase in both cases.

Petitioner testified at trial that his left shoulder and neck were more restricted, and it was painful to move his neck from side to side.  He said he had problems laying on his left side.  He experienced shoulder aches and numbness.  He also said that he lost grip strength in his left hand.

Both parties brought in experts to testify.  Petitioner’s expert had examined him four times in the past.  This expert was not a board certified orthopedic physician.  The expert found tenderness and spasm in the left shoulder, limited range of motion, and tenderness in the wrists.  The expert increased his estimate by 25% of the right hand, 25% of the left hand, and 30% in the neck.  The overall disability estimates, when combined, exceeded 100%.

Respondent produced a board certified orthopedic physician who had examined petitioner once before in 2007.  Respondent’s physician actually ordered an x-ray of the shoulder and found no objective findings of any significant pathology in the shoulder or changes in the neck.  In fact, the orthopedist said that petitioner’s range of motion had improved from the time of the last exam.  Overall petitioner had no increased disability with respect to the shoulder, neck or bilateral carpal tunnel.  The expert did concede negative grip strength in the right hand, but he found no atrophy and no decreased sensation.

The Judge of Compensation ruled that there was no objective evidence of increased disability and dismissed the reopeners on the neck, shoulder and hands.  He noted that the only evidence petitioner produced was subjective complaints.  That did not meet the standard of Perez v. Pantasote, 95 N.J. 105 (1984).  Significantly, the Judge observed that petitioner had not seen a doctor or received any treatment since the time of the last award.  Further, petitioner was able to continue to perform his full-duty job without the need of any accommodations. Finally, the Judge stated that respondent’s expert was more qualified than petitioner’s expert.  The Judge was critical of the petitioner’s expert: “The Court finds that claimant’s expert’s finding of an over 100 percent disability when combined, does not ring true based on petitioner’s continued full-duty employment.”

Petitioner appealed the dismissal of the reopeners and argued that the Judge should not have given greater weight to respondent’s doctor based on credentials.  The Appellate Division disagreed and ruled that it was entirely appropriate for the Judge of Compensation to consider the added credentials of the respondent’s doctor, based on his Board Certification, as a factor in credibility of the experts.  The Appellate Division also commented that much of petitioner’s testimony at trial on this reopener was exactly the same as what he testified to at the time of the prior award. The Appellate Division said,  “As just one example, claimant’s expert testified that petitioner’s range of motion in his neck on examination in 2011 was limited by twenty degrees, as compared with a higher limitation of twenty-five percent revealed on examination in 2007.”  Finally, the Court commented that petitioner continued to work full-time and never even saw a physician for treatment since the time of the prior award, taking only over-the-counter medications since then.

For these reasons the Appellate Division affirmed the Judge of Compensation’s dismissal of these claims.  The case illustrates the proper way to handle a reopener claim.  Respondent did everything right here, retaining a board certified orthopedic physician, comparing the complaints with those at the time of the prior settlement, and emphasizing the lack of objective evidence produced by petitioner.   This case provides a textbook case on how reopener claims can be won by employers when handled wisely.

There is a cardinal rule in workers’ compensation trials that employers and defense counsel must follow: never try a case on reports unless the exposure is minimal.  To put it another way, where the exposure is significant, the employer must bring in a medical witness for testimony and cross examine the petitioner’s expert.  The employer in Roy v. Marsden & Sons Electric, A-1324-15T1 (App. Div. August 9, 2017) violated that rule by trying the case on medical reports alone and paid the price.

The case involved a reopener of an award of 22.5% permanent partial disability or $31,518.  The initial award for an accident on July 26, 2011 was described as being “for orthopedic and neurologic residuals of the lumbar spine for a compression fracture at L1 and L2 and for a bulging disc at L5-S1.”  The reopener was timely filed, and petitioner saw Dr. John Gaffney for petitioner and Dr. Francis Meeteer for respondent for reevaluations.

Dr. Gaffney noted in his reexam that petitioner had difficulty transferring positions from a supine to sitting to standing position due to spinal pain.  He found spasm and tenderness in the lumbar areas of the spine.  He also found sensory deficit with pinprick into the bilateral extremities.  He raised his estimate by 45% for residuals of a compression fracture of the superior endplate of L1, and compression fracture of the superior endplate of L2; new progressive lumbar disc injury with bulging discs at L3-4 and L4-L5, and a disc osteophyte complex at L5-S1; persistent and progressive lumbar radiculopathy; lumbar fibromyositis syndrome; and chronic pain in the lumbar spine.”   He related all of these findings to the original accident in 2011.

Dr. Meeteer for respondent had not seen petitioner originally.  There is no explanation in the appellate division decision on why respondent chose not to use the original physician.  Usually respondents return to the same physician on reopener exams.  Dr. Meeteer found no spasm, no tenderness, and clinical tests were generally negative. In other words, the two experts had completely different findings.  Dr. Meeteer estimated five percent permanent partial disability for a compression fracture at L1 and L5 and disc bulging of the low back.

Petitioner said at the initial 2012 hearing that he experienced a severe, stabbing pain in his back that radiated down to both feet lasting an hour.  In the reopener hearing in 2015 he said that the radicular pain was there constantly.  In 2012 the pain would awaken him from a night’s sleep occasionally.  By 2015 the pain woke him two or three times each night.   In 2012 he could walk three miles and lift objects up to 30 to 40 pounds.  In his 2015 testimony he could no longer walk long distances due to fear that he might not be able to walk back.  He said he used a long shoe horn to put his shoes on because he could no longer bend down to do so.  He seldom lifted objects weighing more than a grocery bag.

Petitioner did have treatment after the initial award. Dr. Joseph Zerbo prescribed a course of physical therapy and a work hardening program as well as an FCE which noted that petitioner could return to full-time work.  He underwent an MRI on January 8, 2015 which revealed “internal disc derangement at L4-5 and L5-S1 producing discogenic syndrome.”  Dr. Zerbo noted that the compression fractures had healed satisfactorily.   He recommended a lumbar fusion surgery which petitioner declined.

The Judge of Compensation explained that both counsel had agreed to allow her to decide the case by submitting medical reports without live testimony from any physicians or experts.  She noted that the sole issue before her was whether there was an increase in petitioner’s previous award and if so, in what degree.  She also noted that petitioner was in obvious distress.  She also observed that Dr. Gaffney saw petitioner in 2012 and that Dr. Meeteer had not seen him previously.  She found Dr. Gaffney to be more credible partly because he had seen petitioner twice.  She further noted that petitioner had seen Dr. Joseph Zerbo after the initial award for treatment.  The Judge of Compensation awarded petitioner another 20% for a total of 42.5% or an increase from $31,518 to $121,125 or approximately $89,607 in new money, almost four times the amount of the prior award.

Respondent appealed and argued principally that there were new findings on the MRI in 2015 that were not causally related to the original accident and that there was no credible medical evidence linking these findings to the original accident.  Respondent also argued that there was no support for an increase of 20%.  The Appellate Division flatly rejected these arguments precisely because respondent agreed to try the case on reports:

. . . Respondent is critical of petitioner’s expert’s reports because the reports’ explanations concerning the extent of petitioner’s increased disability and the causal relation of that increase to the original accident does not contain sufficient elaboration.  Yet, by agreeing to present the medical evidence in reports rather than by experts’ testimony, respondent now criticizes the JOC for doing precisely what the parties tasked her with doing; namely, reviewing the documentary evidence as a whole and determining the credibility of conflicting reports based on all the documentary evidence as well as petitioner’s testimony.  That is precisely what the JOC did, and her findings are amply supported by the documentary evidence and petitioner’s testimony.

In short, the Appellate Division said that if you say you waive live testimony from the experts, you cannot effectively argue causation issues at trial or on appeal.  You are limited to arguing whether there is evidence supporting additional disability.  You need expert testimony to assist the trier of fact when it comes to causation issues.  Judges are not doctors and cannot decide from paper evidence which findings are work related without live testimony on which to base their conclusion.  That has always been the rule.  It may cost one or two thousand dollars to produce a medical expert, but the benefit far outweighs the cost in almost every case.  In this case respondent apparently had some legitimate arguments to make on causation but failed to bring in the experts to make those arguments.

Here the potential exposure was very high because the prior award was not far from the 30% level where awards become much more expensive in New Jersey.  It turned out that the reopener award amounted to nearly four times as much money as the original award.  The case was unusual in that petitioner never had major surgery and was able to work full time but obtained an award of 42.5%. The lesson is clear:  if a case is worth trying, it is worth bringing in the medical experts to testify.

Permanency awards in the New Jersey Division of Workers’ Compensation can amount to very significant dollars.  An award of 40% partial permanent disability at 2017 rates amounts to $114,720 – tax free.  Furthermore, the case can be reopened within two years from the last date of payment for further permanency benefits.  If the employee reopens the case and obtains another 10% hiking the 40% award to 50%, the employee will collect an additional $64,680, again tax free.  Usually the employee in New Jersey is back doing the same job but is eligible for a substantial permanency award because New Jersey (unlike Pennsylvania and New York) is not a state where proof of lost wages or earning capacity is required for permanency benefits.  Rather, it is a loss of physical function state.

Many clients have asked what kind of evidence and testimony does a Judge of Compensation focus on to decide the appropriate percentage of disability.  The answer is two-fold:  first the judge will review the objective medical studies, i.e., MRI, CT scan, EMG, surgery records along with the medical IMEs from the opposing experts.  Next, the judge will focus on the testimony of the claimant in court regarding the effect of the accident on his or her non-work activities or work activities. The claimant needs both to get an award.  Assuming that the employee is back to work doing the very same job, the focus will exclusively be on the non-work activities that the employee can or cannot do.

So this is where employers can help themselves immensely.  Consider that the testimony of the claimant in court may be that the employee can no longer play basketball, or go to the gym, or garden in a crouched position due to back pain even after surgery has occurred.  Those are significant complaints to most judges.  They are given at the time of settlement.  Defense lawyers and adjusters do not know if these complaints are accurate.  Suppose, however, the employer is well aware that the employee is still playing basketball and going to the gym, and suppose the employer has communicated that valuable information to the carrier/TPA and defense counsel? That information becomes crucial on cross examination of the petitioner by defense counsel.  It raises issues of credibility and sharply reduces the value of the case because an award of permanent disability must be supported by proof of a material impact on work or non-work activities.  Without that, no award can be entered.

Now consider an even greater service that employers can provide for themselves which will lead to enormous savings.  As I have already indicated, there must be testimony by the claimant about proof of a material impact on non-work activities – or in rare cases, work activities.  The comparison is between the employee’s level of activity before the accident and the level of activity at the time of the settlement.  The logic is the employee gets paid money because he or she used to be able to enjoy many things in life, and do many things, that he or she cannot do as a result of the accident. But how can employers establish the level of activity before the accident?  If that could be established, wouldn’t it make a huge difference in cases?  Yes it would, and it is easy to establish the level of activity before an accident.

Here’s the answer:  employers can establish the pre-accident level of activity by use of an employee accident form, signed and filled out entirely by the employee, which asks the employee, among other questions, what recreational or social activities the employee has engaged in during the past few years.  The form is also used to ask how the accident occurred, whether there were witnesses and other pertinent information.  This form costs nothing at all but can save untold amounts of money for employers in negotiations and at settlement.

Suppose Claimant James Smith has a back injury on January 1, 2016 and fills out an employee accident form right away.  To the question about prior recreational and social activities, the claimant says “No sports at all.  No gym activities. I only watch television.”  At the time of settlement in August 2017, in order to support a substantial award, the employee testifies that he can no longer lift weights in the gym, play basketball or do mountain biking.  Those are his three main complaints.  The defense attorney, armed with the employee accident form, successfully cross examines the employee on his statement in the employee accident form filled out by the employee himself at the time of the injury! The lawyer enters that document into evidence to prove that this employee did not even play sports, did not belong to a gym, did not lift weights, and just watched TV by his own admission.  Defense counsel has attacked the employee’s credibility and now withdraws the settlement offer, arguing under Perez v. Pantasote, that there is no proof of a substantial impact on non-work activities.  As noted above, no judge can approve a settlement no matter how much surgery has taken place without establishing a substantial impact on work or non-work activities.

These are winning techniques that quite literally cost nothing and take almost no time, and they can save enormous sums of money for employers.  Whether your company has a carrier, or a TPA, or is self-insured, the message is simple:  communicate the information your company has to your defense attorney and adjuster about activities that the employee is engaged in: hobbies, sports, gym memberships, and anything else along these lines.  And use employee accident forms.  The undersigned has a good one for Capehart clients.  Unfortunately, most defense attorneys enter negotiations without having any idea what sports or recreational activities an employee engaged in pre-accident or engages in post-accident.  The best and most useful information is almost always contained in the workplace itself through co-employees and supervisors, and that information, if extended to defense counsel, can completely change the outcome of any comp case to the benefit of the employer.

Roy Hendrickson worked for thirty years at UPS.  His first 19 years were as a package car driver making over 100 stops per day to deliver or pick up packages.  He injured his back in 1992 but did not file a workers’ compensation claim.   In 2002 he injured his back lifting a heavy package, losing two months of work time.  He was diagnosed with sprains, degenerative disc disease and stenosis.  He received an award of 15% permanent partial disability.   He reopened that claim in 2004, settling for 17.5% credit 15% for the prior award.

In 2006 Hendrickson began working as a feeder driver for UPS, driving tractor-trailers to New York City, the Meadowlands, Secaucus, Cranbury and locations in New England.  He drove trucks without air ride suspensions, testifying that he felt shocks and vibrations over pot-hole ridden roads.  He said this activity caused additional pain in his low back, requiring acupuncture treatment.

In 2008 Hendrickson also began working as a shifter driver, which required backing the truck into a trailer and “hitting the pin” to connect the two.   He testified that every time he made the connection, around 75 times per day, there was an impact such that he felt as though he were being punched in the back.

In 2012 Hendrickson was at a mall and collapsed due to pain and numbness radiating down his legs from his low back.  His chiropractor sent him for an MRI in August 2013, which showed herniated discs at L3-4 and L4-5 along with severe stenosis.  His chiropractor refused to treat him after the MRI study, so Hendrickson saw a surgeon who recommended bilateral nerve blocks.  When that failed to relieve his pain, Hendrickson opted for surgery in March 2014 to decompress the disc at L4-5.  The surgery provided three months’ relief, but a repeat MRI showed persistent disc herniation at L4-5 with impingement on the L5 nerve root.  Hendrickson said he continued to work in pain but avoided any non-work activities that might increase his pain.

Hendrickson filed a Claim Petition and a Motion for Medical and Temporary Disability Benefits, asserting that UPS should pay for his back surgery and lost wages based on occupational injuries over the years.  UPS opposed the motion and argued that the claim was time barred because the back problems stemmed from the 2002 trauma.  That claim had not been reopened but once, concluding many years ago.

Petitioner produced testimony from Dr. Michael Cohen, who contended that petitioner’s back problems were not the result of trauma suffered in 2002 but rather repetitive occupational stress over the years.   Dr. Nirav Shah on behalf of UPS testified that petitioner suffered an injury to his back on April 16, 2014 from lifting packages.  However, the record did not support Dr. Shah’s assertion that there was a work accident on April 16, 2014.   Dr. Shah testified that petitioner’s back revealed multiple herniations that were the result of chronic degenerative changes in the spine.  He said these changes progressed naturally, not from repetitive occupational exposures.

The Judge of Compensation found Dr. Cohen to be more persuasive than Dr. Shah.  The judge credited petitioner’s testimony that the 2006 transfer to feeder and shifter work worsened his spine condition.  The judge noted that petitioner frequently bounced around in his truck when driving over potholes or bumps in the road.   The judge further noted that the action of hitting the pin in connecting vehicles created a sensation of petitioner being hit in the low back.  He found Dr. Cohen credible in explaining how driving a tractor trailer objectively worsened petitioner’s low back.   The Judge found Dr. Shah less than credible because in part Dr. Shah mistakenly believed there was a 2014 traumatic accident.  The judge found that there was aggravation and acceleration of petitioner’s spine from 2006 to 2013 caused by work.

UPS appealed and argued again that petitioner’s claim petition was barred by the statute of limitations because everything went back to 2002 accident.  The legal argument was interesting, pitting two major case precedents against each other.  UPS argued that this was like the case of Peterson v. Hermann Forwarding Co., 267 N.J. Super. 493 (App. Div. 1993), certif. denied, 135 N.J. 304 (1994).  In that case a trauma occurred to a truck driver, whose back got progressively worse after the next five brief trucking jobs he worked, eventually leading to total disability.  The Appellate Division placed responsibility in that case on the first employer with the traumatic event, stating that there was no objective proof of worsening over the next five employments.  All of the occupational claims were dismissed.

Petitioner relied on the case of Singletary v. WAWA, 406 N.J. Super. 558 (App. Div. 2009).   The rule in that case was that “Very short periods of employment . . . may allow no reasonable inference of material contribution to disability. In contrast, long periods of physically taxing employment, such as the five years Singletary worked at WAWA after her December 2001 accident, may reasonably support a finding of material contribution of disability.”  The Appellate Division disagreed with UPS and concluded that petitioner’s occupational exposure was largely responsible for causing petitioner’s medical issues.  Counsel for Hendrickson, Mr. Richard Schibell, Esq., contended that petitioner’s back pain progressively worsened over the years due to ongoing stressors at work, and that there was no statute of limitations issue since petitioner was still being exposed to occupational injuries when he filed the claim petition.

The case can be found at Hendrickson v. UPS, A-3627-15T2 (App. Div. July 11, 2017).  The case shows how an occupational orthopedic disease claim must be proved in order to prevail in workers’ compensation.  There must be detailed testimony by the employee or co-employees of credible physical stressors, and then credible medical testimony linking those physical stressors to the medical condition afflicting the claimant.