Key Defenses

Employers must carefully view job descriptions because ADA law suits often turn on the wording of those job descriptions.  In Stephenson v. Pfizer, 2016 U.S. App. LEXIS 3863 (4^th Cir. 2016), a long-time sales person for Pfizer developed vision problems which disqualified her from driving.  Stephenson had been an extremely successful sales representative who had been inducted into Pfizer’s “Hall of Fame” for sales representatives.  She would spend eight of her ten hours each day meeting with physicians in their offices to discuss the merits of certain pharmaceutical products. She had been doing this successfully since 1984, and Pfizer gave her a car to travel from her home to sales meetings.

In 2008 Stephenson developed a vision problem which caused her to lose 60% of the vision in her left eye.  Nonetheless, she was able to drive without accommodations.  However, in 2011 the condition afflicted her right eye as well, causing the loss of 60% of the vision in that eye and disqualifying her from driving.  On October 27, 2011 Stephenson asked Pfizer to provide her with a driver to take her to sales meetings.  She researched pricing estimates from potential drivers and shuttle services.  Pfizer said that request was inherently unreasonable, and the company encouraged Stephenson to move to another position in the company which did not require driving.  Stephenson declined that offer and brought suit under the ADA.

The Pfizer job description for sales representative did not specifically list driving as an essential job function.  In spite of this, the district court granted summary judgment to Pfizer, ruling that driving was an essential function of the job whether or not it was included in the job description.  The court rejected Stephenson’s argument that travelling was really the essential function.

On appeal the Fourth Circuit Court of Appeals noted that the job description for Stephenson’s position did not require that the sales rep have a driver’s license.  Discovery showed that there were postings for seven other similar positions in 2014; five postings did not mention possessing a driver’s license while two did mention it.

The Appeals Court began by observing that the ADA does not require an employer to reassign any essential job function nor require the employer to hire another employee to make reasonable accommodation.  However, the Court said that Stephenson was entitled to a trial in this case on the issue of whether driving was an essential job function.  The Court said:

If driving is an essential function of her sales position, Stephenson – who cannot drive no matter the accommodation – is not qualified under the ADA and her claim fails as a matter of law.  On the record before us, however, summary judgment is not warranted because there is a genuine dispute of material fact as to whether the essential function at issue is driving or travelling.  That factual issue is for a jury to resolve.

The Court explained that an employer must accommodate an employee with a disability who is qualified, which means one who is able to perform the essential functions of the job.  So the threshold issue in this case came down to whether driving or travelling is an essential function.  Had the employer included in Stephenson’s job description a statement that driving was an essential job function along with the possession of a driver’s license, there is no doubt that Pfizer would have won this case on appeal.  Courts generally defer to the employer on what is or what is not an essential job function, but when an employer says one thing and the job description says another, that inconsistency hurts the employer’s position.

Mark Richardson worked for the Chicago Transit Authority as a Bus Operator from 1999 to 2012.  He took an extended medical leave from work and attempted to return to his job in September 2010.  The Authority sent plaintiff for a fitness exam, and the doctor cleared Richardson to return to work. He was next required to submit to a safety assessment, which he contended turned out to be different than the normal safety assessment required of bus operators.

The Authority eventually rejected Plaintiff’s request to return to work.  Plaintiff then filed a charge with the EEOC, stating that the Authority discriminated against him based his disability, namely severe obesity.  After the parties were not able to resolve the charge, plaintiff sued in federal court.

Defendant Transit Authority moved to dismiss the case right away before doing any discovery by arguing that the plaintiff’s complaint was fatally flawed.  The Authority argued that obesity is not a disability unless it is due to a physiological disorder and further contended that since plaintiff never alleged that there was a physiological basis for his obesity, his complaint must be dismissed.

The Court noted that the Americans with Disabilities Act Amendments Act of 2008 expanded coverage under the ADA.  The Court reflected on 42 U.S.C. 12102(3)(A), which states:

An individual is ‘regarded as having such an impairment’ if the individual is subjected to a prohibited action because of an actual or perceived physical or mental impairment, whether or not that impairment substantially limits, or is perceived to substantially limit, a major life activity.

The Court also reviewed conflicting decisions nationally on the question of whether a plaintiff must prove a physiological basis for obesity to establish a disability.  It observed that there is a split among Circuit Courts on what is required for obesity to be considered a covered disability.  Some Circuit Courts have required proof of a physiological basis for obesity while others have not.

In this case the Court did not decide which approach was right, but it said that “[e]ven if Plaintiff is ultimately required to prove that his obesity was caused by a physiological disorder, he was not required to allege the same.”  In other words, plaintiff’s complaint was sufficient to allow him to move forward with discovery and to attempt to prove his case.

The case can be found at Richardson v. Chicago Transit Authority, 2016 U.S. Dist. LEXIS 143485 (N.D. Ill. 2016).  It is an interesting case because obesity claims are likely to become a major area of litigation given both the near epidemic levels of obesity in the United States and the expansion of coverage of disability under the ADAAA.

The term “idiopathic defense” is widely misunderstood.  Practitioners need to appreciate when the defense applies and who has the burden of proving an idiopathic defense.  In New Jersey, and in most states, the burden is on the employer to prove an idiopathic defense.  The word “idiopathic” comes from the Greek: “idios” meaning one’s own, and “pathos” meaning suffering or illness.  It is defined in medical dictionaries as a disease or condition that arises spontaneously or for which the cause is unknown.  In law it means more precisely a personal condition which in and of itself explains the injury or illness of the claimant.

At the outset, it is important to distinguish claims where there is no work connection at all: these are not idiopathic claims and petitioner has the burden of proof. The case of Meuse v. Egg Harbor Township Police Department, No. A-4553-90G5 (App. Div. May 6, 1992) involved a police officer who was walking down steps at the station when he felt pain in his knee.  Apparently, a piece of bone broke off in the knee but the officer did not fall or strike anything.  The respondent never proved that petitioner had prior treatment in the knee because there was no need to.  It was petitioner who had the burden of proving that his knee problem arose from work, but he could not do so.  There was really no connection at all with work other than the fact that this happened at work.  The Appellate Division stated that this could have happened at any time and at any place and was not compensable.

The burden of proof always rests on the claimant to show that his or her condition occurred during work and arose from work.  The first concept is one of time; the second concept is one of causation.  If there is no work connection, then the case fails on that test.  For example, if an employee were just sitting at a desk and began to feel back pain, this would be denied as having nothing to do with work.  The respondent would win this case not because the injury is idiopathic but because it does not arise from work.

Now let’s look at an example of an idiopathic claim. In McNeil v. Township of South Brunswick Police, No. A-0777-11T1 (App. Div. May 9, 2012), Officer McNeil was responding to a call and felt pain in his back while hurriedly exiting his vehicle.  He was not sure if he bumped the steering wheel on exiting the vehicle.  Later that day he went to the hospital for treatment and reported the incident. The workers’ compensation doctor thought he had at best a mild strain.  McNeil eventually brought a motion to compel surgery on his back for an extruded disc.

Respondent arranged an IME which revealed that the officer had a long history of low back problems including prior herniated discs and prior surgery, and in fact the very herniated disc at issue had been known for quite some time.  The Judge of Compensation found that the act of exiting the vehicle did not cause any of the pathology in petitioner’s spine, and the physical act of exiting the vehicle was not consistent with the MRI results.  The Appellate Division affirmed and found that that exiting the vehicle was not the causal origin of petitioner’s back condition.  It said that petitioner must show “whether it is more probably true than not that the injury would have occurred during the time and place of employment rather than elsewhere.”

In an idiopathic claim, the burden of proof shifts to the employer.  When an employee  presents enough evidence to show that some event happened at work causing an injury, then the employer has the opportunity to rebut the claim and argue that the real cause is a long-standing or prior medical condition.  This burden shift is discussed in Verge v. County of Morris, 272 N.J. Super. 118 (App. Div. 1994).  The facts in Verge involved an employee who tripped on a rug but did not fall down.  The petitioner argued that her knee injury was occasioned by this twisting motion, and that the trip on the rug was the work connection.

The Judge of Compensation dismissed the case saying that this could have happened anywhere, but the Appellate Division reversed on the grounds that the employer should have the obligation to prove that the knee condition was preexisting and that the prior knee condition caused the knee pain.  The Appellate Division criticized the trial judge for failing to put the employer to its proofs on the idiopathic defense. “We hold that if petitioner’s ‘slip’ is to be characterized as an ‘idiopathic event,’ it must be found to be one which was caused by ‘a purely personal condition having no work connection whatever.’”  The appellate court said that petitioner had discussed prior problems and surgeries with her left knee but had stated she had no problems with her left knee since 1985.  The court clarified, “If petitioner sustained an idiopathic injury because there was no slip to cause her knee to twist in the first instance, then she cannot recover, as there was no subsequent fall or impact capable of causing a secondary injury.”

In considering Verge, what the court was saying was that the employer had to prove that the petitioner did not really slip, but rather that her knee condition caused the event due to its preexisting condition. For instance, if the employer had been able to prove that petitioner’s knee had been buckling for weeks due to a prior condition and it just buckled once more, completely unrelated to the impact of the rug, then the injury would have been idiopathic.  Similar to Verge is Shaudys v. IMO Industries, 285 N.J. Super. 407 (App. Div. 1995).  There an employee arrived at work in the company parking lot, exited his car and then, as he turned to walk toward his building, took a step with his left leg while slamming his car door shut.  In that moment he felt knee pain and heard a pop.  The court ruled for the employee: “… IMO would have had to prove by a preponderance of the evidence that petitioner’s injury was caused by a pre-existing condition and that petitioner’s twisting step towards his workplace did not contribute causing his injury.”

The lesson is this to all workers’ compensation practitioners.  When you have a case where there is really no connection at all to the employment, you do not have an idiopathic defense case.  The burden is on the claimant, who will lose if she cannot show that the injury arose from work.  For example, when Mrs. Coleman got her permanent wave solution and came to work the next day and lit a cigarette, causing her hair to ignite in flames, that was not an idiopathic defense case.  Petitioner lost because the act of lighting a cigarette had no connection to work.  She could not show that the injury arose from work. Coleman v. Cycle  Transformer Corp., 105 N.J. 285 (1986).  The idiopathic defense only arises after the employee has articulated some work event, even a minor one, which then shifts the burden to the employer to prove that the medical condition was preexisting and in fact caused the minor incident.

In essence, there are two competing theories in workers’ compensation when it comes to causation.  An employer takes the employee as he finds him is a dominant theme in workers’ compensation.  That means that the employer cannot prevail just because an employee is shown to have prior knee problems or prior low back problems.  The reason for that rule is that virtually every employee has prior conditions that he or she brings to the workplace.  So if the work effort “aggravates” the prior condition (i.e., objectively worsens it), then the employer is liable to pay workers’ compensation benefits.  On the other hand, if the employer can show that the work effort did not really cause the injury but that the preexisting condition was already there and was the cause of the pain, then the employer is not liable.

The idiopathic defense is, in a very real sense, the antidote to the maxim that the employer takes the employee as he finds him.  To win such a defense, the employer must obtain prior family doctor records, prior surgical records, prior car accident history, and the like, because a workers’ compensation judge will not rule in favor of an employer with just proof that a person had prior arthritis. This information must then be transmitted to a medical expert for an opinion on whether the cause of the symptomatology was solely due to the prior medical condition, not the alleged work event.  Having a prior medical condition like osteoarthritis is not enough to win an idiopathic defense.  There must be proof that the prior condition was treated and significant enough to be an independent cause of the petitioner’s injury.  Informal discovery and use of ISO and other valuable resources can turn the tide on a workers’ compensation case.  This is particularly important in a state like New Jersey where there is almost no formal discovery. Only with aggressive informal discovery can employers prevail in workers’ compensation in New Jersey.

The case of Jose Moreira v. Carlos Peixoto, et. al., A-5741-12T1 (App. Div. September 10, 2015) presents a complex tale of insurance fraud that ends with an important clarification about the lien rights of an employer and the potential challenges to lien calculations by employees.

Jose Moreira was injured working privately on a house owned by a manager of Macedos Construction Company, Inc. (Macedos).  The company (Macedos) fraudulently reported to its workers’ compensation carrier, Virginia Surety Company (VSC) that Moreira was a full-time employee of the company.  In addition to this misrepresentation, Moreira signed a written statement to VSC’s adjuster stating that he was a full-time employee of Macedos who had been hired and injured on the same day, namely October 1, 2005.  Moreira also filed a claim petition asserting that he worked for Macedos when he was injured.  Based on these misrepresentations, VSC paid $260,864 in workers’ compensation benefits for Moreira.

Astonishingly, Moreira next filed a civil law suit against Macedos, alleging that he was a “business invitee” of Macedos on the day of his accident and not an employee.  He settled this case for $3.7 million against Macedos.  VSC filed a counterclaim against Macedos alleging that the company committed fraud under the Insurance Fraud Prevention Act and under the New Jersey Workers’ Compensation Fraud Act.  The jury in the fraud trial exonerated Moreira of fraud, but the jury did find Macedos guilty of fraud under both Acts.  For reasons that are unclear, the jury awarded VSC no damages for the fraud violations.  However, the judge awarded VSC $1,031,330 for counsel fees and trebled that amount under the Insurance Fraud Prevention Act.

Next VSC pressed its subrogation rights against Moreira since he recovered $3.7 million dollars in his settlement with Macedos.  Even though Moreira had filed a claim petition asserting that he was an employee, he raised a rather bold defense.  He contended that since he was not in fact an employee of Macedos, the workers’ compensation lien did not apply.  The judge ruled that Moreira could not have it both ways, stating that since “Moreira was believed to be an employee of Macedos and actually received the workers’ compensation benefits, the lien was valid even though Moreira was not an employee.”  This meant that VSC would be entitled to reimbursement of two thirds of its payments or about $172,877.

On appeal to the Appellate Division, Moreira argued both that he was not an employee and should not have to pay back the lien.  Further, he argued that VSC failed to prove that the medical costs were reasonable and necessary.  The Appellate Division rejected flatly the non-employee argument:

Here, Moreira held himself out as an employee of Macedos when he submitted the written statement to VSC’s adjuster and applied for workers’ compensation benefits.  Although the jury found he did not act fraudulently, he still received workers’ compensation benefits on his representations.  Thus, permitting Moreira to retain the workers’ compensation benefits paid by VSC would allow him to obtain a double recovery to which he had no more right than if he was a legitimate employee of Macedos.  Accordingly, we conclude that VSC has a valid lien on the settlement proceeds.

The next issue which the court considered related back to an important case, Raso v. Ross Steel Erectors, 319 N.J. Super. 373 (App. Div.), certif. denied, 161 N.J. 148 (1999).  That case focused on what payments are lienable under N.J.S.A. 34:15-40 and held that ordinarily rehabilitation nursing expenses are only lienable if the employer can prove the care benefited the employee and was reasonable and necessary.  Moreira argued that the judge improperly included in the lien calculations non-reimbursable payments made to VSC’s claims administrator and a medical case management company.

The Appellate Division made a key distinction at the outset between care selected by the employee and care selected by the carrier. “Moreira cannot argue that the workers’ compensation payments VSC made directly to him or to health care providers he selected were not reasonable and necessary to cure or relieve his injuries.”  Having said this, the court went on to discuss the differences between care chosen by the employee or by the employer/carrier:

Because N.J.S.A. 34:15-15 addresses the different issue of what an insurer can be forced to pay, and because an employee should not be able to select treatment providers and accept treatment and then claim it was unnecessary, we decline to extend Raso beyond insurer-selected medical providers.  Moreover, we do not require the insurer to carry its burden regarding insurer-selected providers until the plaintiff provides some evidence, such as a medical report or medical witness as in Raso, that the treatment was unnecessary, which Moreira did not do here.

In essence, the court held that as to care selected by Moriera, those bills could not be questioned at all regarding reasonableness and necessity.  As to care selected by the carrier, Moreira must first offer evidence that the treatment was not necessary before he can challenge the reasonableness and necessity of the care.

Lastly, the court remanded the case for a determination of whether VSC included non-reimbursable payments made to VSC’s claim administrator and a medical case management company in calculating the lien amount.  The court cautioned, “Just as ‘medical expenses’ under N.J.S.A. 34:15-40(b) should not include the salaries an insurer pays its employees for administrative work, it also should not include the fees the insurer pays an outside entity to do outsourced administrative work.”

This case is important for many reasons, and it is regrettable that it has not been published.  It offers one of the few serious discussions of the Raso case in regard to when an employee can challenge the reasonable and necessary standard with respect to lien inclusion.  It sets a new distinction between care chosen by the employee and care chosen by the carrier.  The case also provides a warning to employers to be careful not to include administrative charges in lien calculations.  For this reason, claimants’ and plaintiffs’ counsel routinely ask for a breakdown of the lien calculations to make sure the lien numbers are valid.  The case is also helpful in discussing two parallel fraud statutes, namely the Insurance Fraud Prevention Act and the New Jersey Workers’ Compensation Fraud Act.

Employers always struggle with this dilemma:  if a claimant receives an award for knee surgery related to a repair of a torn meniscus, does that mean that future knee treatment for arthritis in the knee must be the responsibility of the employer? This issue arises often when the subject at issue is a possible total knee replacement.  The case of Wake v. Township of Toms River, A-5876-13T2 (App. Div. September 16, 2015) provides guidance.

The petitioner, Jan Wake, received an award for the knee following a surgery to remove the posterior horn and the entire middle portion of the lateral meniscus.  Petitioner had preexisting arthritis in the knee.  The award that was entered in court referred to the work accident causing an “acute exacerbation of bi-compartmental degenerative joint disease.”   Several years later the petitioner reopened the case seeking further treatment related to arthritic problems in the knee.

Petitioner argued that the language of the prior order in referring to an “acute exacerbation of bi-compartmental degenerative joint disease” required the Township to accept future knee treatment because the language meant that the underlying condition of arthritis had been worsened.  Petitioner’s expert said that the removal of the posterior and lateral meniscus removed all of the shock absorbers between the two arthritic bones.  That materially exacerbated petitioner’s preexisting arthritis.

Respondent’s expert disagreed.  He said that the petitioner’s need for knee treatment is causally related to the prior degenerative arthritic condition and not the work related injury.  The expert further said that petitioner “would be suffering from the same symptomology had the work-related injury not occurred.”

The Judge of Compensation, the Honorable Ronald Allen, held that petitioner’s knee condition was degenerative in nature and agreed with respondent’s expert that the deterioration in the knee was due solely to advancing arthritis unaffected by the meniscal repair surgery.  The Judge dismissed the claim petition and petitioner appealed.

The Appellate Division affirmed the dismissal of the case:

It is well settled that a worker seeking benefits based upon increased incapacity bears the ‘burden of proving by a preponderance of the evidence not only the fact of increase but also that it is causally related to the original accident and resulting injury.’

The Appellate Division found that there was sufficient credible evidence to support Judge Allen’s reasoning.

This case is important for employers and defense practitioners because it is widely assumed that if someone with an arthritic knee has work-related surgery to repair a meniscal tear, this automatically means the employer must pay should the knee condition decline and require a total knee replacement.  But total knee replacement is generally due to severe arthritic conditions, not meniscal tears.  Petitioner has the burden of proving that the surgery to repair the meniscus in some way contributed to the worsening of the arthritic condition.  In this case, the language of the prior award did not help the employer because it referred to an acute exacerbation of bi-compartmental degenerative joint disease.  Nonetheless, the employer won no doubt in part to solid testimony from its expert.

Janice Davis was injured on April 23, 2007 in a work-related accident.  She filed a claim petition promptly against Yassien Mobility Assistance & Ambulance, Inc., her employer.  On October 1, 2007, Yassien filed an answer stating that it had no insurance for workers’ compensation.  The Uninsured Employers’ Fund (UEF) was joined in the matter as an additional party.

Yassien had previously obtained workers’ compensation insurance from Zurich American Insurance Company, which cancelled coverage in March 2006.  The accident happened over a year after the cancellation.

Subsequent to these events, the Supreme Court of New Jersey held that cancellation of insurance policies will only be upheld if all aspects of the statute are strictly followed.  N.J.S.A. 34:15-81 requires that the notice of cancellation be filed in the Office of the Commissioner of Banking and Insurance, together with a certified statement that the notice provided for in the statute has been given.  The Supreme Court of New Jersey in Sroczynski v. Milek, 197 N.J. 36 (2008) stated that even a minor deviation such as not filing the certified statement will void the cancellation.

In this case, Zurich did not file the certified statement required under N.J.S.A. 34:15-81, but Yassien failed to argue this issue until 2013.  The workers’ compensation case dragged on for many years until Yassien on February 9, 2013 filed a motion to amend its answer to the claim petition to join Zurich as an additional party.  This was the first time Yassien formally contended that Zurich failed to properly cancel its policy in 2006.

The Judge of Compensation ruled in favor of Yassien and held that Zurich failed to properly cancel the policy and would therefore have to pay the workers’ compensation claim.  Zurich appealed and argued that Yassien waited far too long to raise this issue — seven years, in fact.  The Appellate Division reversed and held that Zurich was correct in arguing that Yassien waived its argument for improper cancellation by waiting seven years.

The Appellate Division reasoned that it would not be fair to carriers if employers could challenge proper cancellation many years after the cancellation occurred.  The Court noted that Yassien did not raise the improper cancellation argument in 2007 or 2008 before the Sroczynski decision came down.   The Court suggested that if Yassien had raised this issue in 2007 or 2008, before the Sroczynski case had been decided, its position would have been stronger.  By waiting until 2013 to raise the improper cancellation issue for the first time, Yassien waived its right to challenge the cancellation.

The case can be found at Davis v. Yassien Mobility Assistance & Ambulance, Inc., A-0356-14T3 (App. Div. May 5, 2015).

SCENARIO ONE: An employee has a preexisting arthritic knee condition that his personal physician says will require imminent knee replacement. Three months later this employee steps off a truck at work and feels pain in the knee.  He reports the incident to his employer, who sends him for treatment.  The doctor orders an MRI, stating that he feels that the employee needs a total knee replacement. The doctor writes that this incident “aggravated” the prior knee condition.

SCENARIO TWO: An employee has suffered with severe back pain for many years, treating unsuccessfully with many surgeons, and has been informed she will have to live with the pain or get surgery. The employee is pushing a cart at work one day and feels pain in her back.  She sees a workers’ compensation doctor, who orders an MRI, which shows extensive spondylolisthesis.  The doctor states that this incident “aggravated the back condition.”  The employee now agrees to undergo fusion surgery.

Should the employer be paying tens of thousands of dollars for surgery and eventual permanency in these two scenarios? These are very common occurrences, but is there a common understanding of the term “aggravation?”  Does it mean one thing to doctors and another thing to workers’ compensation practitioners? In this writer’s experience, doctors often mean something completely different than attorneys.  One thing is clear:  if the treating doctor says that the work incident aggravated a prior condition, the Judge of Compensation will require the employer to pay for surgery and for permanency.

So the ultimate answer in both scenarios above depends on what the legal definition of “aggravation” is.  In both cases, the employee had been told of the need for surgery before any incident at work.   If the authorized doctor means that the work activity simply caused “more pain” on a temporary basis with no real change in the underlying condition, then no, the employer should not be paying for surgery or permanency.  Nonetheless, employers pay for these kinds of surgeries over and over again because the treating doctor says that work “aggravated” the prior condition.

There are two main reasons that workers’ compensation costs are overpaid in New Jersey, and for that matter, in most states: one is the lack of understanding of the legal definition of “aggravation,” and the other is the failure to take a detailed past medical history. A good explanation of what aggravation means comes from the case of Peterson v. Hermann Forwarding Co., 267 N.J. Super. 493 (App. Div. 1993), certif. denied, 135 N.J. 304 (1994)

In the Peterson case, the employee suffered a traumatic accident on October 1, 1982 getting out of his truck.  He missed a month of work and could no longer return to work with his company, which had ceased operations.  He obtained employment four months later with another trucking company.  He drove back and forth to New Jersey, stating that “empty trailer bouncing” caused his right leg to get numb.  He said he had to bend down in a squat position, which hurt his back.  He also said his neck would stiffen up as well.  He left this company, Mid-Florida, because the hours were too long.  Then he worked for four more trucking companies.  The last trucking company he worked for was Yellow Freight, where he worked only six days.  He ultimately found that the pain levels were intolerable, so he stopped working in June 1984 and never worked again.  He brought claims against all the trucking companies, and the Judge of Compensation found that the last employer was responsible for total disability because the work there aggravated his prior back condition.

On appeal the Appellate Division reversed, stating that all the areas of the body which hurt petitioner while working in these subsequent employments were the same areas he originally injured in 1982. “Clearly, because of his pre-existing conditions, petitioner’s work activities at the subsequent employment caused him to suffer greater pain than he would have experienced had he remained sedentary.  However, an employer is not required to compensate an employee for pain.  There must be proof of a work related injury or condition resulting in permanent disability.”

The court also added the following:  “While the work efforts of petitioner in this case may be considered strenuous by some, they were not unusual for petitioner’s line of work.  It was what he would have been able to do but for the October 1982 accident.” Another case which clarifies the need for objective evidence of worsening to satisfy the definition of aggravation is Kozinsky v. Edison Products Co., 222 N.J.Super. 530 (App. Div. 1988).

While Peterson was an occupational aggravation case, the logic that the court employed is important to appreciate.  The pain petitioner was complaining of at trial was the pain he had experienced all along, and there had been objective change over the years.  N.J.S.A. 34:15-36 only requires an employer to pay partial permanent disability if the work injury produces objective changes which either cause a lessening to a material degree of working ability or a substantial impairment of non-work activities.

Practitioners should ask doctors not whether the work conditions “aggravated” the prior condition but whether there is any objective change from the prior condition — or just a temporary increase in pain.  In other words, if one compares the prior MRI with the new MRI, and there is no change, there is no aggravation.  There may be some temporary increase in pain, but pain is subjective.  If there is a difference in the MRI results showing a worsening of the condition, then the employment activities will be found to have aggravated the prior condition.

As a practical matter, anyone who has a long-standing painful back or knee condition knows that almost any physical activity can cause a temporary increase in pain.  For a person with an advanced arthritic knee condition, even the act of walking can cause swelling and pain.  But a temporary increase in pain is not aggravation under the law.  Employers end up picking up enormous medical and indemnity costs mainly because treating doctors misunderstand the legal definition of aggravation, causing general health care costs to be passed through workers’ compensation.

Under the New Jersey Workers’ Compensation Act, the independent contractor defense is seldom successful, but one area where the defense is still viable is in the horse racing industry as seen in the recent decision of Perry v. Robert Horowitz Stable, A-3845-12T2 (App. Div. December 9, 2014).

Randolph Perry was a licensed horse owner and trainer and agreed to train horses for Robert Horowitz Stable (hereinafter “Horowitz”) at the Meadowlands Race Track.  In January 2004, he slipped on a patch of ice and was seriously injured.  He filed  a workers’ compensation claim against Horowitz.  He also recovered a substantial third party suit against the Meadowlands Race Track.  In the workers’ compensation trial, Perry argued that under both the control test and the relative nature of the work test, the court must find employment.

Perry argued that Horowitz controlled his duties sufficient to render him an employee.  He said that Horowitz would specify how many miles the horses would run, how to care for the horses’ feet, and how much the horses were to be fed.  In response, Horowitz argued that the stable did not have an ongoing training relationship with Perry.  While Horowitz did provide instructions related to the amount of miles to jog the horses and how to care for their feet, Horowitz countered that Perry had discretion to control other aspects of training.

Horowitz further contended that it did not furnish any equipment or stalls, nor provide Perry with food to feed the horses.  Horowitz said that the stable did not specify the type of food needed.  Rather, Perry would buy the food himself.  Horowitz further argued that Perry disregarded his instructions on how much food to provide and in fact provided less food because of Perry’s view that horses should not eat as much food as Horowitz required.

Perry maintained that he was substantially dependent on Horowitz under the relative nature of the work test.  However, it was noted in the record that Perry worked with many different owners for income over his 40-year career.

The Judge of Compensation found for Perry on employment, but the Appellate Division reversed.  The court noted that Perry did not receive a W-2 or 1099 from any of the owners for whom he trained horses.  He was not paid a specific wage, and there were no deductions or withholdings from Perry’s pay.  It said,  “This is indicative of an independent contractor.”  The court also relied on the fact that Perry rented stalls directly from the Meadowlands Racetrack where he performed his work.  It said this too was consistent with being an independent contractor because it shows Perry carried on his own business.  The court felt that Perry used his own methods to run his business.

There was one specific item of testimony that the court focused on in its opinion in favor of independent contractor status.  At trial Perry testified, “If I needed the money, I would [train the horses] for less.  If I didn’t need it, I would charge more.”  The court suggested that this was proof of an independent business, not employee status.  For much the same reasons, the court also found that Perry was not an employee of the New Jersey Horse Racing Injury Compensation Board.

This decision could clearly have gone either way.  The Appellate Division focused on the facts that tended to show Perry was running his own business together with the absence of a W-2 or 1099, but there were clearly some elements of control that favored Perry’s argument on employment.  The Appellate Division decision does not disclose how much money Perry earned from Horowitz as opposed to other trainers, nor how many days he trained horses for Horowitz.   What is more clear is that a jockey would have a much stronger argument for employment than a horse trainer would because of the predominance in New Jersey of the relative nature of the work test.

Workers’ compensation practitioners are very familiar with N.J.S.A. 34:15-54, which is the provision that allows a case to be dismissed for lack of prosecution, allowing the claimant one year to reinstate the case for good cause shown.  But the one-year period in the statute may not be as rigid as practitioners thought in light of Planes v. Village Townhouse, A-6026-12T3 (App. Div. November 25, 2014).

The case went back to an initial injury in 2000, which had led to a judgment for a foot injury.  That judgment was reopened in 2002 with further medical treatment provided by the respondent.  In fact, the case languished for nine years as a result of authorized treatment, discovery and expert reports.  The case was dismissed once for lack of prosecution on March 26, 2009, but that dismissal was vacated on October 22, 2009.  Then petitioner underwent hip surgery, which caused further delays.  Petitioner had diabetes and heart problems which further delayed his planned authorized foot surgery.

A hearing was set for December 16, 2010, but petitioner’s attorney requested an adjournment because he was serving as a court-appointed arbitrator in Essex County on that date.  The Judge of Compensation denied the adjournment request and entered an order dismissing the case for lack of prosecution pursuant to N.J.S.A. 34:15-54.  On the order were the handwritten words, “case not to be restored unless P.A. is ready to settle or try.”

After the dismissal occurred, petitioner finally had his foot surgery on September 15, 2011.  Petitioner’s attorney did not obtain the operative report from the treating physician until May 2, 2012.  The following day he forwarded the report to respondent’s attorney.   On May 17, 2012, petitioner moved to vacate the December 16, 2010 order of dismissal and restore the case to the active list.  That was one year and five months after the case had been dismissed.  Respondent opposed the application to restore the case.  The Judge of Compensation ruled on June 20, 2013 that he had no power to extend the one-year rule in N.J.S.A. 34:15-54.

The Appellate Division studied cases from the 1940s -1960s that suggested that the Division has the power to reopen judgments for fraud, mistake, inadvertence, or other equitable grounds comparable to the power that Superior Court judges have under Superior Court Rule 4:50.  Under Superior Court Rule 4:50 motions to set aside judgments should be made within a year after entry of judgment but can be made beyond that time frame for any reason justifying relief from the operation of the judgment or order.

In this case, the Appellate Division cited three reasons favoring restoration of the case.  One was that petitioner’s attorney had a legitimate reason not to attend the December 10, 2010 hearing since he was a court-appointed arbitrator that day.  “We are unable to determine on this record why, under these circumstances, counsel’s seemingly valid adjournment request was denied.”   The Court was also troubled by the language that was inserted in the order of dismissal on December 10, 2010, stating that the case could not be restored until the case was ready or had to be tried. Finally, the court observed that authorized surgery occurred in September 2011, within the one year period of the dismissal.

Arguably these circumstances may suffice to warrant equitable relief under Rule 4:50-1(f), especially should respondent be unable to demonstrate prejudice due to the delay beyond the one-year statutory period.

The Appellate Division remanded this case to the Judge of Compensation for a further hearing.  This is a significant case for all practitioners because it loosens what practitioners thought was a hard and fast rule that a case that has been dismissed for lack of prosecution can only be restored after one year.  The last comment that the court made about respondent having to demonstrate prejudice caused by the delay drives a wide wedge into the one-year rule.  It is always difficult for a respondent to prove prejudice when dealing with limited time frames.  Defense practitioners should be cautious in light of the Planes case in advising clients that Section 54 dismissals cannot be reopened after one year.  Cases that employers thought were closed for good may become the subject of future applications for restoration.  Although the Planes case has not been reported, it will now be the leading case in the Division on Section 54 issues.

Decedent, Gerald Hallquist, worked as a laboratory technician for E.I. Dupont de Nemours (hereinafter Dupont) from 1968 until his retirement in 1998.  Between 1977 and 1982, he worked in the quality control lab with liquid chemicals, including benzene.  He wore safety gloves and a uniform supplied by Dupont.  When working with certain chemicals, the decedent was required to wear additional protective clothing.

Prior to his death on June 7, 2010 at the age of 76, decedent filed a claim petition alleging that his exposure to chemicals led to multiple myeloma.  Decedent gave a deposition de bene esse in which he stated that he tested benzene, but he did not state how often that occurred during the five year period he worked in the quality control lab.  He said that he knew what benzene smelled like, but he never quantified the number of times he smelled this chemical while working in the lab.  There were chemical spills when he worked in the lab, but he was not sure of any specific chemical involved. The decedent testified that he smoked a pack of cigarettes daily between the ages of 19-21.

Mary Hallquist, decedent’s widow, filed a dependency claim petition against Dupont.  Petitioner produced Dr. Leon Waller, a primary care physician with no subspecialty as an expert in internal medicine.  Dr. Waller gave an opinion that the decedent’s multiple myeloma was caused by his “long-term exposure” to benzene during the period of time in the quality control lab.  At first, he said that the exposure would have to occur on a daily basis during this time period for it to have caused the decedent’s illness.  He later testified that the exposure needed to have occurred once or twice a week, three times a week, or at least a few times a week.  Dr. Waller conceded that he did not know how many times the decedent worked with benzene or how many times he smelled it.  However, he said the exposure had to have occurred 100 to 150 times a year for him to draw causal relationship between benzene exposure and multiple myeloma.

On cross examination, Dr. Waller did not recall that petitioner smoked cigarettes for a three year period of time.  When presented with this information, Dr. Waller said that if someone is removed from benzene exposure for 25-30 years, the causal link between the chemical and multiple myeloma cannot be made.  However, this testimony by Dr. Waller also undercut his principal opinion on causation because the alleged exposure at Dupont occurred over 25 years before.

Respondent produced a toxicologist, Dr. Shanna Collie Clark, Ph.D, as its expert.  She said that benzene is a carcinogen, but there is no conclusive research showing that benzene exposure causes multiple myeloma.  It is related to leukemia, however.  Dr. Clark testified that benzene as a causal factor for leukemia would be a ten, but only a one or a two for multiple myeloma.  She further said that there was insufficient epidemiological evidence to draw causation, and there was a notable lack of exposure as well.  Dr. Clark said that the decedent wore gloves and protective clothing.  Samples were placed by another individual under a hood and decedent took “one drop, one c.c. in a syringe into a closed system while he’s testing it.” Dr. Clark also testified that benzene exposure cannot be linked to a multiple myeloma condition that occurs 25 years down the road.

The Judge of Compensation ruled for respondent and dismissed the case.  The Judge noted that the decedent used a closed instrument, a syringe, injecting the test material into a closed machine in a room that had ceiling fans throughout the room, sucking vapors out of the room.  Petitioner appealed to the Appellate Division, which affirmed the dismissal of this case.

The Appellate Division observed that petitioner did not offer proof that the decedent was exposed to benzene 100 to 150 times per year, which even her own expert Dr. Waller said was necessary to draw causation.  Blood tests taken after the alleged exposure from 1977 to 1982 showed no evidence of benzene exposure in the decedent.  The Court noted that the decedent never quantified the amount of his exposure and never testified that benzene was spilled near him.  For these reasons, the Appellate Division affirmed the dismissal of this case.

This case can be found at Hallquist v. E.I. Dupont de Nemours, A-6223-12T2 (App. Div. October 10, 2014).  The case was successfully defended by Stephen Fannon, Esq., a shareholder with Capehart Scatchard, along with Ashley Mollenthiel, Esq. on the brief with Mr. Fannon.