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NJ PRIMA’s Spring Seminar

Capehart Scatchard Shareholders, John H. Geaney, Esq. and Penelope Caamaño, Esq. will be speaking at this year’s NJ PRIMA’s Spring Seminar.

John Geaney will be moderating, An Interview With One of New Jersey’s Finest Pain Medicine Doctors: Giovanni Ramundo, MD.

Topics to be discussed during the interview:  

  • How does a pain medicine physician decide whether to prescribe opioids?
  • What are some of the telltale signs of opioid abuse?
  • How difficult is it to wean a patient off opioids?
  • When should a physician do injections to relieve pain?
  • What are the various injections that pain physicians can choose from?
  • Does marijuana work in reducing pain as an alternative to opioids?
  • What is the success rate of nerve ablation procedures?
  • How does a pain physician decide whether a patient has reached maximal medical improvement?

Penelope Caamaño will be giving a legal update on the public sector.

Municipal Employees: No Charge
Adjusters / Case Managers: No Charge
All Other Attendees: $75.00

Includes Hot Buffet Breakfast!

Register for this event by sending an email to info@njprimachapter.com.

 

MSA: To Submit or Not To Submit

Recent updates from CMS introduce significant changes to the reporting and submission requirements for Medicare Set-Asides (MSAs), impacting all Responsible Reporting Entities (RRE). Understanding these changes is crucial to ensuring compliance and avoiding potential penalties. Two important dates to remember are April 4, 2025 and July 17, 2025.

Effective April 4, 2025, all RRE will be required to report any WCMSA amount within the Total Payment Obligation to the claimant, even a zero-dollar allocation. The only exception to this reporting requirement is if the settlement is $750 or less. This new reporting requirement gives CMS access to every single worker’s compensation claim if it involves a Medicare beneficiary. CMS will then instruct the claimant on how to properly exhaust the MSA. Annual reports must be submitted to CMS, showing proper use of the MSA funds. Once the funds are properly exhausted, Medicare will resume coverage for injury-related medical care. Of importance, if the MSA amount is reported as zero, CMS has the right to audit the submission if it is suspected that the parties are attempting to shift work-related medical costs to Medicare.

The goal of establishing an MSA is to set aside sufficient funds to cover the lifetime cost of medical expenses that would otherwise be payable by Medicare for work-injury related conditions. While the RRE will now have to report the amount of an MSA, the need to submit an MSA to CMS for approval remains optional.

Currently, CMS will only review WCMSA proposals that meet the following criteria:

  • The claimant is a Medicare beneficiary, and the total settlement amount is greater than $25,000.00; or
  • The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00.

The recent update confirms “submitting a WCMSA proposed amount for review is never required.” See, Section 4.2.  It further explains that Medicare’s interests are already protected in the following instances:

  1. If the injured worker is only being compensated for past medical expenses; and
  2. There is no evidence that the individual is attempting to maximize the other aspects of the settlement such as lost wages or permanent disability to Medicare’s detriment.

The guidelines explain that the above conditions can be demonstrated through one of the following criteria:

  1. The claimant’s treating doctor documents in the medical records, to a reasonable degree of medical certainty, that the claimant will no longer require any treatment or medications related to the workers compensation injury; or
  2. The claim is denied, and no benefits have been paid and there is no allocation of medical benefits in the settlement; or
  3. The Court determines, by issuing a decision on the merits, that respondent does not owe any additional medical or indemnity benefits and there is no allocation of medical benefits in the settlement; or
  4. The claim as denied following an investigation regarding compensability where benefits extended were paid without prejudice and there is no allocation of medical benefits in the settlement.

The guidelines state that unless an MSA is submitted, reviewed, and approved by CMS prior to settlement, CMS cannot be certain that the Medicare’s interests are adequately protected. As such, “CMS may at its sole discretion deny payment for medical services related to WC injuries or illnesses, requiring attestation of appropriate exhaustion [of benefits] equal to the total settlement,” rather than a CMS-approved WCMSA amount.

However, Section 4.2 specifically states that as of July 17, 2025, CMS will no longer accept submissions for zero-dollar MSAs. While this will allow respondents to finalize settlements much faster, if CMS refuses to review zero-dollar allocations, the question becomes how to ensure that Medicare’s interest is adequately protected to avoid a denial of payment for medical services related to the WC injuries.

CMS highlights the importance of thorough documentation in cases where an MSA is not submitted to Medicare for approval, which includes all zero-dollar allocations. In these instances, it is crucial to obtain an opinion letter from an independent third party MSA vendor, outlining the legal justification and mitigating circumstances that make a zero-dollar allocation appropriate. Additionally, the letter should explain in detail the reliance on the criteria outlined above to support a zero-dollar allocation. A recent revision to Section 9.4.3 reinforces the need to have clear medical documentation to support the exclusion of certain medications or treatment protocols as part of an MSA.

While not submitting an MSA can speed up the settlement process, it will require strong documentation and compliance measures to prevent issues in the future. On the other hand, while submitting an MSA that meets the threshold requirement offers certainty that CMS will honor the allocation, this can lead to delays and stricter oversight. The good news is as of April 7, 2025, the one year waiting period to submit an amended review of an MSA is being eliminated. This benefits respondents in allowing faster resolutions and potential costs savings from overfunding an MSA based on medical expenses that are no longer needed. 

Given the new updates from CMS, employers, third-party administrators, and insurance carriers should review their MSA reporting procedures to ensure compliance before the April 4, 2025, deadline, and develop a policy regarding the handling of all MSAs whether it’s a zero-dollar allocation or not. Readers may contact me at phigbee@capehart.com for further information.

The post MSA: To Submit or Not To Submit appeared first on NJ Workers' Comp Blog.

Notable Win: Court Rules in Favor of Respondent on Petitioner’s Motion for Medical Treatment and Temporary Disability Benefits

Client: Liberty Mutual Insurance 

Court: Workers’ Compensation

Trial/Brief Attorney: Jason Sikoryak, Esq.

**Results may vary depending on your particular facts and legal circumstances**

Matter Caption: Tracie Eustache v. New Jersey Transit

On May 25, 2023, Petitioner sustained a compensable injury to her left hand and thumb as a result of a window crushing her hand. Respondent initially accepted this claim and petitioner was treated with stitches to the left thumb and a splint for the left hand to prevent mobilization. Petitioner was instructed by medical providers to remove the splint to wash her hands and when performing range of motion exercises at home. Respondent scheduled Petitioner for evaluations with Dr. Lipschultz and Dr. Chan to treat the left hand, but Petitioner failed to comply with either treating physician. Further evaluations were not scheduled by Respondent.

Petitioner did not seek medical treatment until over four months later when she was examined by Dr. Wagner. Dr. Wagner reported that Petitioner’s original injuries healed, but she had since developed atrophy in the muscles of her hand, warranting additional treatment. Through testimony, it was revealed that Petitioner did not comply with the instructions from medical providers and was instead continuously wearing the hand splint for several months. Ultimately, the Court did not find the Petitioner to be credible and found that her current injury was due to her own intentional intervening actions and therefore, not compensable. Petitioner’s Motion for Medical Treatment and Temporary Disability Benefits was therefore denied.

NJ Supreme Court Holds Insurer Has No Duty to Defend Against Intentional Harm Claims

In New Jersey, the Workers’ Compensation Act is the exclusive remedy for injured workers as stated in N.J.S.A. 34:15-8. An employee cannot bring a civil suit against an employer or a co-employee alleging bodily injury.  However, an exception arises in cases of intentional harm. In Laidlow v. Hariton Machinery Co., Inc., 170 N.J. 602 (2002), the Supreme Court clarified the test to decide when an employer’s conduct rises to the level of an “intentional wrong” under N.J.S.A. 34:15-8. This is known as the “substantial certainty” test.

A very recent Supreme Court decision squarely addressed the question whether an insurer is required to defend an employer against intentional harm claims. The Supreme Court of New Jersey in Rodriguez v. Shelbourne Spring, LLC, No. A-39-23, 2024 N.J. LEXIS 1173 (Dec. 12, 2024), found as follows:  (1) the insurer had no duty to provide coverage against the employee’s negligence based claims (including claims for gross negligence against the employer) because of the exclusive remedy bar under N.J.S.A. 34:15-8, and (2) the insurer had no duty to defend against Laidlow claims under the Employers’ Liability portion of the workers’ compensation policy.

The practical impact of this decision is that generally employers have no coverage for intentional harm lawsuits.  This is significant because there is a growing trend for intentional harm lawsuits to be filed in New Jersey.  There is no coverage under any portion of the New Jersey standard workers’ compensation policy.  There is also no coverage under EPLI policies or standard liability policies for intentional harm claims.  A few employers, like joint insurance funds, may still provide coverage for members by not adopting the C5 exclusion described below.

  1. PROCEDURAL HISTORY

The employer in this case, SIR, was an electrical contractor that employed the injured worker, Dionicio Rodriguez. Hartford, the insurer, issued a Workers’ Compensation and Employers’ Liability Policy to the employer. This is the standard policy that all employers have in New Jersey.  The plaintiff initially filed a claim petition for workers’ compensation benefits under Part One of the Hartford Policy which the insurer defended on the employer’s behalf. The plaintiff then filed a personal injury complaint in civil court against SIR, seeking money damages and naming his employer as a defendant.  The facts were that Mr. Rodriguez had been injured opening an electrical panel on a breaker.  He contended in his civil suit that his employer was substantially certain that this action would cause him severe injury because Mr. Rodriguez had not been trained to do what he contended was highly dangerous work.

The employer then forwarded the complaint to Hartford which disclaimed any duty to defend the employer in civil court. The employer filed a third-party complaint against its own carrier claiming that Hartford wrongfully disclaimed defense coverage. Hartford filed a Rule 4:6-2(e) motion to dismiss the employer’s third-party complaint, and the employer cross-moved for summary judgment. The trial judge granted Hartford’s motion and denied the employer’s cross-motion, concluding that the insurance policy expressly excluded coverage for intent-based claims.

The employer moved for reconsideration and filed a motion to amend its third-party complaint, contending for the first time that the policy’s enhanced intentional injury exclusion (EII exclusion) violated public policy. The judge denied reconsideration finding that Rodriguez’s allegations were Laidlow claims and that the policy excluded insurance coverage for intentional conduct by the employer. As to the motion to amend, the trial judge rejected the motion as moot finding that the amendment would be futile.

The Appellate Division affirmed the orders dismissing the employer’s third-party complaint, denying the employer’s cross-motion for summary judgment, and denying the employer’s motion to amend its third-party complaint.

The Supreme Court accepted certification and affirmed the decision. The Court relied on longstanding legal principles regarding the duty to defend arising from the contractual obligations under the language of an insurance policy. Rodriguez, at *12 citing Hartford Accident & Indem. Co. v. Aetna Life & Cas. Ins. Co., 98 N.J. 18, 22 (1984).  Here is what the Court concluded:

A. Under The Elective Provisions of the Workers’ Compensation Portion of the Policy, (Part One of the Standard Policy) the Insurer had No Duty to Defend Against Claims of Negligence, Gross Negligence, Recklessness, Intentional Harm or Substantial Certainty of Harm. 

Part One of the Hartford policy provided Workers’ Compensation insurance for “benefits” under Workers’ Compensation law. These are the everyday claims that are handled in the Division of Workers’ Compensation.    The policy says:  “[w]e will pay promptly when due the benefits required of you by the workers’ compensation law.” Id. at *20. Emphasis added. The Court explained that “benefits . . . required by a workers’ compensation law,” included medical benefits under N.J.S.A. 34:15-15; death benefits for dependents under N.J.S.A. 34:15-13; and temporary disability benefits, permanent total benefits, or permanent partial benefits under N.J.S.A. 34:15-12(a) to (c), regardless of fault. Part One of the Hartford policy incorporated by reference the requirements set forth in the Workers’ Compensation Act stating that “the Act covers employees’ accidental bodily injuries ‘arising out of and in the course of [their] employment, of which the actual or lawfully imputed negligence of the employer is the natural and proximate cause.’” N.J.S.A. 34:15-1.

B. The insurer has no duty to defend against intentional harm claims under standard Employers’ Liability insurance policies (Part Two) on account of the plain language of the exclusions set forth in the standard workers’ compensation policy

In Rodriguez, Part Two of the standard Hartford Policy set forth the exclusions of coverage for Employers’ Liability insurance, specifically section C5 which provided in relevant part: This insurance does not cover. . . . . [b]odily injury intentionally caused or aggravated by [the employer].”  Id. at *23. The Hartford Policy contained an additional “New Jersey Part Two Employers Liability Endorsement,” applying “only to the insurance provided by Part Two (Employers Liability Insurance).” This is the so-called EII exclusion, which states that: “[w]ith respect to Exclusion C5, this insurance does not cover any and all intentional wrongs within the exception allowed by N.J.S.A. 34:15-8 including but not limited to, bodily injury caused or aggravated by an intentional wrong committed by you or your employees, or bodily injury resulting from an act or omission by you or your employees, which is substantially certain to result in injury.” Id. at *23-24. Emphasis added.

The Court held that Part Two of the insurance policy imposed no duty on Hartford to defend the employer against Mr. Rodriguez’s intentional harm suit based on the unambiguous policy language.

C. Exclusions in Employers’ Liability Insurance are not against public policy when the language is unambiguous as in Rodriguez.

The Court also concluded that the trial judge properly denied the employer’s motion for leave to amend its third-party complaint as futile. The employer moved for reconsideration and filed a motion to amend its third-party complaint, contending for the first time that the Hartford Policy’s EII exclusion violated public policy. The Court concluded that contrary to the employer’s contention, the EII exclusion did not violate public policy.

The Court went on to distinguish Rodriguez from companion cases Beseler and Delta Plastics. See Charles Beseler Co. v. O’Gorman & Young, Inc., 188 N.J. 542, 548 (2006); N.J. Mfrs. Ins. Co. v. Delta Plastics Corp., 188 N.J. 582, 582 (2006).  In these earlier cases, the Court considered C5 exclusions in Employers’ Liability policies that excluded coverage for bodily injury intentionally caused or aggravated by the employer. In those cases, the Court ruled that the C5 exclusions did “not unambiguously exclude injuries falling under the ‘substantially certain’ prong of the intentional-wrong exception recognized by Laidlow.” Beseler, 188 N.J. at 547.  Due to the “lack of express language excluding conduct substantially certain to result in injury,” however, the Court held that the C5 exclusions were ambiguous and thus ruled for the insured employers. Id. at 548.

Following decisions in Beseler and Delta Plastics, the Compensation Rating and Inspection Bureau (CRIB), amended the New Jersey Workers’ Compensation and Employers’ Liability Insurance Manual (Manual), N.J.S.A. 34:15-90.2(i), to include an updated New Jersey Part Two Employers Liability Endorsement. To restore the C5 intentional wrong exclusion while conforming with the Court’s directive that such an exclusion must be unambiguous, the new endorsement was amended. It provides that:[w]ith respect to Exclusion C5, this insurance does not cover any and all [*31]  intentional wrongs within the exception allowed by N.J.S.A. 34:15-8 including but not limited to, bodily injury caused or aggravated by an intentional wrong committed by you or your employees, or bodily injury resulting from an act or omission by you or your employees, which is substantially certain to result in injury. [CRIB Manual Amendment Bulletin #436, Exhibit 1, effective July 1, 2007.]

The New Jersey Department of Banking and Insurance (DOBI) approved the Manual Amendment Bulletin #436, which included the amended endorsement to the C5 exclusion, in a letter dated May 23, 2007. The Court in Rodriguez therefore concluded that the EII exclusion in the Hartford Policy contained language identical to the language approved by DOBI in 2007 and complied with the holding in Beseler by including “express language excluding conduct substantially certain to result in injury.” Rodriguez, at *31. The Court therefore concluded that the New Jersey-specific endorsement that bars coverage for intentional wrong claims did not violate public policy.

Hartford Insurance rightly won this case.  Where does this leave employers who are faced with intentional harm lawsuits?  In a perilous position!  When an intentional harm suit is filed against the employer,  alleging substantial certainty of harm or intentional harm, generally the employer has no ability to obtain insurance coverage.  Some employers, like joint insurance funds, may not have adopted the standard C5 exclusion, but almost all other employers will not have coverage, and this case makes clear there is no duty on the part of the carrier to defend the suit.

The fact is that most intentional harm suits get dismissed in New Jersey at some point in time, but usually not until a great deal of discovery has been completed.  Legal fees can be extremely high to defend such lawsuits, so even if the employer eventually wins, and then wins again on the appeal, it may feel like a pyrrhic victory to the employer because the legal defense costs must be funded entirely by the employer.  Such defense costs can amount to tens of thousands of dollars. Capehart Scatchard defends intentional harm lawsuits.  If readers have questions, Betsy Ramos, Esq., Chair of the Litigation Department, may be consulted.

The post NJ Supreme Court Holds Insurer Has No Duty to Defend Against Intentional Harm Claims appeared first on NJ Workers' Comp Blog.

Notable Win: Denial of Petitioner’s Motion for Medical and Temporary Benefits

Client: Lowe’s 

Court: Workers’ Compensation

Trial/Brief Attorney: Michelle L. Duffield, Esq.

**Results may vary depending on your particular facts and legal circumstances**

Matter Caption: Magalies Velez v. Lowe’s 

Petitioner filed a Motion for Medical and Temporary Benefits seeking treatment for her back and alleged hernia.  Respondent denied any need for treatment based on expert reports from Dr. William Mitchell in connection with petitioner’s back allegations and Dr. Adam Sobel in connection with petitioner’s hernia allegations.  Petitioner relied on her expert, Dr. David Weiss, as he found Petitioner was in need of treatment for both her back and hernia. After a full Trial with testimony from all three experts, the Judge found Respondent’s experts to be more credible and questioned the veracity of the petitioner as she had failed to disclose a prior thoracic spine condition along with degenerative joint disease and a prior diagnosis of fibromyalgia.

Court Finds Petitioner Cannot Prove Work-Related Need for Breast Reconstruction Surgery

A misunderstanding of a key fact can doom an expert opinion.  That was the situation in V.S. v. Spectrum360, No. A-0710-23 (App. Div. June 24, 2024). The petitioner, a special education teacher, was working on July 26, 2021, when a student kicked her in her left breast.  Petitioner felt pain, tenderness, extreme redness and blood clotting in her left breast.

A medical examination on the date of the incident was consistent with a contusion to the left breast.  V.S. had undergone breast augmentation surgery in 2011.  Since then, petitioner admitted that she had gained a “significant amount of weight,” which augmented her breast size.  Petitioner’s board certified plastic surgeon, Dr. Boris Volshteyn, suspected that V.S. “sustained a fracture of the silicone implant on the left side.”  He sent her for an MRI on September 30, 2021.  Dr. Volshteyn said that the MRI “demonstrated significantly increased folding of the implant on the affected left side compared to the right side.”  He attributed the changes in her left breast to the work incident and recommended breast reconstruction surgery and removal and replacement of both breast implants to repair what he thought was a slow leak rupture of the left breast implant.

Petitioner filed a motion for medical treatment seeking breast reconstruction surgery. Respondent sent petitioner for a second opinion with Dr. Beverly Friedlander, a board certified plastic surgeon.  In a key distinction between the two plastic surgeons, Dr. Friedlander noted that petitioner did not have silicone implants, contrary to what Dr. Volshteyn had assumed.  Rather she had saline implants. She pointed out that if Dr. Volshteyn had been correct that petitioner had suffered a rupture or puncture of the left breast when kicked by the student, a deflation in the breast would have occurred rapidly with a saline implant.  When a saline implant is compromised, she said its contents will leak and reabsorb into the body quickly.  But that had not happened in this case.  Even petitioner agreed that there was no material difference in size after the accident between the left and right breasts. 

The experts also disagreed on the interpretation of the MRI results.  The MRI of the left breast showed evidence of folds in the left breast.   Dr. Volshteyn attributed this to the work incident, arguing that the MRI demonstrated “significantly increased folding of the implant on the affected left side compared to the right side.”  Dr. Friedlander read the same MRI but she did not notice in her examination any rippling in the left breast.  She added that ripples in breast implants are actually quite common.  She said that all breast implants ripple, and that if an implant is underfilled, the ripples are even more observable.  In her opinion, one implant was inflated more than the other implant, leading to surface irregularities. She concluded that the folds that showed on the MRI had nothing to do with the work injury.

The Judge of Compensation denied the petitioner’s motion, finding that Dr. Friedlander was more credible than petitioner’s expert.  The Appellate Division affirmed the dismissal.  It said, “The judge found Dr. Volshteyn erroneously believed V.S. had silicone – not saline – implants and that mistake regarding the composition of the implants undermined his overall opinion.” The Court felt that there was sufficient credible evidence for the Judge of Compensation to find Dr. Friedlander more credible in that petitioner’s left breast implant was intact and had not ruptured contrary to the opinion of Dr. Volshteyn.

As for petitioner’s complaint of more pain in her left breast after the accident, the Court noted that Dr. Friedlander had an explanation for this.  Petitioner had chronic pain related to a 2007 motor vehicle accident as well as lupus/rheumatoid arthritis.  Dr. Friedlander also said that petitioner had a history of discomfort in both breasts related to her significant weight gain since the time of her 2011 augmentation.

The post Court Finds Petitioner Cannot Prove Work-Related Need for Breast Reconstruction Surgery appeared first on NJ Workers' Comp Blog.

Plaintiff’s Civil Suit Was Barred Against Her Co-Employers and Failed to Meet Sufficient Allegations of Intentional Harm

An employee can work for two companies at the same time.  When that occurs, the employee cannot sue either company civilly because N.J.S.A. 34:15-8 provides that workers’ compensation is the exclusive remedy for an injured employee.  The intentional harm exception is narrowly construed in New Jersey. That is the lesson in the case of Donnerstag v. Winchester Garden, No. A-1916-22 (App. Div. May 9, 2024).

The facts were quite simple in this case.  Petitioner worked in 2013 as a live-in caregiver for Brenda White, who was a resident of Winchester Garden.  Petitioner began to experience health issues during her years of employment, and she associated them with mold that she saw on the premises.  She quit her job in 2021 because she was convinced that mold exposure was causing respiratory issues.  She also knew that no remediation had been done on the mold problem.

Donnerstag brought a civil lawsuit against Winchester Garden in July 2020.  In August 2023 she moved to amend the complaint to add Synergy Homecare as a co-defendant.  She claimed that she only learned through discovery years later that Synergy was her actual employer and that Winchester was only the managing company of Synergy.

There were many procedural problems with the case, but the most interesting aspect of the decision was the criticism by the court of the deficiencies in the civil complaint.  “As the judge recognized, Donnerstag’s proposed amended complaint was futile because it alleged negligence claims against Winchester and Synergy – her identified employers.”  The Court pointed out that the complaint was very clear in alleging that Winchester was the managing company for Synergy and Donnerstag was an employee of Synergy.  She alleged that the two companies were vicariously liable for her respiratory injuries but she only pleaded basic negligence in her civil complaint.

The Court pointed out that it is extremely difficult to get past the exclusive remedy provision in New Jersey.  The only exception is an intentional harm case, but the Court emphasized that the New Jersey Supreme Court has interpreted intentional harm to reflect a “substantial certainty standard.”  It cited Laidlow v. Hariton Mach. Co., 170 N.J. 602, 613 (2002) for this proposition:  “. . . [a]n intentional wrong is not limited to actions taken with a subjective desire to harm, but also includes instances where an employer knows that the consequences of those acts are substantially certain to result in such harm.”

The Court viewed the amended complaint liberally but still found that there was insufficient support for a count alleging intentional harm.  The complaint sounded more in negligence than in intentional harm.  The Court therefore affirmed the decision of the trial court to bar the amended complaint and dismiss the suit. 

The post Plaintiff’s Civil Suit Was Barred Against Her Co-Employers and Failed to Meet Sufficient Allegations of Intentional Harm appeared first on NJ Workers' Comp Blog.

Notable Win: Trial Win Upheld on Appeal: Shooting is Not Compensable after Petitioner Fails to Show Any Relation to his Employment

Client: Midwestern Insurance Alliance 

Court: Appellate

Trial Attorney: Brian P. Berkoff, Esq.

Brief Attorney: Ashley T. Mollenthiel Fiore, Esq. and Brian P. Berkoff, Esq.

**Results may vary depending on your particular facts and legal circumstances**

Matter Caption: Avery v. Next Mile, LLC/DSP

WIN from April 11, 2023

Petitioner appealed the decision from the April 11, 2023 trial and argued that the Judge of Compensation should have placed the burden of proof on respondent to disprove that the shooting arose from employment.

The petitioner’s attorney cited cases in which the disputed issues were about the medical or physical cause of the injury, which was not in dispute for this case. This case was an issue of pure legal causation and whether the accident arose out of employment.

The Appellate Division affirmed the case based on the facts and found that the judge did not err in deciding the case based on the testimony at trial. They noted there is no precedent for burden-shifting in this case as it involved legal causation and not medical causation.

To learn how this matter progressed from Trial to Appellate Division ruling, click here.

Court Dismisses Claim of Petitioner Who Was Shot During Course of Employment

There are very few cases in the New Jersey Division of Workers’ Compensation involving injuries to employees who are shot at work. Avery v. Next Mile, LLC/DSP, No. A-2506-22 (App. Div. May 23, 2024) presents several interesting issues.

Petitioner, Mr. Avery, worked for Next Mile, which acted as a subcontractor for Amazon.  On August 27, 2020, Avery reported to work in a parking lot over which Amazon exercised some control.  Avery got there an hour early, waiting for delivery assignments from a dispatcher.  He said he was wearing “Amazon clothing.”  While he waited, he sat on the rear bumper of a delivery truck.

Petitioner testified that about 15-30 minutes after his arrival, he saw a person wearing a mask and an Amazon vest approach him.  This individual stood two arms’ lengths away from him and proceeded to point his gun at Avery, shoot him, and then flee the scene. The shooter took nothing from Avery and did not attempt to harm anyone else in the parking lot.

Petitioner was admitted to the hospital.  Following his discharge, he fled to the State of Massachusetts out of fear for his life.  He then returned to New Jersey for two days.  In December 2020, petitioner went grocery shopping and saw two individuals in the grocery store wearing ski masks. He was convinced these individuals were trying to kill him, so he fled this time to the State of Florida.

At trial petitioner admitted on cross examination that he had had an argument on the phone one or two weeks before the shooting with a former Amazon employee, Mr. Blocker, regarding some money that petitioner owed Mr. Blocker for purchasing credit cards.  Petitioner further admitted that he and Blocker had no issues arising from work when they worked together.

Supervising Judge of Compensation, the Honorable Robert D. Thuring, heard petitioner’s testimony and found petitioner to be lacking in credibility.  He noted inconsistencies in petitioner’s testimony regarding his version of events.  The Judge found that the shooting did take place during the course of petitioner’s employment but that it did not arise from his employment.  He therefore dismissed the case. The Judge of Compensation explained his reasoning as follows:

Petitioner testified that he had no issues with [Blocker] while they were both working for respondent and the purchase of the credit card from [Blocker] had nothing to do with the petitioner’s employment with respondent.  Furthermore, the shooting appears to have been a targeted act and was just as likely to have occurred outside the workplace.  I find that it is more likely than not that the shooting was related to the credit card purchase from [Blocker].  Even if the shooting was unrelated to [Blocker], the record is still void of any evidence connecting the incident to the petitioner’s employment with the respondent.

Petitioner appealed and argued that the Judge of Compensation should have placed the burden of proof on respondent to disprove that the shooting arose from employment.  Counsel for petitioner argued that neither the police nor respondent had been able to identify the shooter.  Petitioner urged the Court to follow the line of cases in idiopathic claims that shift the burden of proof to respondent.  In idiopathic defenses in New Jersey, the employer must prove that the injury was more likely caused by a personal condition.  The Appellate Division rejected this argument and said that this case had nothing to do with a preexisting physical condition.  The physical injury was clearly caused by the shooting. Instead, the Court relied on a line of cases that pertains directly to work assaults.  “When an assault on an employee is purely the product of a personal relationship against him by the ‘assailant’ . . . and the assailant is not a ‘fellow-employee, and there is no more connection between the assault and the employment than that it occurs while the employee is at work, recovery is not allowed.’ “ Pittel v. Rubin Bros. Bergen, Inc., 59 N.J. Super. 531, 536 (App. Div.1960).

The Court held that the burden of proof in this case rested on petitioner to show more likely than not that the shooting arose from work.  The decision is instructive for several reasons.  No one knew the identity of the assailant, but the Judge of Compensation and the Appellate Division concurred that petitioner failed to prove a work connection to the shooting.  The Appellate Division said, “In addition to issues of credibility with petitioner’s testimony, the judge’s findings were supported by facts in the record:  petitioner was singled out and shot in a parking lot where several other individuals were also present, the incident was not theft-related and no one else was approached or injured.”

The case underscores the point that the burden of proof really does make a difference in many cases and that not every injury that happens at work arises from work.

This case was successfully tried in the Division of Workers’ Compensation by Capehart shareholder, Ashley Fiore, Esq., and was successfully argued in the Appellate Division by Capehart shareholder, Brian Berkoff, Esq.

Paying It Twice

Imagine a conversation in a restaurant between a customer who orders a three-course meal and the waiter, who brings the customer a bill after the first course.  “But I have not even finished dinner yet?” objects the customer.  The waiter responds, “you misunderstand, this bill is just for the procedure.  We had several cooks working on this meal.” At the end of the meal, the waiter then brings a second bill to the table, announcing “now this is the bill for your food.”

But isn’t that paying it twice! One might say that this hypothetical sounds absurd. Yet isn’t this what happens all the time in negotiations regarding awards for permanent partial disability benefits?   The employer is presented with a large medical bill from the surgeon for a low back fusion surgery early in the case, perhaps over $100,000. The carrier, third party administrator or employer then pays the medical bill.  Two years later, when permanency settlement negotiations ensue, the petitioner’s counsel tells the judge, “My demand is 40% permanent partial disability because this was a two-level fusion.”  That will mean a payment of about $145,000.  The response should be, “so what  – my client already paid that bill.”

Valuing a case for permanency based on the medical diagnosis or based on surgery having been performed is simply paying it twice.  The argument — “this was a two level fusion” is legally irrelevant.  The Supreme Court of New Jersey said in Perez v. Pantasote, 95 N.J. 105 (1984) that to obtain a permanent partial disability award, the employee must show proof of a lessening to a material degree of working ability.  Alternatively, the Court said, “Another criterion that may be considered in determining whether the injury is significant enough to merit compensation is whether the injury substantially interferes with other, nonwork-related aspects of the petitioner’s life.” In other words, an award must be based on factual evidence offered by the petitioner that this accident produced significant changes in work or in non-work activities.  Usually, people are back to work doing the same job at the time of settlement, so the focus shifts to the impact on non-work aspects of life.

Our Supreme Court has spoken clearly, yet how many times have we heard this same argument: “This case is worth more because there was a surgery two years ago to the shoulder,” or “this surgery was open and not arthroscopic.”   These arguments are red herrings: they do not address the legal test above. When it comes to awarding permanency, the focus should never be on the type of surgery that took place two years ago but rather on the present functional loss, if any,  of the injured worker.   Every case is different.  Some spine surgeries produce tremendous recovery for patients; some do not.  I know many people who have undergone fusion surgery and it has eliminated their pain and restored their function to pre-injury status.  Such a person would not be entitled to a substantial award of permanency. Others find that surgery failed, and at the time of settlement they have major life changes.  

So why is there so little attention paid to the words of our Supreme Court?  One reason is that practitioners were wrongly taught to value cases based on the type of surgery, operated or unoperated, open or arthroscopic. Prior to the Perez decision, that’s how workers’ compensation worked.  There were literally charts that practitioners used valuing cases based on diagnosis and surgery with operated surgeries being valued higher than unoperated surgeries – as if having a surgery meant one would have more changes in one’s life!  These myths continue until today.   Another reason for the tendency to compensate people for diagnoses as opposed to functional changes is that many of the doctors who do permanency examinations do not understand what the law requires.  Most of the IME reports we all read are just regurgitations of medical records that lawyers and adjusters already have read and have sent to the IME doctors.  This happens on both sides of the fence.  Many doctors do not ask anything about pre-accident level of function and post-accident level of function.  Some use meaningless canned phrases in every single report like “cold and damp weather aggravate discomfort.”

What should practitioners and judges be focusing on?  In a word, the facts.   Was the employee a weightlifter but now cannot lift weights? Did the employee have to quit his or her job because it was too physical in favor of a lower paying job?  Can the employee no longer enjoy his or her avocation of swimming because of a shoulder injury? Is the employee doing his or her job without any limitations and taking more overtime than before?  Was the employee doing well enough to add a second job?  Does the injured worker with a knee and shoulder injury now regularly go hiking and bowl in a league? These are the kinds of legal and factual considerations that drive the value of cases up or down for permanency purposes  — not whether there was or was not a surgery and not what the diagnosis was.

I would suggest to every practitioner that one should read the permanency exams closely.  Employers are required to pay only for proof of functional loss, which is proven not by operative records from 18 months ago but by current facts and sometimes current testimony.  What the medical records add is context:  if someone says he can no longer run but the injury is carpal tunnel syndrome, that assertion would make no sense.  But if the injury were a foot fracture, that would make sense.  Having a medical impairment may mean nothing at all, even if an MRI backs it up.  I have a lateral meniscal tear in my knee.  If it were from a work injury, I could present the MRI evidence of the tear, but I would not get a permanent partial disability award in New Jersey because I run at least four days a week.  The tear has not caused any change whatsoever in my life other than occasional pain. 

Arguing that a case is worth 30% because the petitioner had a rotator cuff tear and that’s what rotator cuff tears are worth is a gross misunderstanding of New Jersey law.  The equivalent would be a student demanding admission to Cornell University right after he took the SAT test because he took an expensive SAT prep course and everyone in his class who took that course has always been accepted.  The Cornell University Admissions Department will surely decline admission until it sees the results of the SAT test.   IME physicians must ask the relevant questions about the impact of the injury on one’s life.  Nothing is more important than that in the examination.  The obligation of the employee is to provide information about significant life changes caused by the accident.  In some cases, the employer may contest the allegations.  If an employee says he or she cannot run anymore because of the accident, the employer can offer evidence that the same employee recently ran several 5k races.      

Under the Perez case, objective evidence of an impairment is still required, like a positive MRI, but that is not enough to get a permanency award.  For an award of permanent partial disability, the focus must always be on proof of loss of function at work or at home at the time of the settlement.  Regardless of the type of surgery that took place and regardless of what the MRI showed,  if the employee is functioning well at the time of settlement and there are minimal life changes, then the award must be correspondingly low.  

There has never been any legal support for the argument that every fusion surgery is worth over 30% or every rotator cuff tear is worth 30%. These are myths that have cost New Jersey employers tens of millions of dollars over the years.  We do not compensate medical records:  we compensate real live people.  Every person is different: some people have great results with minimal life changes after surgery, physical therapy and pain medicine treatment and should receive much lower awards than those who have major life changes from an accident that continue to affect them negatively at the time of settlement.

The post Paying It Twice appeared first on NJ Workers' Comp Blog.

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