TTH eNotes: Workers’ Compensation – September 2018

THOMAS, THOMAS & HAFER, LLP INVITES YOU TO JOIN US FOR OUR 16TH ANNUAL WORKERS’ COMPENSATION CONFERENCE:

“The Opioid Crisis in Pennsylvania: What it is, How it Affects Your Claims and Suggested Strategies for Successful Claims Management”

Friday morning, September 28, 2018

West Shore Country Club, 100 Brentwater Rd., Camp Hill, PA

Topics we will explore include:
· The Opioid Crisis: A National Perspective
· Medico-Legal Issues Involving Marijuana
· Alternative Strategies for Dealing with Opioid Addicted Claimants
· Our Ever Popular Case Law Updates

Registration opens at 8:00 a.m. A buffet luncheon will be served.

Offering CE Insurance and PA CLE Credits to PA Licensees (Must attend in person for credits to apply)

Can’t attend? Webinar will be available, so please register for access.

To attend please contact Tony Mariani: (717) 237-7114 or by email to amariani@tthlaw.com

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SIGNIFICANT PENNSYLVANIA CASE SUMMARIES

Boatman v. W.C.A.B (Bortner Bros., Inc.), No. 1771 C.D. 2017 (Pa. Cmwth. August 3, 2018)

By: Mark J. Powell, Esquire (Defense attorney for this case)

· Res Judicata
· Burden of Proof on a Review Petition

Background:

Claimant sustained a work-related right shoulder injury on May 19, 2018. The indemnity portion of the case was resolved in January of 2013. Pursuant to the Agreement, Claimant and Employer resolved wage loss benefits but Employer remained responsible for reasonable and necessary medical benefits related to Claimant’s May 19, 2018 work-related injury. Subsequently, Claimant continued receiving treatment for his right shoulder. He ultimately underwent an involved operative procedure after which Claimant experienced significant relief. Thereafter, Claimant was involved in a motor vehicle accident in which his right shoulder struck the steering wheel of his car. He began receiving treatment for glenohumeral arthritis several months later. Of note, in the Compromise and Release Agreement entered into between the parties, a very detailed injury description was provided which included acromioclavicular arthritis, a biceps tear, and a description of various procedures performed on Claimant’s right shoulder. No condition pertaining to Claimant’s glenohumeral joint was included in the injury description. Claimant received injections as well as other passive treatment for glenohumeral arthritis. Employer denied the treatment at issue as it was for a condition separate and distinct from that described in the Compromise and Release Agreement. Claimant filed Review and Penalty Petitions thereafter which proceeded to litigation before a WCJ.

Ultimately, the WCJ denied Claimant’s Review and Penalty Petitions. In her Decision, the WCJ found that Claimant was seeking payment of medical benefits for a condition beyond the agreed-to injury description as set forth in the Compromise and Release Agreement and was therefore precluded from obtaining the relief sought. Setting aside the preclusive effect of the Compromise and Release Agreement, the WCJ credited the opinion of Employer’s medical expert over that of Claimant. This was based in large part on the doctor’s thorough understanding of the agreed-to injury description and his explanation as to how the condition for which Claimant was receiving treatment differed from those conditions. Claimant appealed to the WCAB which affirmed the Decision of the WCJ. On appeal, Claimant argued that the WCJ erred in concluding that Claimant’s treatment for glenohumeral arthritis was not related to his May 19, 2018 work injury and that the burden of proof on Claimant’s Review Petition should have been placed on Employer as there was an obvious connection between Claimant’s work injury and the treatment he received for glenohumeral arthritis.

Analysis:

The Commonwealth Court affirmed the Decision of the WCJ and the WCAB in all respects. The Court held that Claimant was barred from seeking to expand or correct the description of injury as stated in the Compromise and Release Agreement. Claimant produced no evidence to show that he was the victim of fraud, deception, duress, mutual mistake, or unilateral mistake attributable to Employer with respect to the formulation of the Compromise and Release Agreement. Consequently, the Commonwealth Court was unwilling to permit Claimant to expand the description of injury beyond what was agreed to by the parties.

Additionally, in relation to Claimant’s Review Petition, the Court found that Claimant’s symptoms and need for treatment were not obviously related to the acknowledged injury which, as noted above, was described in significant detail in the Compromise and Release Agreement. The Court noted that additional factors existed further attenuating the connection between Claimant’s work injury and the contested treatment. This included Claimant’s involvement in a car accident in 2013 in which his right shoulder struck the steering wheel and he experienced pain and bruising thereafter. Moreover, Claimant had a history of fracturing his right shoulder as a child. Thus, the factors, when viewed cumulatively, demonstrated that the nexus between the injury in 2008 and the treatment in 2014 was not so obvious that Claimant was entitled to a presumption of their relatedness. Thus, the burden of proof remained on Claimant and Claimant was required to sustain his burden of proof on the Review Petition with a credible and competent medical opinion. As noted above, the WCJ accepted the opinions of Employer’s medical expert over that of Claimant thus relegating the issue on Claimant’s Review Petition on appeal to more of a challenge to the credibility determinations issued by the WCJ.

Take Away:

When drafting Compromise and Release Agreements, one should take care to provide as precise an injury description as possible. Language should be incorporated into the Agreement indicating that treatment will be paid for only for the injury as described in the Compromise and Release Agreement. This should help protect the Employer/Insurer from future challenges suggesting that additional conditions are compensable where payment of ongoing medical benefits have been provided for as a term of settlement. Additionally, the Court did not rule out the possibility that a claimant may be entitled to a presumption of relatedness when filing a Review Petition when the treatment at issues appears to bear an obvious causal connection to a work injury. Thus, one must be sure to supplement the evidentiary record with sufficient detail to show that the issue of causation is not as clear cut as claimants typically assert.

Questions regarding this case may be directed to Mark Powell at 717-255-7645 or mpowell@tthlaw.com.

Armour Pharmacy v. Bureau of Workers’ Compensation Fee Review Hearing Office (National Fire Insurance Company of Hartford), No. 1613 CD 2017 (Pa. Cmwlth. August 7, 2018)

By: Lee Ann Rhodes, Esquire

Background:

Claimant sustained a back injury in 1999 while working for the employer. In 2000, Claimant and the employer entered into a Compromise and Release Agreement, which settled Claimant’s indemnity benefits but left the employer responsible for Claimant’s medical treatment. The employer covered Claimant’s medical treatment following the approval of this Compromise and Release Agreement. In 2015, the employer requested Utilization Review of the topical compound cream prescribed for the Claimant by Dr. Jason Bundy. The Utilization Review Determination indicated that the compound cream was reasonable and necessary for Claimant’s work injury and the employer did not appeal this determination. In early 2016, Dr. Bundy prescribed the identical compound cream to Claimant. Armour Pharmacy dispensed the cream and then billed the employer. The employer refused to pay the bill based on the Utilization Review. Armour Pharmacy timely filed a Fee Review Application with supporting documents. A Fee Review Determination indicated that the employer owed the pharmacy $6,644.30, plus 10% interest to be calculated as of the 30th day after the pharmacy had billed its invoice for payment. The employer requested a hearing to contest the fee review determination on the basis that Claimant had been prescribed compound medications which were overly inflated in price, with self-interest from the prescriber, not FDA approved, and generally contained the same medications that can be taken orally at a significant price reduction. The employer maintained that the medicine was not reasonable nor medically necessary. During the fee review proceedings, the employer offered a copy of a Compromise and Release Agreement, which was approved by a Judge on October 28, 2016, three months after the fee review directed the employer to pay the pharmacy the $6,644.30 amount plus interest. The 2016 agreement provided that upon approval of the Compromise and Release Agreement, the employer would pay only reasonable, necessary and causally related medical expenses incurred before the hearing date. This 2016 agreement specifically indicated that no past, present or future benefits would be paid for any compounded prescription cream, including but not limited to compound prescription creams prescribed by Dr. Bundy. An addendum was added to the Compromise and Release agreement, indicating that the employer had reason to believe that Dr. Bundy had a financial interest in the pharmacy in violation of the Act and the Medical Costs Containment Regulations.

Legal Analysis:

With respect to the fee review proceedings, the Hearing Officer determined that in light of the 2016 Compromise and Release Agreement, the medical fee review determination could not stand. In response to due process arguments raised by the pharmacy, the Hearing Officer explained that he lacked the authority to address constitutional questions. The Hearing Officer found that he also lacked jurisdiction to consider the merits of the 2016 Compromise and Release Agreement, which was a matter committed solely to the discretion of the Workers’ Compensation Judge. The Hearing Officer granted the employer’s motion to dismiss and vacated the Fee Review Determination indicating that it owed $6,644.30 plus interest to the pharmacy for Claimant’s prescriptions. On appeal, the pharmacy maintained that it had a right to payment under Section 301(f.1)(5) of the Act, which is a right protected by due process of the law. The pharmacy further argued that the employer’s 2016 Compromise and Release Agreement was designed solely to nullify the fee review determination and to bypass the fee review procedures set forth in the Act. The employer maintained that Section 449(a) of the Workers’ Compensation Act provided that there is nothing that shall impair the right of the parties interested to compromise and release any and all liability which is claimed to exist under the Act on account of injury or death.

The issue for the Commonwealth Court on appeal was whether a Compromise and Release Agreement can be used to set aside a Fee Review Determination that an employer owes reimbursement to a provider for a particular course of treatment. The Court ultimately vacated the adjudication of the Hearing Officer that the 2016 Compromise and Release Agreement eliminated the employer’s liability to the pharmacy. The Court remanded the case for decision on the merits of the employer’s request for a hearing to contest the fee review determination of July 25, 2016 in favor of the pharmacy.

In making this determination, the Court noted that on May 10, 2016, the employer had denied payment of the pharmacy’s bill in its entirety based on Utilization Review. The employer had attacked the 2015 Utilization Review Determination that the compound cream was medically necessary, but did not appeal that determination in accordance with the provisions of the Act. Neither did the employer seek a Utilization Review of the 2016 prescription that was dispensed by the pharmacy or allege that Claimant’s condition had changed since 2015. The Court noted that the employer’s refusal to pay the pharmacy’s 2016 invoice violated the Act and the department’s regulations. The Court noted that if the employer wanted to suspend its obligation to pay the pharmacy’s 2016 invoice within 30 days, it had to file a new Utilization Review Application in accordance with the Act. The Court further noted that according to regulations, when a bill is denied entirely, the insurer shall provide a written explanation of the denial. The Court reasoned that in the instant case, the employer gave a “false reason” that the invoice was denied on the basis of the Utilization Review. The Court found that this was actually contrary to the 2015 determination of the Utilization Review that the compound cream was, in fact, reasonable and necessary to treat Claimant’s work injury. The Court found that the pharmacy properly responded to the employer’s refusal to pay by submitting a timely Application for Fee Review. Reviewing the language of the Compromise and Release Agreement, the Court noted that the 2016 C&R Agreement actually would obligate the employer to pay for the compound creams in question, as the language of the Compromise and Release Agreement indicated that the employer shall pay reasonable, necessary and related medical expenses incurred before the hearing date of that 2016 C&R Agreement. The Court found that this would include the compound cream issued to Claimant in 2016, which was specifically determined by the fee review section to be reasonable and necessary in 2015, well before the hearing for the 2016 C&R Agreement. The Court noted prior case law holding that a valid C&R Agreement is “binding upon the parties” but noted that the pharmacy in this case was not a party to the 2016 C&R Agreement. The Court reasoned that the employer’s reliance upon Section 449(a)(a) of the Act was, accordingly, misplaced. The Court reasoned that the scope of this section of the Act is limited to the parties’ interest that wished to compromise and release any and all liability under the Act and would not include a medical provider. The Court further found that as a matter of due process, the pharmacy cannot be deprived of its rights under the Act except in accordance with due process law. The Court noted that the Workers’ Compensation Act’s Utilization Review and Fee Review procedures were designed to comport with due process, giving both the employer and provider an opportunity to be heard on factual questions. The Court found that a Compromise and Release Agreement, to which a provider is not a party, cannot be used to deprive that provider of the review procedures and excuse the employer from paying the provider. The Court reasoned that the Claimant in this case had no authority to “release” the employer from its liability to the pharmacy because Claimant was not the person with the claim seeking payment for the bills. The Court reasoned that the employer could also not release itself from liability to the pharmacy, which had already been established by the medical fee review section. The Court found that the parties to a Compromise and Release Agreement can bind each other, but they cannot release themselves from liability to a person who is not party to the Compromise and Release Agreement and who has not given notice or opportunity to be heard on the terms of this Compromise and Release Agreement.

The Court ruled that the fee review hearing officer’s decision that the 2016 C&R Agreement eliminated the employer’s liability to the pharmacy was vacated. The case was remanded, however, for a decision on the merits of the employer’s request for a hearing to contest the fee review determination of July 25, 2016 in favor of the pharmacy. The Court noted that there was no evidence that Dr. Bundy had a financial interest in the pharmacy and there had not been a legal determination that this financial relationship, if it existed, violated the Workers’ Compensation Act.

Take-aways:

The Court in Armour Pharmacy spent some time discussing the due process rights of providers and employers with respect to fee review and utilization review procedures. With respect to the terms of Compromise and Release Agreement in this case, it did appear that the employer was trying to avoid the fee review and/or utilization review processes by means of the settlement. While the Court did seem rather strong in its opinion that parties cannot use a Compromise and Release Agreement to release themselves from liability to a person not a party to the settlement agreement (particularly medical providers), it is interesting to note that the employer in this case was given another chance to challenge the payments owed to the pharmacy through the remand.

Questions regarding this case may be directed to Lee Ann Rhodes at 412-926-1453 or LRhodes@tthlaw.com.

John Dailey v. WCAB, No. 97 C.D. 2018 (Pa. Cmwlth. August 8, 2018) (Unreported Decision)

By: Mary G. March, Esquire

In this unreported decision, the Commonwealth Court addresses the calculation of the pension offset benefit. Specifically, the Court holds that the offset amount to use in the calculation is the full amount the claimant is entitled to receive, rather than a potential smaller amount a claimant is actually receiving due to an election of a joint survivor benefits so that his surviving beneficiary can receive a benefit after his death.

Background:

Claimant had an accepted injury in June, 2013. Subsequently he applied for and received a disability pension with a retirement date of September 8, 2013. On July 9, 2014, the employer issued a notice of workers’ compensation benefit offset.

Testimony was presented on behalf of the employer regarding how the “employer funded” portion of Claimant’s pension was calculated. Significantly, Claimant had elected a “joint survivor benefit” so his survivor would continue to receive a benefit after his death. The Benefits Director testified that she prepared an explanation of the calculation of the monthly employer funded amount, which explained the calculation of Claimant’s maximum single life annuity (MSLA). This document showed claimant’s annual disability MSLA was $14,187.11 and his monthly disability MSLA was $1,182.26.

Claimant presented evidence to show that the monthly benefit he actually receives is $923.00 and not $1,182.26, based on the joint survivor option he elected. The WCJ rejected employer’s evidence as not credible finding that the employer used the wrong amount to calculate the offset. Employer appealed to the Board.

The Board found the WCJ had erred in rejecting employer’s calculation of the pension benefit offset. The Board noted that the WCJ did not have the benefit of the Court’s decision in Harrison v. Workers’ Comp. Appeal Bd. (Commonwealth of Pa.), 165 A.3d 1019 (Pa. Cmwlth. 2017), appeal denied, 179 A.3d 1 (Pa. 2018), which held that the employer is entitled to an offset based on the claimant’s MSLA regardless of the monthly amount paid solely to the claimant under the joint survivor elections. It is from this decision that the Claimant appealed to the Commonwealth Court.

Claimant argued that the offset amount should be based on the amount the claimant actually receives, rather than the maximum amount he could receive.

Analysis:

The Court looked to Section 204(a) of the Act which provides for employer offsets. In particular, Section 204(a) states:

[T]he benefits from a pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by an employe shall also be credited against the amount of the award [of workers’ compensation benefits] made under sections 108 and 306, except for benefits payable under section 306(c ). (77 P.S. Section 71(a)).

Regulations adopted to implement Section 204 of the Act provide that “Workers’ compensation benefits otherwise payable shall offset by the net amount an employe receives in pension benefits to the extent funded by the employer directly liable for the payment of workers’ compensation.” 34 Pa. Code Section 123.8(a) (emphasis added).

Under the Retirement Code, an employee at retirement can choose to receive either a MSLA or a reduced annuity actuarially equivalent to the MSLA in accordance with one of four options. In this case, Claimant elected the option of payment calculated as follows, “A joint and survivor annuity payable during the lifetime of the member with the full amount of such annuity payable thereafter to his survivor annuitant, if living at his death.” This option, essentially provided for a reduced payment to Claimant during his life, so that upon his death his spouse would received a full amount survivor benefit.

In Harrison, the Court considered the issue of whether a compensation offset should be based on a claimant’s net pension or the maximum amount to which claimant was entitled. The Harrison Court determined that the offset should be based on the maximum pension benefits available to the claimant. The reasoning behind this determination was based on the fact that the claimant’s pension benefits choice which had a joint survivor benefit was the “actuarial equivalent” of his MSLA. In plain language, the “claimant’s choice resulted in a lower monthly pension amount so that the employer could fund a lifetime pension for both the claimant and his wife.” Thus, the employer’s funding obligation was not affected by the claimant’s choice.

The Court found that the reasoning in Harrison controlled the outcome of this case. The Employer was found to be entitled to the offset for the benefits it funded and was to be calculated on the basis of claimant’s MSLA, not his net pension.

Take Away:

In cases where a claimant is receiving a pension and the Employer wishes to assert an offset, it is critical to know if the amount the claimant is receiving monthly represents the maximum pension benefits available to claimant or whether it has been artificially reduced to allow a survivor beneficiary to receive benefits post death. Any calculation of Employer offset should reflect the maximum pension benefits available.

Questions regarding this case may be directed to Mary G. March at 610-332-7017 or mmarch@tthlaw.com.

Timcho v. WCAB (City of Philadelphia), No. 158 C.D. 2017 (Pa. Cmwlth. August 17, 2018)

By: Joseph J. Shields, Esquire

The Commonwealth Court reversed the decisions of the WCJ and WCAB, holding that Claimant did not waive his right to raise the issue of constitutionality of his IRE when he failed to raise that issue in a prior round of litigation.

Background:

On May 20, 2008, Claimant sustained work injury which was described as a heart attack and residual heart damage. Claimant began receiving temporary total disability benefits. Employer thereafter requested an IRE which was performed on July 25, 2011 by Dr. Lance Yarus under the 6th Edition of the AMA Guides. The IRE Report determined that Claimant’s whole person impairment rating was 32%. Employer then filed a modification petition seeking to modify Claimant’s compensation status from total to partial disability. The modification petition was granted on July 23, 2013. Claimant appealed the WCJ’s decision and the WCAB affirmed. Claimant then appealed to the Commonwealth Court. Claimant’s sole argument was that the WCAB erred in affirming the WCJ’s decision because Dr. Yarus did not comply with the 6th Edition of the AMA Guides because he did not order or conduct diagnostic testing. Claimant did not challenge the constitutionality of the IRE process as contained in Section 306(a.2) of the Act. The Commonwealth Court affirmed, holding that Dr. Yarus properly relied upon diagnostic testing ordered by a treating physician prior to the IRE and Claimant’s benefits were properly modified.

On January 5, 2016, prior to the Commonwealth Court’s holding, Claimant filed a reinstatement petition asserting that his total disability benefits should be reinstated in light of the Commonwealth Court’s holding in Protz 1, which held that Section 306(a.2) of the Act was an unconstitutional delegation of legislative authority insofar as it prospectively approved versions the AMA Guides beyond the 4th Edition. Claimant argued that his IRE was unconstitutional because Dr. Yarus relied upon the 6th Edition of the AMA Guides. Employer filed a motion to dismiss Claimant’s Reinstatement Petition, arguing that Claimant was precluded from raising a constitutional challenge to his IRE because he had not raised or preserved that issue in his appeal to this Court in Timcho I. The WCJ granted Employer’s motion and denied and dismissed Claimant’s Reinstatement Petition. The WCAB affirmed. Claimant appealed to the Commonwealth Court, arguing that modification of his benefit status was based upon an unconstitutional IRE and that he did not waive this constitutional argument by not raising it in Timcho I. While the appeal was pending, the Supreme Court issued its decision in Protz II, which struck all of Section 306(a.2) of the Act as unconstitutional.

Legal Analysis:

The Commonwealth Court reversed the decisions of the WCJ and WCAB, finding that Claimant did not waive his right to bring a constitutional challenge to his IRE. Employer argued that Claimant’s challenge was barred by the doctrine of administrative finality. The Commonwealth Court held that the issues raised by the parties had been resolved by the Court’s decision in Whitfield v. WCAB (Tenet Health System Hahnemann, LLC). In that case, Claimant appealed the modification of her benefits from total to partial disability based upon an IRE performed in 2006 under the 5th Edition of the AMA Guides. Claimant did not challenge the constitutionality of the IRE. The WCAB affirmed and Claimant took no further appeal. Claimant’s 500 weeks of partial disability benefits expired in 2015, the same year Protz I was decided. Claimant filed a Reinstatement Petition based upon the holding in Protz I. The WCJ and WCAB found that Claimant waived her constitutional claim, and the Commonwealth Court reversed. Protz II has been decided while Whitfield was pending, and the Commonwealth Court held that Claimant was entitled as a matter of law to seek reinstatement of her benefits to temporary total disability status based upon Protz II, as Claimant has filed her reinstatement petition within three years of the most recent payment of compensation as permitted by Section 413(a) of the Act. The Court further held that a claimant seeking to reinstate total disability status must establish that her work injury continues, which she may do through her own testimony. Here, the Court reversed the decisions of the WCJ and WCAB, and remanded the case to the WCJ to determine whether Claimant’s work injury continues, as Claimant was within three years of his most recent payment of compensation when he filed his Reinstatement Petition.

Any questions regarding this case can be directed to Joseph J. Shields at 570-820-0240 or at jshields@tthlaw.com.

Becht v. WCAB (Daqle Holdings, LLC), No. 1655 C.D. 2017 ( Pa. Cmwlth. August 3, 2018)

By: Deborah B. Richman, Esquire

The Commonwealth Court provided a thorough explanation of terms of art in workers’ compensation law, including, “aggravation” and “recurrence.”

Background:

On May 4, 2010, while working for Employer as a director of operations, Claimant sustained an L4-5 spinal injury that required surgery. Employer eventually filed a Termination Petition based upon the testimony of Dr. Gerard Werries that Claimant had fully recovered from the work injury and subsequent fusion at L4-5; and that Claimant’s mild arthritic changes at L3-4 were not due to the work injury/fusion, but to natural progression of arthritis. The WCJ granted the Termination Petition and Claimant went back to work for Employer. About six months later on March 18, 2015, Claimant twisted her back at work. She filed a Reinstatement Petition alleging a recurrence of her 2010 injury and a Claim Petition alleging an aggravation of pre-existing spinal stenosis incurred on March 18, 2015. The WCJ found the Reinstatement Petition barred by res judicata and collateral estoppel and denied the Claim Petition The WCAB affirmed.

Legal Analysis:

The Commonwealth Court affirmed that the Reinstatement Petition was barred by res judicata and collateral estoppel, as it was an attempt to expand the scope of the 2010 injury to include the 2015 injury; or to include the L3-4 level changes which were previously found to be non-work-related. The Court found that the WCJ improperly denied the Claim Petition based only upon the finding that Claimant was treating for symptoms for the 2010 injury 13 days prior to the March 18, 2015 work incident, and otherwise seemed to ignore the March 18, 2015 incident and Claimant’s expert’s uncontradicted testimony about it. The Court held that the failure of the WCJ to issue any findings upon whether the March 18, 2015 work incident contributed to Claimant’s disability was an error of law, and the case was remanded for further findings of fact as to this issue.

Take Away:

The Court provided instruction as to the precise definitions of “aggravation” which is a term denoting a new injury, versus the resumption or manifestations of symptoms from a past injury which is known as a “recurrence.” Both aggravations and recurrences of prior work-related injuries are compensable under the Act, as are work-related aggravations of a prior non-work related conditions.

Any questions regarding this case can be directed to Deborah B. Richman at 215-564-2928 x 8502 or at drichman@tthlaw.com.

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SIGNIFICANT NEW JERSEY CASE SUMMARIES

Washington v. Runnells Operating, LLC, A-3996-16T2 (App. Div. July 25, 2018)

By: Deborah B. Richman, Esquire

Summary judgment dismissing a negligence claim was upheld without prejudice due to the exclusivity of the Workers’ Compensation Act, when Petitioner was injured on the employer’s premises during his regular lunch hour.

Background: 

On March 25, 2015, Petitioner left work during his regular lunch hour and drove to pick up lunch at a nearby restaurant. Upon his return to work, his car struck a guardrail on a snow-covered access driveway owned by the employer. While at the scene completing an accident report, he slipped and fell, fracturing his ankle. He filed suit against the employer claiming negligent maintaining of the driveway and seeking compensatory damages. The employer moved for summary judgment, asserting the exclusivity bar of the Workers’ Compensation Act as a defense. The trial court granted the employer’s motion for summary judgment with prejudice, on the basis of the exclusivity bar of the Act. The Appellate Division agreed that summary judgment was appropriate because no material facts were in dispute and the trial judge reached the correct decision as a matter of law. However, the Court determined that summary judgement should have been granted by the trial court below without prejudice, unless or until there was a determination of compensability under the Worker’s Compensation Act.

Legal Analysis: 

Entitlement to workers’ compensation is subject to the “premises rule.” N.J.S.A. 34:15-36. The pivotal issues to be addressed under the premises rule are where the accident took place and whether the employer had control of the property on which the accident occurred. Secondly, the injury must, “arise out of” the employment. N.J.S.A. 34:15-1. In Zahner v. Pathmark Stores, Inc., A-5673-97T3 (App Div. May 28, 1999), it was determined that injuries that occur on an employer’s premises within the employee’s regular lunch hour arise in the course of employment. In this case, because the employer owned and controlled the driveway where the accident occurred, Petitioner was found to have been on the premises and the accident during the lunch hour was found to arise out of the employment. Therefore, the Court determine that the administrative agency of the Workers’ Compensation Division, had primary jurisdiction.

Take Away: 

The Workers’ Compensation Act can and often should be argued as a defense when faced with a negligence suit. Litigating in the workers’ compensation arena has definite advantages to employers/respondents in limiting exposure: under the Workers’ Compensation Act respondents control the medical treatment and the petitioners’ temporary disability benefits can be “capped,” limiting the amount of both temporary and permanency benefits.

Any questions regarding this case can be directed to Deborah B. Richman at 215-564-2928 x 8502 or at drichman@tthlaw.com.