In Sroczynski v. John Milek, decided December 17, 2008 the NJ Supreme Court found that there can be no legally effective policy cancellation where a carrier fails to prove that it strictly complied with all of the requirements for canceling a workers’ compensation insurance policy. The NJ Legislature established clear and unambiguous requirements in the cancellation statute, which include the requirement that a carrier file with the Compensation Rating and Inspection Bureau the certified statement required in N.J.S.A. 34:15-81(b). However, the Court also held that only parties that have raised this particular filing issue can be granted relief from improper cancellations – past cancellations that were never challenged on this ground will stand because the policyholders waived their right to challenge them.
Who is a “volunteer” and who is an “employee”? The defense of “non-employment” is one of the few affirmative defenses left under the New Jersey Workers’ Compensation Act. This case explores the distinction between and ‘employee’ (whose injuries are compensable) and a ‘volunteer’ (for whom there is no workers’ compensation liability.)
The salient facts of the Flores v. Paragon case are as follows:
•Flores was an undocumented (illegal) worker who was employed by general contractor Bredbenner from April to November of each year. Bredbenner’s business was installing gutters.
•Returning to America after his usual winter stay in Mexico, Flores sought work with Bredbenner.
•Here the story conflicts: Bredbenner testified he had no gutter work for Flores, and instead offered to hire Flores to work at his hose, doing yard cleanup for two days. Pay was $100 per day. Flores testified that he was hiredin his usual capacity as ‘laborer’ without limitation or qualification on the amount or type of work to be done.
•Flores did do yard work for Bredbenner.
•After two days of yard work, Flores accompanied Bredbenner to a gutter worksite. According to Bredbenner, the gutter installation was for a ‘friend’ and the work was unpaid (although Bredbenner was reimbursed for materials).
•According to Bredbenner, Flores offered to help at the gutter installation job, and Bredbenner accepted the offer.
•Flores fell off the roof at the job site, breaking both arms, his nose, and one leg.
Bredbenner argued that Flores was a ‘volunteer’ at the time he fell of the roof – not an employee. Bredbenner argued that Flores ‘offered’ to help and there was no promise of payment for his help. The Judge of Compensation found that Flores was an employee of Bredbenner at the time of the accident. The Appellate Panel agreed.
The legal decision was based on the following factors:
1. Credibility. Basically, the trial judge found Flores more credible than Bredbenner.
2. The statutory definition of employee. N.J.S.A. 34:15-36 defines an employee as “a servant . . . who performs a service for financial consideration.”
3.The prior employment relationship. Flores was able to show a two-year history of working for Bredbenner.
4.The circumstances of the incident. Flores was transported to the work site by Bredbenner, used materials and tools provided by Bredbenner, and worked under the ‘direction and control’ of Bredbenner.
All of the judges acknowledged that the lack of a contract and the fact that Flores was a seasonal employee who had only been back in Bredbenner’s employ for two days complicated the decision.
Case: Flores v. Paragon Construction and Restoration, App. Div. A-1035-07T3, decided September 15, 2008 by Judges Payne and Alvarez. (Note: this blog entry discusses an ‘unpublished’ decision). Also note: I can’t find a copy of this decision online, either at the Rutgers Law Library or the Appellate Division’s page. If you would like a copy of this decision, please contact me directly – my office # is 973-622-3000.
Statute discussed: N.J.S.A. 34:15-36
NEW CASE: FLORES V. PARAGON CONSTRUCTION – DEFINING “EMPLOYMENT”
New Case – Employment – Who Is an ‘Employee’?
Picture: View from via Del Corso, Rome, Italy
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According to the Division of Workers’ Compensation, 197,006 workplace accidents were reported in 2007. This led to 34,556 new workers’ compensation claims being filed. In addition, 4,773 “re-opener” claims were filed.
These figures show almost no changes in the numbers of filed cases over the past year, but do reflect an increase in reported accidents year-over-year (approximately 20,000 more accidents reported in 2007).
On June 11, 2008, the Assembly Judiciary Committee took up a bill that Deputy Majority Leader Joseph Cryan (D-Union) has been pushing for three legislative sessions to cap punitive damage awards in cases where several defendants are determined to share responsibility for a harm.
In such cases, as soon as one defendant reaches a punitive-damages settlement with the plaintiff, that agreed-upon figure will be used to calculate a ceiling on the punitive damages the other defendants may be assessed. For example, should a defendant judged 20 percent liable for a harm agree to pay the plaintiff $100,000 in punitive damages, then the maximum punitive damages the plaintiff could receive would be $500,000, and no defendant would be liable for more than the share of that $500,000 corresponding to his or her comparative liability.
TMWB is monitoring the progress of this important piece of legislation.
The New Jersey Workers’ Compensation system was the focus of an investigation conducted by the Star-Ledger Newspaper , one of the most widely-read newspapers in New Jersey. The articles (which ran consecutively in April) concluded that “bureaucratic delays, politics and poor state oversight have left thousands of injured workers waiting years for the relief promised by the compensation system.” The three-part article has led to a New Jersey Senate Labor Committee hearings scheduled to begin May 5th in Trenton to examine ways to “reform” the workers’ comp system in New Jersey.
To summarize, the Star-Ledger articles were highly critical of the Department of Labor and the Division of Workers’ Compensation – calling our adversarial benefits-litigation process “slow,” “inefficient,” and “harmful.” The stories in the three-part series focused on claimants who waited long periods of time for benefits (including one claimant who died while awaiting medical treatment). Statistics from the Division of Workers’ Compensation show that the average claim scheduled for a pre-trial conference is adjourned 15 times before final settlement!
The Star-Ledger examined the legal education and professional experience of the current Judges of compensation and noted that very few had actually practiced workers’ compensation law before they became workers’ comp judges. Most had political connections and appointments before they were nominated for the bench; the article called the appointment of comp judges a purely “political” process.
In a related article (“Secretive Board of Insiders Steers Workers’ Comp”, date: May 4, 2008) the Star-Ledger investigated the New Jersey Compensation Rating and Inspection Bureau (NJCRIB), finding that the Board of Directors is dominated by insurance executives and that rate hikes had occurred in the last seven years while the national average premium had actually declined (link).
One possibility that insiders have speculated about has been the creation of a “Workers’ Comp Ombudsman” to assist injured workers as they navigate the system and the institution of an “alternate dispute resolution” process (without attorneys representing the employer or employee). Stay tuned.
The sponsor of a measure to expand damages in wrongful death cases, vetoed by Gov. John Corzine because it could fall heavily on public defendants, has reintroduced it and plans to tailor the bill to the Governor’s concerns. The bill would amend the Wrongful Death Act to allow recovery for mental anguish, emotional pain and suffering, loss of society and loss of companionship. Those damages would be available to to those entitled to intestate succession of the decedent’s personal property, namely spouses, children and parents. Presumably, the new bill will give judges authority to strike or reduce “excessive” non-pecuniary damage awards. The newly introduced bill has been assigned to the Senate Judiciary Committee. However, no action is predicted until the fall, after the budget process is completed and the Legislature takes its summer recess.