Category Archives: Workers Compensation

Settling Cases Involving the World Trade Center Health Program

Settling Workers’ Compensation Cases Involving the World Trade Center Health Program

Where a claimant has a New York or New Jersey or Longshore workers’ compensation claim and is entitled to benefits under the James Zadroga 9/11 Health and Compensation Act of 2010 (“Zadroga Act”) you can obtain a Section 32 (NY WCL § 32), Section 20 (N.J.S.A. 34:15-20) or 8(i) LHWCA (33 U.S.C. 908[i]) lump-sum dismissals of state or Federal workers’ compensation benefits if the secondary payer rights of the WTC Health program are considered.

The Zadroga Act and the World Trade Center Health Program.

The James Zadroga 9/11 Health and Compensation Act of 2010 (“Zadroga Act”) establishes the World Trade Center Health Program (“WTC Health Program”) administered by the Department of Health and Human Services. The Act also extends the September 11th Victim Compensation Fund (VCF), initially operated from 2001 to 2004. The WTC Health Program provides medical monitoring and treatment for emergency responders, recovery, and cleanup workers, and volunteers who helped after the terrorist attacks on September 11, 2001 and for people who were present in the dust or dust cloud on 9/11 or who worked, resided, or attended school, childcare, or adult daycare in the New York City disaster area for a period of time on 9/11 or during the following months.
Continue reading Settling Cases Involving the World Trade Center Health Program

Leading Edge Ideas for Settlements with Medicare/Social Security Entanglement

Common problems with settling cases where the claimant is Medicare- or Social Security Disability- entitled.

The hardest-to-settle cases are often those where the claimant is currently entitled to Social Security disability and/or Medicare benefits. There are two common obstacles posed by Medicare or Social Security disability entitlement are (1) sky-high future medical allocations necessary to satisfy the Secondary Payment obligation of the carrier/employer make the overall settlement unpalatable; and (2) settlements where the claimant/petitioner is afraid to take a lump-sum settlement because their monthly Social Security disability check may decrease.

Problem 1: Medicare’s Future Interest is driving up the settlement.

We must consider Medicare’s present- or future-interest in any settlement where the right to future medical benefits from the carrier/employer is being waived. This comes into play in the following ways in the jurisdictions I practice in when the claimant/petitioner is Medicare entitled:

  • New York: Section 32 settlements (WCL §32).
  • New Jersey: Section 20 settlements (N.J.S.A. 34:15-20).
  • Longshore: Section 8(i) Settlements (33. U.S.C. 908[i]).

Continue reading Leading Edge Ideas for Settlements with Medicare/Social Security Entanglement

Guide to M&T Reimbursement in New York

What is M & T Reimbursement?

New York’s Workers’ Compensation Law requires the employer/carrier to reimburse the claimant for out-of-pocket expenses for certain medication, durable medical goods, and mileage (currently $0.56 per mile). These “M & T” expenses are typically mileage expense requests. Be careful in issuing payments! Claimant routinely submit reimbursement requests for items which are improper or not covered under the Law. Continue reading Guide to M&T Reimbursement in New York

Appeals in New York

Introduction to Appeals – generally.

Any final determination of a Workers’ Compensation Law Judge is subject to appeal. The first level of appeal is to the Workers’ Compensation Board Panel. These panels are usually composed of three Workers’ Compensation Board members, at least one of which must be an attorney. The second level of appeal is to the Supreme Court Appellate Division, except when there is a dissent in the Board Panel Decision, the party can request a Full Board review. WCL §23. In a Full Board review, all 13 Commissioners of the Board render a joint opinion. Finally, and if there is a dissent in the Appellate Division, the matter can be appealed to the State Court of Appeals (New York’s highest court).

At the first level of appeal, disputed benefits (medical and indemnity) are stayed pending decision. At all other levels, there is no automatic stay.

 

Name

Stay?
Cost?
Concurrent?
Reverse %
1st (lowest)
Board
YES
Hours. No filing fees.
NO
~25%
2nd
Full Board
NO
Hours. No filing fees.
YES
~10%
2nd
App. Div.
NO
$5,000 + hours
YES
~8%
Last
Court of Appeals
NO
$5,000 + hours
NO

 

 

First level of appeal – to the Board panel

A. What can be appealed to the Board Panel?

Any final determination of Law Judge can be appealed. WCL §23. Nearly all Notices of Decision which are not interlocutory in nature and which dispose of substantive issues or reach legal threshold issues which may be determinative of the claim can be appealed.

Purely interlocutory decisions – those which do not dispose of a significant issue in dispute – can not be appealed. In practice, this has meant that decisions of Law Judges, limiting proofs and determining issues to be decided at Pre-hearing Conferences (mandatory in denied cases) are not subject to review. However, those decisions, which often have a great impact on the ultimate decision in a denied matter, can be appealed after the final order (Notice of Decision) is issued.

The Board Panel can rescind the decision of the Law Judge, modify the decision, reverse the decision, or correct it. “Correction” as that term is used by the Board Panel is intended to correct administrative error – for example, an incorrect calculation of rate. In cases where a minor error has been made (for example, transposition of numbers, or mis-identifying a witness name) the parties should informally approach the Law Judge first to ask for an amended Decision can be obtained within the 30 days for filing the appeal.

B. Requirements of appeal to the Board Panel.

The Board has promulgated a “Cover sheet” which should be completed and affixed to any filed appeal. 12 NYCRR 300.13(a). This cover sheet is labeled “Cover Sheet – Application for Board Review RB-89” is required by the relevant Court Rule and is available to download from the Board’s website here. The relevant court rule also requires a Certification or Affirmation of service; the RB-89 form contains the required proof of service.

The Board will refuse to review any issue not raised before the Law Judge. 12 NYCRR 300.13(e). This means that defense counsel must raise all available objections at the hearing and have exceptions noted on the record.

New Evidence that was not considered by the Law Judge may be presented to the Board Panel. 12 NYCRR 300.13(g). In order for the Board to review the “new” evidence, the party seeking to introduce it must make a showing as to why the evidence was not produced at the time of trial or before a Law Judge.

C. Timelines for Board Panel review.

An appeal of a Law Judge’s decision must be made within 30 days of the decision. WCL §23. In calculating the days, it is important to note that this is not a month, but only 30 calendar days. If the 30th day falls on a Sunday or holiday, then the appeal can be filed on the next day.

The party defending the appeal (respondent) has 30 days to file a rebuttal. 12 NYCRR 300.13(b). The rebuttal must have the cover sheet prescribed by the Board. Id. This cover sheet is labeled “Cover Sheet – Rebuttal of Application for Board Review RB-89.1” and is available for download form the Board’s website here.

There is no oral argument allowed for a Board Panel appeal. WCL §23. The Board Panel considers only the record below and the papers submitted by the parties.

D. Tactical considerations of Board Panel review.

i. The likelihood of success on appeal.

The most important consideration of Board Panel review is the likelihood of prevailing on the legal or factual argument presented. Approximately 25-30% of all Law Judge Decisions are modified, reversed, or rescinded on Board Panel appeal. Because the Board Panel includes an attorney, issues of improper or unsupported evidence, misapplication of law, and judicial error are likely to be corrected at the Board Panel level.

Credibility determination made by a Law Judge are unlikely to be disturbed on appeal to the Board Panel, unless there are egregious oversights or errors. The Law Judges are given wide latitude in assessing witness credibility, especially where the witnesses have testified before the Law Judge (and not just be depositions, which is the case of most medical testimony).

ii. Effect of the stay on litigation.

A second consideration is the effect that the stay on disputed benefits may have on the pending litigation. Indemnity benefits which are the subject of the appeal are “stayed” or stopped until a Board Panel issues a decision. At the time of this writing, Board Panel decisions are taking about 10 months to be issued following the appeal. This means that given the initial 30 day period to file, and the 30 days for the claimant’s attorney to respond to an appeal, that indemnity benefits may be suspended for a year before a response is received from the Board Panel.

This creates an opportunity for the parties to resolve the issues informally, whether by Section 32 (WCL §32) for a lump sum dismissal or stipulation. The effect of the stay on the litigation should be considered as a tactic by the carrier/employer as a suspension of benefits or reduction of benefits for approximately a year is a powerful tool to pressure towards a settlement.

iii. Penalties for frivolous appeal.

Recognizing that the implication of the stay on awards encourages the potential for abuse by the employer/carrier, the Workers’ Compensation Law contains a penalty provision. If the Board Panel finds that the party appealing did so “for the purpose of delay or upon frivolous grounds” the Board may impose a penalty of up to $500 on the employer or its insurance carrier. WCL §23. It is interesting to note that the statute does not contain any similar penalty that could be assessed against the claimant for similarly frivolous appeals.

iv. Cost

There are no filing fees for an appeal to the Board Panel. Costs to the carrier/employer are for the paralegal and attorney time to prepare the appeal. Generally speaking, a paralegal should prepare the cover sheet and certification of service (RB-89) for the attorney to review and sign; an attorney should draft the appeal brief. Letter briefs (a less formal type of brief) are generally submitted.

3. Second Level of Appeal – Full Board and Appellate Division.

The first level of appeal – to the Board Panel – is the mandatory path for an appeal from a Law Judge’s decision. The next level of appeal may offer the litigants a choice of forum. The main consideration for the second level of appeal is the likelihood of success and the costs of pursuing the appeal, as the tactical opportunity (stay) afforded by the first level appeal are not available.

A. The Full Board.

If there is a dissent in the Board Panel decision, appeal may be made to the Full Board. WCL §23. As with an appeal to the Board Panel, there is no cost for this appeal (no filing fee). In an appeal to the Full Board, the Board can either affirm, modify, or rescind the Law Judge’s decision. WCL §23. There is no stay on the payment of benefits during a Full Board review.

A Full Board review is requested by filing “Cover Sheet – Application for Reconsideration / Full Board Review RB-89.2” which is provided by the Board here.

The Full Board may review Board Panel decisions on its own motion or “in the interests of justice” as per 12 NYCRR 300.13(f). The Full Board can also relax the 30-day filing requirements as it sees fit. Id.

B. The Appellate Division.

A party can appeal directly from a Board Panel decision to the civil court’s appellate division. WCL §23. All workers’ compensation appeals are heard in the 3rd Department, which sits in Albany. There are ten justices of the Appellate Division. All are lawyers.

In addition to the general court rules governing appeals (CPLR), each appellate department has its own local rules. The court rules for the 3rd Department are available here.

C. Appealing to the Full Board and Appellate Division at the Same time.

A party can appeal to both the Full Board and the Appellate Division at the same time. There are two reasons to do this: speed and cost.

i. Speed of decision, Full Board and Appellate Court.

The Full Board will generally issue decisions faster than the Board panel. In our experience, the timeline for a Full Board decision is usually 5 – 6 months (as opposed to 10-12 months for a Board Panel). This means that if both a Full Board and a Appellate Division appeal are filed at the same time, the Full Board decision will usually be issued before the record is even “perfected” in the Appellate Division.

In order for the Appellate Division to hear an appeal, the parties must submit a copy of a “record” which serves as the fact basis for the appeal. The record is generally the exhibits, medical records, briefs, and decision of the Law Judge. CPLR §5526. Under the relevant rules, the parties are supposed to agree on the record. CPLR §5532, Rules of App Div, 3d Dept [22 NYCRR] § 800.18.

In practice, the Attorney General, who represents the Board in all appeals to the Appellate Division, is difficult to deal with, slow to respond to proposed records, and generally dilatory. Therefore, the “perfection” of the record, which is supposed to be completed within 9 months of filing a Notice of Appeal, can take up to a year (and require motions to extend the time to submit the record). This delays a decision on the appeal, and considerably slows down the process.

If the Full Board has ruled favorably (recision, modification, reversal) then the Appellate Division Appeal can be abandoned.

ii. Costs of appeal, Full Board and Appellate Court.

There is a vast difference between the average costs for an appeal to the Full Board versus an appeal to the Appellate Division.

Appeals to the Full Board have no filing costs, no special printing costs, and no cost for reproduction of the record. The Full Board does require a special cover sheet (Form RB-89.2) but there are no other formal requirements for the Request for Full Board review or the brief. The cost of filing an appeal to the FullBoard is generally the paralegal/attorney time to complete the necessary filing requirements (cover sheet) and write the supporting brief. Because the brief is often an update or supplement to the already-filed brief in support of appeal submitted to the Board Panel, the cost is generally predictable and minimal.

Appeals to the Appellate Division are far more costly, as there are filing fees, briefing requirements, and printing costs. The Appellate Division imposes a $315 filing fee for all appeals. CPLR §8022(b). Next, there are formal brief requirements, which dictate the type of paper to be submitted, font size, and binding types. CPLR §5530, Rules of App Div, 3d Dept [22 NYCRR] § 800.8. The Appellate Division even has page limitations and required section for the brief, which increases the amount of time it takes for an attorney to draft a conforming brief.

In addition, the Appellate Division requires that the record be submitted according to specific requirements which include format, paper size, binding, and internal citation. The appellant (party seeking appeal) must provide an original and nine copies of the record, as well as ten copies of the brief, to the Court. All of these copies must be printed and bound in accordance with the Appellate Division’s local rules. In practice, most attorneys use a printing vendor to format and compile the appendices and briefs, and to submit them to the Clerk. The costs for the printing and binding alone usually exceed $5,000, depending on the size of the record on appeal. This does not include the attorney/paralegal time to prepare both the record and the brief.

D. Timelines.

Appeals to the Appellate Division follow a timetable set forth in the court rules. Within 30 days of the issuance of a Board Panel decision, the party wishing to appeal must file a Notice of Appeal. Then, the parties must work together to “settle the record” – that is, decide which exhibits, medical records, documents, and testimony should be included in the master record list supplied to the Appellate Division. The court rules allow for a 65-day period where other parties to the appeal can object to the record; then the Appellant (party seeking appeal) can apply to the Workers’ Compensation Board to settle the record. In any event, the record must be settled and the appellant’s brief submitted to the Appellate Division within 9 months of the Notice of Appeal. Then, the respondent has 30 days to file a rebuttal. The appellant can file a “reply” to the rebuttal within 10 days following receipt of the rebuttal brief. Rules of App Div, 3d Dept [22 NYCRR] § 800.8(c).

E. Tactical Considerations.

Because there is no stay on the payment of benefits, there is no advantage to the carrier/employer in a lengthy appeal process. However, if the employer/carrier is successful on appeal, any amounts expended for indemnity or medical during the pendency of the appeal are refunded to the employer/carrier from special funds. WCL §23.

In 2013, which is the last year for which we have statistical records, the Full Board reversed the Law Judge’s decision approximately 10% of the time.

In 2013, the Appellate Court reversed the Law Judge decision 8% of the time.

4. Appeals to the Court of Appeals.

Where there is a dissent in the Appellate Division, appeal can be made to New York’s highest court: the Court of Appeals. The timeline for filing a Notice of Appeal to the highest court is 30 days from entry of the decision below (the Appellate Division decision).

For more on appeals in New York and other related topics in workers’ compensation, join my mailing list:

New York versus New Jersey: Temporary Total Disability.

Why paying partial-temporary disability benefits in New Jersey is wrong.

New Jersey is not a wage-loss state. It is an impairment state. However, some Judges are confused about this and have issued bench decisions awarding partial temporary disability benefits. Luckily those decisions come from Law Judges and do not have any precedential value and are incorrect. Let’s talk about why an award of partial temporary disability is wrong and also the interesting reasons why no one is doing anything about it.

Theoretical Underpinnings of Workers’ Compensation Schemes in both states.

First, it is important to understand the basic difference between a “wage loss” compensation state compensation scheme and a “whole man” or “impairment” state. Prior to the 2007 reforms, New York could be held out as an example of a “wage loss” compensation scheme. Before the reforms, if an injured worker hurt her back and has a significant medical impairment, but did not suffer a reduction in wages, no compensation would be paid. Another good example of a wage loss compensation scheme is the Longshore and Harbor Workers’ Compensation Act as it relates to certain classes of injuries. Under the those compensation schemes, if the injured worker can not demonstrate a reduction in earnings, no compensation could be awarded.

This is easily contrasted with New Jersey’s strong “impairment” theme. Injured workers are compensated according to their residual medical impairment. That is why in New Jersey an injured worker can collect a $100,000 award for a partial permanent disability to the low back, then immediately go back to work at higher wages without jeopardizing her award. It is also why the New Jersey workers’ compensation courts are so keenly focused on the medical reports and IME findings.

The New Jersey statutory scheme is intended to compensate for medical impairments, not wage losses. The Courts apply a two part test for the claimant to show both a “objective medical evidence of a functional restriction of the body, its members or organs” and “impairment of the employee’s ability to work” or “carrying on the “ordinary pursuits of life.” Satisfying the first test is easy: did the petitioner sustain an injury? Getting past the second hurdle to compensability is even easier: Does the petitioner allege that his activities of daily living are curtailed or limitied? Or that their work is “harder” now or more tiring since the accident? In almost every case, the petitioner can not show a wage loss because there is no subsequent wage loss. In fact, they don’t have to – they merely have to allege that their activities of daily living (“pain while playing with my kids,” difficulty playing soccer with my friends,” or “pain when driving long distances”) are now harder then they were before. Those types of flimsy claims are nearly impossible for an employer/respondent to defend against. And that is all the Statute requires because consideration of wage loss is not a part of the compensation scheme.

However, there are some Judges, including supervising judges, who do not understand this ideological distinction.

According to Administrative Supervising Judge Renee Riccardelli, writing for a publication called “Workers’ Compensation Resources”:

Temporary partial disability benefits are not included in the New Jersey workers’ compensation statute and that term is not used in the state. Although the matter has never been adjudicated, the Division of Workers’ Compensation interprets the New Jersey statute to entitle some workers to benefits that correspond to temporary partial disability benefits in other states. The New Jersey temporary partial disability benefits are provided to a worker who has been released for light duty work by the authorized treating doctor while receiving curative treatment and because of the work-related injury or disease the worker earns less than he or she did prior to the injury or disease. The benefits are only paid if the worker has a reduction in earnings for more than 7 days. The temporary partial disability benefits stop under four circumstances: (1) the period of temporary disability has reached 400 weeks; or (2) the worker returns to full-duty; or (3) the doctor releases the worker for full-duty work; or (4) the worker has reached the point of maximum medical improvement when additional treatment will no longer improve the worker’s medical condition. The weekly temporary partial disability benefit is the amount that, in combination with the worker’s earning, are equal to the benefits the worker would have received if totally disabled. Thus a worker who earned $500 per week on the date of injury and who earns $200 a week in light-duty work while receiving curative treatment would receive temporary partial disability benefits of $150 a week, for a total of $350. A worker who earned $500 per week on the date of injury and who earns $300 a week in light-duty work while receiving curative treatment would receive temporary partial disability benefits of $50 a week, for a total of $350. A worker who earned $500 per week on the date of injury and who earns at least $350 a week in light-duty work while receiving curative treatment is not entitled to temporary partial disability benefits.

While an interesting piece of rhetoric, and seemingly fair, this is just wrong. The source of these comments is here.

The argument for partial temporary disability benefits in New Jersey confuses “fairness” with what the law requires. Certainly, employers and carrier in New Jersey can choose to voluntarily compensate their injured employees earning less due to their injuries, but they don’t have to.

Poor reasoning in non-precedential cases

Also, this argument, and the silliness found in the recent decision (2012) in Jose Soto v. Herr’s Foods, ignore the trade-off implicit in an “impairment” state like New Jersey. That trade off is this: while the petitioner is not compensated for wage loss, they also don’t have to show or prove any wage loss to get compensated. You see, it works both ways. Judges want to do the “fair” thing, and that is cute, but what is fair in the individual case violates the statutory scheme. Because it is not “fair” that a worker who has not suffered any wage loss gets to recover huge sums for medical impairment alone, unless the State is an impairment state. Clearly, the law judge never had to explain to an angry employer that their workers’ compensation premiums are going up next year because they paid a huge award for a worker who has returned to his old job and is earning more money now than before the accident.

Although this may seem like inhuman rationalism, it actually underpins the whole justification for these statutory schemes of compensation.

Why no one appeals these bad decisions.

Fear of an even worse decision, somehow agreeing with the Law Judge’s determination, at the appellate level. Stark, naked fear that the Appellate Division Judges will mis-apply the fundamental logic of the “impairment” compensation system adopted in New Jersey and blend some “wage loss” theory into their interpretation of the Act in pursuit of notional “fairness” in one individual case at the expense of the academic cohesiveness and predictability in the rest of the system. This fear is not entirely unfounded. As I will discuss below, there is already one poorly-decided Appellate-level case out there which could be used by the proponents of a “wage loss’ theory to support their arguments for “partial temporary disability benefits” in New Jersey (I discuss the Perez v Capitol Ornament decision, below).

New Jersey already has a twisted “odd lot” doctrine which blends a “loss of earning capacity” analysis on top of compensation for impairment which is frequently relied upon by judges to reward the elderly, the slow-witted, and the uneducated. Additionally, there is some case law (the seminal decision in Perez v. Capitol Ornament, Concrete Specialties, Inc., 288 N.J. Super. 359 [App. Div. 1996]) which could be twisted to serve as a basis for consideration of a wage loss in determining compensability. The decision in Perez, supra is one of the oddest in all of New Jersey compensation. In that case, the Appellate Division found that a workers’ compensation judge could consider the petitioner’s limited educational and intellectual resources in reaching a decision on a level of impairment and compensation. [Note: I couldn’t find a copy of Perez in a “free’ online database – most likely due to the age of the decision, so I include a link to the decision here hosted on my site].

In Perez, the Appellate Panel took notice that the petitioner

was born in Puerto Rico in 1954. He has a sixth grade education, no special education or training beyond that, and is unable to read, write, or understand English. From the age of eighteen, he travelled back and forth between the United States and Puerto Rico working as a farm laborer in Puerto Rico and in landscaping and construction in the United States.

Perez at 363. The Appellate Panel found that the petitioner’s lack of education, illiteracy, and lack of transferable skill should have been considered by the Law Judge in formulating an overall award.

The Appellate Panel cited to a number of decisions in their written opinion, and demonstrated both a confusion of the terms of art and revealed they did not understand the foundation of New Jersey’s compensation scheme.

The Panel cited to Katz v Township of Howell, a pre-reform (New Jersey’s Workers’ Compensation Act was significantly revised in 1979) case in which the Court stated that “compensation is measured by the impairment of earning capacity, immediate or in the future” to stand for the porposition that vocaitonal ability or earning capacity is the standard for assessing compensation in New Jersey. Katz is an outlier decision, rarely cited (if ever) for the proposition that “earning capacity” is compensated in New Jersey. In fact, the decision in Katz actually states, in the sentence immediately preceding the one quoted by the Perez panel:

Contrary to classical theories that workmen’s compensation is based solely upon impairment of earning capacity, our statutory provision for compensation of partial permanent disability, has been authoritatively construed not to require a showing of ‘immediate impairment of earning power’ but to be satisfied by a ‘personal injury which detracts from the ‘former efficiency’ of the workman’s ‘body or its members in the ordinary pursuits of life.“ [citations omitted]

The Panel in Katz was citing Everhart v. Newark Cleaning & Dyeing Co., 119 N.J.L. 108, 111 (E. & A. 1937).

New Jersey is not a wage loss state in determining workers’ compensation awards. Temporary disability awards are not subject to some other standards of applicability. The wrong decision reached in Soto and the incorrect reasoning of Judge Riccardelli are an attempt to graft on a “wage loss” component into a impairment compensation scheme. If allowed to do so, such hybridization threatens the cohesiveness of the statutory whole and would throw into question those cases where the claimant can demonstrate medical impairment (i.e, some injury) but not wage loss (i.e., most cases).

The New York Example.

New Jersey’s practitioners should be forewarned. Combining “wage loss” and “impairment” theories does not result in a predictable, cohesive workers’ compensation. For evidence of that, academic observers should watch what is currently happening in New York.

For more than 100 years, New York operated a hybrid wage loss/impairment catastrophe, where certain injuries (hands, feet, arms, legs, eyes, toes, and fingers, for example) were “scheduled losses” and therefore subject to limitations on maximum benefits payable. However, the claimant did not have to show wage loss in order to keep the “statutory award” for a scheduled body part. In this way, New York is identical to New Jersey for “scheduled loss” (New Jersey’s “Chart”) but for one aspect: in New York, employers are given a dollar-for-dollar credit for all temporary disability benefits issued against the overall value of any scheduled loss award.

In New York, other body parts (neck, back, systems) were not subject to scheduled losses and instead awards were made for wage loss. In 2007 New York revised this system and make the permanent partial disability awards for the previously-unscheduled body parts (neck, back, systems) more akin to scheduled losses with limitations to benefits. However, there is also a wage loss compenent (vocational assement) and benefits are suspended or reduced if the claimant returns to employment but makes the same or more wages then was earned pre-loss.

This has resulted in a confused, incohesive system in which claimants are now actively avoiding determinations that they have reached maximum medical improvement so as to avoid the “capping” of their benefits and the unknown implications of the hybrid wage loss/impairment system now in place for those injuries.

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New Jersey's Compensation Courts determine issue of Employment.

Injured employees frequently try to escape the jurisdiction of the Workers’ Compensation Act by claiming they fit an “exception” to the universal coverage of the law They typically claim either they

  • were not an employee; or
  • they were intentionally harmed by their employer.

Their goal is to sue the employer in civil court, where they can win a higher money award. A new case demonstrates this brilliantly: in the civil court, the estate of a killed employee won $525,000 from a sympathetic jury. The case was ultimately reversed and sent to the Workers’ Compensation Court, where under the workers’ compensation law, the estate was entitled only to a cash payment of $3,500 (for reimbursement of funeral costs).

The Facts

The facts come from a newly-decided case, Estate of Myroslava Kotsovska, by Olena Kotsovska (Decided December 26, 2013). A civil claim was filed by the estate of Myroslava Kotsovska, who claimed that while working for Saul Liebman (81 years old) as a personal aide, she was run over by Liebman and killed. Liebman admits that while Kotsovska was working for him as a personal aide, he lost control of his vehicle, struck her, severed her leg, and ultimately killed her. However, he claimed that although she was working “off the books” for $100 per day as a personal aide/attendent, she was nonetheless his “employee” and therefore any money judgement she obtained from him should be in the workers’ compensation court, not the civil court.

The case was tried before a jury in civil court, who awarded the estate $525,000 for Kotsovska’s pain and suffering.

The defendant appealed the decision, arguing that the plaintiff was really his employee, and that any claim she had should have been adjudicated by the workers’ compensation court. This argument was raised because the total award available for a death claim in the workers’ compensation courts would have been much lower. In this case, where the decedent was 59 years old, apparently unmarried, and does not appear to have any direct dependents, the award under the Workers’ Compensation Law (N.J.S.A. 34:15-13) would have been limited to $3,500 (burial expense) plus the costs of final medicla treatment. In other words, much less then what the estate recovered before a jury.

The Law

The Division of Workers’ Compensation has the exclusive original jurisdiction of all claims for workers’ compensation benefits in New Jersey.

N.J.S.A. 34:15-49 mandates that all questions of compensability be adjudicated in the Division. It states

“The Division of Workers’ Compensation shall have the exclusive original jurisdiction of all claims for workers’ compensation benefits under this chapter.”

As a matter of fact, much of the law of compensability arises in matters in which exclusivity is raised as an affirmative defense to claims for personal injury or death in Superior Court. In such cases, a defendant in a civil case will state that the claim should be properly heard in the Workers’ Compensation Court, not in the Superior (civil) Court. Why would a defendant do this? Because awards in a civil proceeding are generally much higher than the statutory allowances provided to injured workers under the New Jersey Act.

Who is an “Employee” under the Workers’ Compensation Law?

The term employee is “liberally construed” by Workers’ Compensation Judges to bring as many persons as possible within the coverage of the Act. Therefore, a variety of working relationships have been held to be covered by the Act, including those not necessarily confined to traditional employment settings. In this case, it was clear that the alleged employee

  • was being paid “cash” at a rate of $100 per day;
  • her employment was “off the books,” and
  • she was an undocumented worker with no legal right to work in this country.

The question.

In this case, the Superior Court (civil court) went ahead and tried the case, ultimately finding that the estate of the decent was entitled to a pain-and-suffering award. In this matter the defendent filed an Answer setting forth the affirmative defense that the claim should have been dismissed as it was covered by the New Jersey Workers’ Compensation Act, and then followed up with a motion to dismiss based on lack of jurisdiction. The Superior Court found that because the time limit to file a death claim had expired (two years from date of death) by the time the Motion was filed, the matter could not be referred over to the Division of Workers’ Compensation.

The ruling.

The Appellate Court reversed the trial decision awarding $525,000 to the estate of Myroslava Kotsovska, finding that the issue of “employment” should have been decided first by the Workers’ Compensation Law Judge.

Understanding the Courts reasoning.

The controlling statutory law is straightforward: determinations of whether or not an alleged employment is covered by the Workers’ Compensation Act must be decided by a workers’ compensation judge. The Court ruled that vesting exclusive jurisidciton in the Division of Workers’ Compensation would avoid the confusion where the Superior Court and the Compensation Court reach differing conclusions on the issue of employment. Of course, there will be situations (for example, where the workers’ compensation court does not have jurisidiction over one of the parties, such as a party dragged into the civil claim and raising a fellow-servant defense) but the Appellate Panel resolved those by finding that those claims could be heard simultaneously in the Superior Court.

Case: Estate of Myroslava Kotsovska, by Olena Kotsovska, A-5512-11T4 (N.J. Super. Ct. App. Div. 2013).