Multiple Employments and Occupational Claims

NJ Supreme Court Review 1987-1988

By Jon L. Gelman¹

Substantial and significant case law development and procedural changes occurred before the Division of Workers' Compensation during the 1987-1988 court term. Decisions have focused on interpreting the 1979 Amendments to the Workers' Compensation Act in light of the increasing complexities of the industrial arena. Procedurally, the Division of Workers' Compensation is now entering the computer age with technological advancements to manage, track, and dispose of cases more efficiently and expeditiously. A pilot program of DISCUS (Division Status/Case Update System) has been completed. This computerized system will be discussed at length once it has been instituted statewide. 

COLLATERAL ACTIONS
Challenges to the exclusivity provisions of the Compensation Act have continued, and erosion of the prohibition of collateral actions seems to be a growing trend. The third-party tortfeasor, while still barred from obtaining contributions from an employer directly, has been permitted to obtain indemnification based on an express contract. An employee, who was not provided with adequate equipment to repair a fire alarm system, fell through a hole in the roof of premises owned by a third party. A negligence action was commenced by the employee against the third-party property owner. They held that the negligent third party was not barred from enforcing an express indemnification agreement against the employer or from seeking redress under a theory of implied indemnification or contractual duty if it could be established that the employee's injuries were caused solely by the employer's negligence or by its failure to carry out its contractual duties requiring it to protect its employees from dangerous conditions created in the course of maintaining its alarm system. Port Authority of New York and New Jersey v. Honeywell Protective Services, Honeywell, Inc., 222 N.J.Super. 11, 535 A.2d 974 (N.J. App.Div.1987). 

A widow's recovery of dependency workers' compensation benefits from the decedent's regular employer foreclosed a common-law action against the borrowing employer. A corporation engaged in engineering and contracting lent a maintenance worker to its wholly-owned subsidiary, which produced crushed stone and asphalt products. The employee suffered a fatal accident when he severed his leg in a screw conveyor. An action against the subsidiary for common-law recovery was dismissed based on the theory that the fatally-injured worker was a special employee. The court determined that employment status existed through the application of the "right to control test" and "the relative nature of the work test." Santos v. Havens, 541 A.2d 708, 225 N.J.Super. 16 (N.J. App.Div.1988). 

COMING AND GOING RULE
The New Jersey Supreme Court reaffirmed its liberal interpretation of "the going and coming rule" in what it stated was the first review of the rule since the 1979 Legislative Amendments (N.J.S.A. 34:15-7). Compensation was awarded to a department store employee injured in a shopping mall parking lot. The court concluded that the fact that the employer required the employee to park in a distant area of the lot, which was neither owned nor managed by the employer, was an exercise of control over the employee, thus rendering the accident in the parking lot compensable. The Supreme Court has again reaffirmed that the 1979 Amendments do not thwart the remedial purpose and spirit of the Workers' Compensation Act. Livingstone v. Abraham & Straus, Inc., No. A-98, slip op. 1988 WL 66403 (N.J. June 30, 1988). 

The payment of statutory benefits to injured workers continued to be an area to be interpreted by the courts both procedurally and substantively during the 1987-1988 term. While temporary disability benefits are required to be paid on an expeditious basis, the court reserves the right in Hogan v. Garden State Sausage Co. for the parties to amply prosecute and defend a motion with live testimony and the cross-examination of experts. The petitioner, in this instance, filed a claim petition and then three years later filed a motion for temporary disability payments and medical benefits. The petitioner relied upon treating physicians and evaluating physician reports. The respondent answered with similar documentation in opposition. The court ruled that when a motion for temporary disability payments or medical benefits is accompanied by supporting documents from both employee and employer, a plenary hearing should be permitted with cross-examination of the experts' opinions by opposing counsel so that positions can be rebutted so that the court can have a sufficient basis upon which to evaluate the application for relief. Hogan v. Garden State Sausage Co., 223 N.J.Super. 364, 538 A.2d 1254 (N.J. App.Div.1988). 

PENALTIES
The court had an opportunity to evaluate what penalties and causes of action were available to an employee whose temporary disability benefits were unilaterally terminated by the compensation carrier. An employee who sought both compensatory and punitive damages for the wrongful termination of her temporary disability benefits was denied such relief since the court concluded that the sole remedy available to the employee was encompassed in the statutory provisions of the Workers' Compensation Act which assessed a twenty-five percent penalty for unreasonable delays or refusal to make payment. Dunlevy v. Kemper Insurance Group, 220 N.J.Super. 464, 532 A.2d 754 (N.J. App.Div.1987). 

In evaluating a claim asserted for total permanent disability, the court, in Padilla v. Concord Plastics, Inc., ruled that the additional amputation increment was not available in cases where an employee was determined to be totally and permanently disabled. A claimant determined to be totally disabled under the "odd-lot doctrine" was not eligible for the additional thirty percent increment for the amputation of his hand due to an industrial accident. The court also discussed but did not address the issue as to whether or not the Second Injury Fund can be held liable for a portion of the petitioner's disability benefits when the petitioner is deemed permanently and totally disabled because of the "odd-lot doctrine." Padilla v. Concord Plastics, Inc., 221 N.J.Super. 301, 534 A.2d 428 (N.J. App.Div.1987). 

Another decision involving the Second Injury Fund was rendered at the trial level by Judge Byrne, and was affirmed by the Appellate Division, prohibiting the immediate lump-sum payment of the Second Injury Fund's pro-rata share of counsel fees when a third-party tort action has been resolved before the adjudication of eligibility for Second Injury Fund benefits. The Appellate Court reasoned that Fund payments are not considered vested and that deductions for counsel fees should be made when the periodic installments are actually paid by the Fund. The court suggested that any alteration of the statutory proscription should be addressed by the legislature. Cologna v. Chevron, U.S.A., Inc., (unreported decision, A-4435-86T8, per curiam) decided January 29, 1988. 

Death dependency benefit payments awarded to the widow of a deceased employee were found to be solely the employer's responsibility and not of the Second Injury Fund. The appellate division did not accept the reasoning of the respondent/employer that the Fund, which had paid benefits to the deceased employee before his death, ought to continue to pay benefits to the dependent widow. A petition for certification has been filed. Wehrle v. American Can Company, 224 N.J.Super. 400, 540 A.2d 898 (N.J. App.Div1988). 

CONFLICT OF LAWS
As corporate entities become more national in scope through continued mergers and acquisitions, the courts will be faced with increasing situations in which conflicts of law exist. An employee who was a New Jersey resident was sent to South Carolina to provide various design, drafting, and model-building services in connection with his employer's nuclear plant operation. As a result of exposure to radioactivity, he contracted acute myeloblastic leukemia. The employee brought a third-party tort action against the employer, the contractor, various hospitals and doctors responsible for the contractor's medical screening program, and various chemical companies. An issue developed since, in the State of New Jersey, a general contractor is not considered the immediate employer and, therefore, is not immune from tort liability.

On the other hand, South Carolina equates a general contractor with the workers' immediate employer for purposes of workers' compensation. The Supreme Court of New Jersey in Eger v. E. I. Du Pont De NeMours held that New Jersey would apply the foreign state's workers' compensation statute and honor the exclusivity of remedy provisions, thereby barring an action at law against the contractor employer. In balancing the governmental interests involved, the New Jersey court indicated that permitting an action against the contractor would undermine the foundation of the foreign state's workers' compensation statute and disturb the certainty of result in that jurisdiction. The court felt that the central goals of New Jersey's workers' compensation system were served in that compensation benefits were provided and that it was of no significance to the injured employee whether these benefits were paid by the contractor or the subcontractor in accordance with South Carolina's laws. Eger v. E. I. Du Pont De NeMours Company, 110 N.J. 133, 539 A.2d 1213 (N.J. 1988). 

APPORTIONMENT OF DISABILITY
The apportionment of disability and the application of the "last injurious exposure rule" remained a central theme in the evaluation of claims concerning multiple employers and insurance carriers. While following the "Bond Doctrine" in assessing liability against the last employer, Workers' Compensation Judge Joan L. Mott applied the rate of compensation at the time of manifestation and not at the earlier date of exposure to determine the compensation benefits payable to the injured worker. The opinion was affirmed on appeal. In Falcon, the petitioner had multiple occupational diseases claim petitions pending for bladder cancer and related neuropsychiatric disability. The employee last worked with a carcinogen, such as bitumastic tar paint, from August 1, 1978, through March 16, 1979, and it was held that this exposure was a contributing cause of his bladder cancer. The court considered bladder infections that the petitioner had suffered prior to 1980 as merely "pre-malignant" and not necessarily symptomatic of cancer and determined the date of manifestation to be when the disability became "fixed, arrested, and measurable" which was the date when the petitioner was admitted to the hospital for surgery. Therefore, the rate in effect in 1980 (a higher rate following the 1979 Amendments) was utilized in determining benefits to be awarded to the claimant. Falcon v. American Cyanamid, 221 N.J.Super. 252, 534 A.2d 403 (N.J. App.Div.1987), cert. denied 108 N.J. 185, 528 A.2d 14 (1987). 

In a claim involving a latent disease and multiple carriers and employers, the court again reaffirmed its decision that causal relationship remains a threshold test for assessing liability. A boilermaker who had worked from 1946 through 1981 and contracted asbestosis and lung cancer was unsuccessful in attributing a causal relationship to the employers he worked for from 1978 through 1981. The court reasoned that the illness of the petitioner and his death from "undifferentiated small cell carcinoma" in 1982 were neither promoted, aggravated, accelerated, nor exacerbated by his alleged exposures. Even though the employee was exposed to a carcinogen, his failure to establish causality did not permit the court to apply a theory of apportionment or attribution of liability. Ahern v. Brennan Brothers, (unreported decision,A-5334-84T1, per curiam) decided July 8, 1987, cert. denied 109 N.J. 479, 537 A.2d 1274 (1987). See also J. Gelman, "Apportioning Liability in Workers' Compensation Claims", New Jersey Law Journal Vol.121 No.5, Page 1 (Feb. 4, 1988). 

The Appellate Division also focused on applications to review and modify formal awards during the court term. In so doing, the court urged that adequate findings of fact be made at the trial level in light of the evidence. In one instance, the court on review reversed and remanded for additional findings of fact and specification of which facts and testimony were relied upon in reaching the decision at the trial level. Titus v. Howmet Corporation (unreported decision, A-1296-86T8, per curiam) decided October 20, 1987. 

The Appellate Division also provided guidance during the recent court term with regard to the mathematical calculation of disability when a worker has suffered two injuries to the same part of the body. The court stated that the base disability is the percentage adjudicated following the first accident and that any increase in disability is added to that base and not to the original estimate of disability which may have been provided by the petitioner's medical expert. Blau v. United Hospitals Medical Center (unreported decision, A-1700-86T8, per curiam) decided December 16, 1987. 

The workers' compensation lien statutorily created pursuant to N.J.S.A. 34:15-40 has been determined to attach to any payment made to the employee by a third-party tortfeasor or his or her insurance carrier. The employer was entitled to reimbursement for its workers' compensation lien even when the employee collected less than the full value of common-law damages from a third-party tortfeasor underinsured. Laureano v. New Jersey Transit Bus Operations, Inc., 220 N.J.Super. 295, 531 A.2d 1361 (N.J. App.Div.1987). 

CARDIOVASCULAR CLAIMS
In a long-awaited decision, the New Jersey Supreme Court resolved the cardiovascular claim issue that arose out of the 1979 Amendments to the Workers' Compensation Act. Specifically under consideration was the interpretation of N.J.S.A. 34:15-7.2 which formulated specific requirements for the proof of a cardiovascular or cerebral vascular claim. Thomas Hellwig was a steamfitter working for J.F. Rast & Company, Inc. on July 31, 1983 when he suffered a myocardial infarction and died. It was alleged that the stress and strain of his work effort caused the cardiovascular incident. The widow of the decedent brought a dependency action before the Division of Workers' Compensation. The facts were undisputed that the deceased worker returned to work and was required to perform strenuous activities after a seven to nine-week layoff during which time he stayed home doing sedentary activities. On the date he returned to work, which was the date of the infarction, he was required to lift heavy equipment, climb six to eight steps of a ladder at a seventy degree angle and carry doors weighing thirty-five to fifty pounds which he lifted from a cramped position using one hand, all in an area where the temperature was in the eighties, and the humidity was high. The court concluded that the phrase "in excess of the wear and tear of the claimant's daily living" had been intended by the legislature to mean that the specific work effort which caused a cardiovascular or cerebral vascular incident had to be more strenuous than the claimant's daily activities "EXCLUSIVE OF WORK." In finding the Hellwig incident compensable, the court modified the previously far-reaching decision in Dwyer with the statutory qualification enacted by the legislature requiring the work activity which caused the illness or death to be "in excess of the wear and tear of the claimant's daily living." Still, it provided a more liberal interpretation than would have resulted had the employee's ACTIVITIES AT WORK been included in the claimant's daily activities. Hellwig v. J.F. Rast & Company, Inc., 215 N.J.Super. 247, 521 A.2d 896 (N.J. App.Div.1987), cert. granted 107 N.J. 636, 527 A.2d 459 (N.J. 1987), aff'd 110 N.J. 37, 538 A.2d 1243 (N.J. 1988). 

RETALIATORY DISCHARGE
Retaliatory discharge was the subject of two reported decisions involving workers' compensation matters during this court term. A worker who was a maintenance mechanic at an employer's swimming pool chemicals company was injured when exposed to chlorine gas. The petitioner's wife telephoned the employer to inform him of her husband's illness, and shortly thereafter, he was hospitalized because of respiratory failure. The employer sent a report of the accident to the workers' compensation insurance carrier. While in the hospital, the Poison Control Center representative interviewed the claimant and referred him to the Occupational Safety and Health Administration (OSHA) to file an additional report concerning the incident at work. The employee was discharged by the employer, who claimed he was a "troublemaker" for filing the claims. The Appellate Division determined that the discharged employee could maintain an action for wrongful discharge under statutory authority, N.J.S.A. 34:15-39.1, et seq., before the Division of Workers' Compensation. A common law action for wrongful discharge could also be pursued. Cerracchio v. Alden Leeds, Incorporated, 223 N.J.Super. 435, 538 A.2d 1292 (N.J. App.Div.1988). 

In another retaliatory discharge matter, the court held that "an employee under a collective bargaining agreement may seek redress in our courts for a discharge in retaliation for reporting workplace safety violations" and "that a tort remedy for such retaliatory discharge is not preempted by either LMRA or OSHA", LMRA being the Labor Management Relations Act and OSHA being the Occupational Safety and Health Act. LePore v. National Tool and Manufacturing Company, 224 N.J. Super. 463, 540 A.2d 1296 (N.J. App.Div. 1988). 

SOCIAL SECURITY OFFSET
The question of social security offset was addressed by the appellate division during the past court term. Since the Act was amended in 1979 to provide for lump sum payment of workers' compensation benefits, the Social Security Administration has attempted to convert the lump sum payment into a periodic benefit payment and thereby cause a social security setoff. Recently, the U.S. Court of Appeals for the Third Circuit reviewed the actions of the Social Security Administration and indicated that the period of time over which the offset could be calculated was not necessarily the short period of time that the Social Security Administration had desired. The court offered several suggestions for proration of the "Section 20" award and then remanded the case to the lower court for a decision regarding converting the claimant's lump sum workers' compensation settlement into periodic payments. Sciarotta v. Bowen, 20 Soc.Sec.Law Rep. 269, 837 F.2d 135 (3rd Cir. 1988).

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[1] Jon L. Gelman of Wayne, NJ, is the author of NJ Workers’ Compensation Law (Thomson-Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (Thomson-Reuters). For over five decades, the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com have represented injured workers and their families who have suffered occupational accidents and illnesses.

RECOMMENDED CITATION: Gelman, Jon L., Multiple Employments and Occupational Claims, 122 NJLJ 59, No. 7, Page 59 (August 25, 1988) https://www.gelmans.com/ReadingRoom/tabid/65/ArtMID/1482/ArticleID/971/preview/true/Default.aspx

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This article is reprinted with permission from the August 25, 1988, issue of the New Jersey Law Journal. (c)1988 NLP IP Company

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