The Coming and Going Rule
NJ Supreme Court Review 1991-1992
The 1991-1992 court term produced a flurry of judicial decisions affecting the fundamental aspects of the Workers' Compensation Act. Issues concerning the coming and going rule, mental stress, legal malpractice, judicial salaries, the exclusivity bar of the Workers' Compensation Act, medical expenses, liens, cancellation of insurance, overpayments, job security,] and the admissibility of expert testimony became the focus of judicial decisions.
"Coming and Going Rule"
A traditional and basic concept of the Workers' Compensation Act is that an employee must be within the scope of the employment in order to receive benefits. A long-standing exception to this fundamental concept was that an employee was entitled to receive benefits if he was "going and coming" to and from the place of employment. In 1979, the New Jersey Legislature amended the Workers' Compensation Act to restrict off-premises claims to those involving the "direct performance of duties assigned or directed by the employer" N.J.S.A. 34:15-36.
In a 5-2 decision authored by Justice O'Hern, the Supreme Court held that an accident occurring after normal working hours and while an employee was operating his own vehicle and parking it at an off-site area not furnished by the employer, was not considered to be within the statutory exception of the "going and coming" rule. The injured worker operated a tractor-trailer for his employer; he was required to own the tractor which he parked at his home and the trailer which he parked at the site of an acquaintance near his home. The injury occurred after the employee had made a delivery to a supermarket and after he had unloaded empty palletts at his employer's. He returned home to park the vehicle which contained only 30 of his own pallets. Approximately 300-400 feet from his home he stopped the vehicle and attempted to secure pallets that were moving about the trailer, and in that effort, he was injured. The workers' compensation trial Judge, Philip N. Gumbs, indicated that the employee had left the scope of his employment when he exited the employer's parking lot after leaving some pallets at that site prior to going home. The Appellate Division's reversal of the trial level decision was overturned by the Supreme Court. Its interpretation of the legislative provision was consistent with the restriction of benefits even when an employer-authorized vehicle is utilized in business authorized by the employer or on route to a distant job site. The court reasoned that once the employer had finished his tasks, he was free to pursue any activities he wished. Since he was not returning from a distant job site but going directly home, he was no longer within the scope of employment. Zelasko v. Refrigerated Food Exp., 608 A. 2d 231 - NJ: Supreme Court 1992.
In a series of cases, the Appellate Division focused its attention upon the expansion of the exceptions to the exclusivity doctrine which bars an employee from filing a civil action against his or her employer. The court concluded that an employee may have an action directly against an employer where there is fraudulent concealment of evidence with resultant interference with the prospective economic advantages to be gained from a third party lawsuit. In order to pursue a fraudulent concealment action, the employee must demonstrate that the employer was legally obligated to disclose information to the employee, that the information was material to the employee's personal injury case, that the employee could not have readily learned it without the employer's disclosing it, that the employer intentionally failed to disclose it, and that the employee was harmed by relying on the non-disclosure. Viviano v. CBS, Inc., 251 N.J.Super. 113 (App.Div.1992).
In this matter, an employer and a supervisor of the employer fraudulently concealed from the injured employee a memorandum which had been prepared three days after the injury occurred. The memorandum contained key information required by the employee to recover for injuries in a product liability action including evidence identifying a timer on a press as a defective component which was responsible for the malfunctioning of the equipment and the name of the company that manufactured the timer. The memorandum also contained information that the employer had removed the timer and discarded it immediately after the accident.
The court reasoned that where there is concealment of evidence by the employer which would have benefited the employee in the pursuit of a third party action, the employer is responsible for damages. In the concealment of evidence in tort, the following elements must be present: pending or probable litigation involving the plaintiff; knowledge on the part of the defendant that litigation exists or that it is probable; willful or, possibly, negligent concealment of evidence by the employer designed to disrupt the employee's case; disruption of the employee's case and damages proximately caused by the employer's actions. In the Viviano matter, the employer was held liable for punitive damages. The court rationalized that the employer should not be immunized for the willful destruction or concealment of evidence. The civil litigation system, as established by the State of New Jersey was founded in part on a litigant's ability under the authority of the Supreme Court rules to investigate and uncover evidence after the filing of a lawsuit. The court concluded that the intentional destruction of the evidence in this case demonstrated a "shocking disregard for orderly judicial procedures and offends traditional notions of fair play."
In another matter, the court proposed permitting recovery by an employee directly against an employer when the "employer's negligence is so extensive that it borders on wanton conduct." In Seeley v. Cincinnati Shaper Co., Ltd., 256 N.J.Super. 1 (App.Div.1992), an employee was seriously injured while operating a press brake designed to fabricate metal by compressing it between two dies. The employer gave an 18 year old plaintiff a 15 minute orientation on the operation of this dangerous machine and gave little attention to the extensive safety information provided by the manufacturer. Ultimately the machine was operated in a substantially altered condition and without a point of operation guard. The operator's lack of experience and training compounded by the absence of the safety mechanism resulted in an injury causing his hand to be severed at the palm. Micro-surgery was performed and the hand was reconstructed, but movement was only partially restored since the hand was fused into a semi-closed position. The Appellate Division indicated that the workers' compensation system provides relatively inadequate recovery and suggested an alternative remedy for such conduct on the part of an employer. The court suggested that the "exclusivity bar" established under N.J.S.A. 34:15-8 should not prohibit an indemnification against the employer even if the wrong fell short of an "intentional wrong." The court further suggested that a comparative negligence standard may be utilized in assessing damages directly against the employer above and beyond the workers' compensation remedy.
The Law Division has addressed a persistent problem faced by injured workers prosecuting claims before the Division of Workers' Compensation. Providers of medical services have in the past been reluctant to await a determination by the Division of Workers' Compensation before pursuing a collection action against the injured worker for the cost of medical services rendered in conjunction with the work-related event. The Law Division has ruled that the Division of Workers' Compensation is responsible for determining whether an employer is required to pay for the employee's medical treatment and whether the cost of the treatment is, therefore "authorized" and chargeable to the employer. The court held that the provider is prohibited from filing an action against the employee until a determination has been made before the Division of Workers' Compensation as to whether or not the employer is responsible for the medical care. The court reasoned that a party must ordinarily exhaust all available administrative remedies before resorting to the courts and that the Division of Workers' Compensation has greater expertise in dealing with the issues of medical compensability in workers' compensation matters. Kinley Physical Therapy Services, Inc. v. Kramer, 256 N.J.Super 355 (Law. Div. 1992).
Workers' compensation liens asserted against third-party recoveries received an extensive judicial appellate review during this term. In Fiore v. Trident Construction Company, 251 N.J.Super. 101 (App. Div. 1991), the Appellate Division held that even though a workers' compensation award is subject to an offset for federal or state disability benefits, the employer's payment of its pro rata share of the employee's third-party counsel fee does not constitute a compensation benefit but rather a statutory reimbursement to the employee for counsel fee in recovering the employer's lien pursuant to N.J.S.A. 34:15-40. Therefore, the employee is entitled to a lump sum payment of the respondent's pro rata share of the counsel fee without a setoff against Social Security or other offsettable benefits.
An apparently overriding opinion regarding the need to perfect a workers' compensation lien was handed down by the United States District Court for the District of New Jersey in April of 1991. The court determined that, although the third parties had actual notice that the employees had applied for workers' compensation benefits prior to settlement of this aspect of their claim, the employers had not served written notice of their lien by registered mail, return receipt requested, before the beneficiaries of both the workers' compensation benefits and the third party action had settled with the manufacturers, subsidiary, and operator of the third party helicopter.
In this instance, the court determined that the plaintiff workers' compensation insurance carrier had failed to perfect a statutory lien for third-party recovery under Section 15-40 of the New Jersey Workers' Compensation Act, N.J.S.A. 34:15-40(d) and (g), and were, therefore, barred from seeking reimbursement from the defendants. The court reiterated that the insurance company was required to serve notice by registered mail with a return receipt requested before the defendants had settled with the decedent's beneficiaries. In an opinion by Chief Judge Gerry, the court stated that the statute does not provide merely that notice be given but that it also describes explicitly the proper form of notice. The fact that the defendants were served with a copy of a memorandum setting forth "intention to insert a claim for workers' compensation benefits on behalf of the Trump Organization" clearly was not the notice required by the Statute. Trump Taj Mahal Associates v. Costruzioni Aeronautiche Giovanni Agusta, et al., 761 F. Supp. 1143 (D.N.J., 1991).
The Supreme Court indicated that there is no conceivable policy objection to allowing an injured person to retain two recoveries that, when combined, still do not make him whole. An injured employee has no liability to repay a workers' compensation carrier unless the total recovery received by way of workers' compensation benefits and uninsured motorist recovery exceeds his total loss. A workers' compensation lien does not attach to proceeds of an uninsured motorist recovery in cases in which the uninsured motorist proceeds, together with the compensation payments, are less than the full amount of the petitioner's loss. The court reasoned that where an injured party's combined compensation and uninsured motorist recoveries do not indemnify him in full for his loss, the remedy fashioned to forestall a double recovery is inappropriate and unjust. Charnecky v. American Reliance Insurance Company, 249 N.J.Super.91 (App.Div.1991), 127 N.J.188, (1992).
The rights of lienholders have been declared to be nonderivative. A personal injury protection carrier who acts as primary payor with regard to treatment for injuries sustained in a work-related event must be afforded the opportunity to consent to a resolution of the claim when there is an Order Approving Settlement with Dismissal entered in accordance with N.J.S.A. 34:15-20. In a dependency claim filed before the Division of Workers' Compensation, a personal injury protection carrier intervened in the pending workers' compensation action in an effort to protect its interests and pursue its statutory right of reimbursement for the full amount of the PIP payments made on behalf of its insured. The right to reimbursement of a PIP carrier is recognized pursuant to N.J.S.A. 34:15-1.1. When disposing of the workers' compensation action, the court sought only the consent of the respondent employer and the petitioner and did not seek the consent of the personal injury protection carrier. The reviewing court held that the right of the personal injury protection carrier was a direct right against the employer pursuant to N.J.S.A. 39:6A-6 and was not a derivative action. The Division of Workers' Compensation could not ignore the right of the PIP carrier, and the consent of the PIP carrier was required in order to effectuate a settlement pursuant to N.J.S.A. 34:15-20. Hetherington v. Briarwood Coachlight, 253 N.J.Super. 484 (App.Div. 1992).
The Appellate Division provided a liberal interpretation to cancellation of contract provisions and requirements both statutorily and under the Workers' Compensation Act. The court determined that the notice requirement could be satisfied by providing a written notice of additional intent not to renew the employer's policy by sending such a notice 89 days before its expiration. While there is no minimum notice period required for workers' compensation policies, the court reasoned that commercial policies are subject to a maximum of 120 days and a minimum of 30 days prior to the expiration of the policy. Meric Trucking and Leasing Co. v. Philip Lehman Co., LTD., 247 N.J.Super. 261 (App.Div. 1991).
The New Jersey Supreme Court reviewed and approved the procedure utilized by the Division of Workers' Compensation for salary adjustments for hearing officials. The 1988 Appropriations Act required that the State Treasurer, the Commissioner of Personnel and the Director of the Division of Budget and Accounting establish rules and regulations governing the salary ranges and rates of pay of executive branch employees which include judges of compensation. Through the Appropriations Act, the legislature delegated to the Salary Adjustment Committee the power to promulgate regulations concerning the salaries of State executive branch employees. The New Jersey Supreme Court approved the procedure for the years 1987 and 1988. In the matter of Boyan, 127 N.J. 266, (1992).
The recovery of the overpayment of benefits by a workers' compensation carrier was approved by the Appellate Division in a situation where the employer paid the benefits on an accelerated basis. Where the insurance carrier mistakenly accelerated a workers' compensation award and paid weekly benefits over a 7 1/2-year period instead of a 9-year period, the court held that the insurance carrier was entitled to recover the overpayment. The court reasoned that there should not be duplicative payments for the same disability and that if a finding of unjust enrichment is made before the Division of Workers' Compensation, the insurance carrier can seek a summary disposition pursuant to R.4:67-1, et seq. Montgomery v. Abex Corp., 253 N.J.Super. 480 (App.Div. 1992).
The Supreme Court has provided further guidance concerning the admissibility of expert testimony in occupational exposure claims. The court has departed from the traditional test governing the admissibility of expert testimony. The court has recognized the extraordinary and unique burdens facing the plaintiff who seeks to prove causation in toxic tort litigation. In toxic substance litigation, establishing proof of causation is complicated because of the long latency period of the illness caused by the carcinogen or other toxic chemicals. The time frame between exposure and manifestation may amount to 20, 30, or 40 years. The court also considered the fact that before scientists will accept a new theory, an extremely high level of proof is required. Therefore, the court in Rubanik departed from the "general acceptance" standard in toxic substance litigation and held that even though a scientific theory of causation has not yet reached general acceptance, it may be found to be sufficiently reliable for admissibility if it is based upon sound scientific methodology that involves data and information of the type reasonably relied upon by experts in the particular field, and that such scientific knowledge must be offered by an expert who is sufficiently qualified by either education, knowledge, training or experience in the particular field of science. The court further determined that the expert must possess a demonstrated professional capacity to assess the scientific significance of the data and information and to explain the bases for the opinion reached.
In the case at bar, two employees were exposed to PCB's at their place of employment. One employee worked from 1974-1979, was diagnosed in 1979 at the age of 28 as suffering from colon cancer, and died within one year of diagnosis. Another employee who worked for 30 years for the same employer was diagnosed with colon cancer and died at age 52. The plaintiff offered, as an expert, an individual who held a doctorate in biochemistry, had been a primary researcher at the Sloan-Kettering Cancer Center in New York City for over 37 years, was a member of the National Large Bowel Cancer Committee, associate editor of the publication General Cancer Research, and had personally authored or participated in the publication of approximately 170 scientific articles of which approximately 15 concerned carcinogeneses. The expert's testimony was offered to establish the causation between exposure to PCB's and colon cancer. It was based upon several factors, including a low incidence of cancer in males under 30, the decedent's personal history, including diet, smoking habits, and family history, the fact that 5 out of 105 employees at the same employer developed cancer during the relevant period, "a very large body of evidence" showing that PCB's produced cancer in experimental animals, and 13 articles concerning the effects of exposure to PCB's on animals and human beings. The court took into consideration the difficulty of estimating the impact of environmental and occupational carcinogens and the lack of clear insights into the disease's (cancer's) molecular basis. The court enunciated that the purpose of science is to learn physical facts whereas the purpose of law is to resolve disputes and to facilitate a structure for the organization of a just society. The court concluded that determining the reliability of a complex theory of causation in toxic substance litigation was not a question of law but rather a question of fact. Rubanik v. Witco Chemical Corp., 125 N.J. 421 (1991). The testimony of a physician/epidemiologist concerning studies that demonstrated a positive correlation between asbestos and colon cancer was deemed admissible.
The testimony of the expert concerning the studies demonstrated a positive correlation as to cause and effect and was considered admissible even though the physician stated that the authoritative studies generally showed risk factors below 2.0. Grassis v. Johns-Manville Corp., 248 N.J.Super. 446 (App.Div. 1991).
In a case dealing with both the right to control test and intoxication, the court held that a property owner is not considered to be the employer of an employee whose subcontractor and/or general contractor has failed to obtain workers' compensation insurance coverage. The operation of N.J.S.A. 34:15-79 does not create an employer-employee relationship between a property owner and an employee in such an instance. In Pollack, the court reasoned that an employee of an uninsured subcontractor is not to be considered an employee of the property owner if the sub-contractor had actual control over the employee's actions. The employee was under the actual direction and control of a sub-contractor who determined what work the employee would perform to install the equipment, who provided the employee with tools to perform the task and who transported the employee to and from work. The sub-contractor also made payment to the employee and determined the number of hours the employee was required to work.
This case was further complicated by the fact that the employee, who was installing boiler and gas lines and who stopped working every half hour to go to a bar for two shots of alcohol and a glass of beer, was considered to have died from natural causes of pre-existing alcoholism even though he fell from a ladder while at work. On admission to the hospital, the diagnosis was made of pre-delirium tremen as well as fractured ribs. During his medical care, the petitioner lapsed into a coma and died. The cause of death was described as hepatic failure, which was indicated to be a failure of the liver to detoxify the blood. Contributing causes of each included Laennec's cirrhosis of the liver due to alcoholism, ascites, delirium tremens due to alcoholism, dementia due to Korsakoff Syndrome (due to alcoholism), respiratory arrest, disseminating vascular coagulopathy, rib fractures, right calcaneus fracture, and heart failure. The treating physician sarcastically remarked that the decedent would not have died but for the accident since he would have been able to walk and get a drink, but since he stopped consuming alcoholic beverages, several complications resulted, leading to his liver failure and resulting death. The appellate court was unable to find in the record a causal relationship between the employee's accident and his death. Pollack v. Pino's Formal Wear & Tailoring, 253 N.J. Super 397 (App.Div.1992).
In another matter, the Appellate Division indicated that public employees were not conferred with additional rights by the Legislature regarding job security based on their ability to collect workers' compensation benefits. An injured employee receiving workers' compensation benefits may be discharged along with other State employees in a general reduction in force based upon budgetary problems. Novak v. Camden County Health Services Center Board of Managers, 255 N.J.Super. 93 (App.Div. 1992).
Attorneys handling workers' Compensation claims were alerted to the fact that they may be subject to malpractice claims for failure to bring timely third-party actions. Crespo v. Stapf, et al, 608 A. 2d 241 - NJ: Supreme Court 1992. Careful explanation and discussion with clients regarding the scope of the attorney's representation would appear to be obligatory, with a written understanding of this scope signed by the client so that he/she may seek other counsel with regard to any third-party claim.
The Supreme Court handed down a split decision regarding the standard for awarding permanent disability for psychological illness arising out of stressful work conditions. The court affirmed the opinion of the Appellate Division, which stated that stress must stem from objectively proven stressful work conditions rather than from conditions the petitioner found stressful. The court required the establishment of conditions "peculiar" to the workplace and which justified the medical opinion that they were the "material" causes of the petitioner's disability, Goyden v. JUDICIARY SUPERIOR COURT, 607 A. 2d 622 - NJ: Supreme Court 1992.
In Goyden, the lower court awarded total disability benefits to the petitioner, a supervisor of records in the office of the Clerk of the Superior Court, because of a chronic and severe depression attributable to his work. The judge relied on the Williams decision, which permitted benefits for emotional injuries caused by gradual job-related mental stress in cases in which there is objective evidence of job stress which, when viewed "realistically," establishes working conditions sufficiently stressful to contribute to the development of a mental disorder. The decision also emphasized that the employee's subjective reaction should not be disregarded. Williams v. Western Electric Company, 178 N.J. Super. 571 (App. Div. 1981).
The Appellate Division reversed, and the majority of the Supreme Court affirmed the Appellate decision for the reasons stated above. However, there was a strong dissent that stated that the Supreme Court had now imposed a requirement that a worker's response to workplace conditions be objectively reasonable, a requirement that is not found in the Workers' Compensation Act or in prior case law. The dissenting judges further stated that both the Legislature and the Court had followed the principle that a workplace injury is compensable if it is induced by conditions peculiar to the petitioner's work regardless of the employee's predisposition, which includes his particular character or personality. These judges concluded that the petitioner's stress was specific to his work and peculiar to his occupation and was a substantial cause of his mental condition. The dissenting judges concluded that a disability can be compensable in cases in which the work conditions were not the sole factor in causing the injury or illness as long as they are a contributing factor. "That Goyden's particular characteristics as a person may have made him more sensitive or susceptible to the influences of stress or even predisposed to develop a psychological illness does not impugn the court's conclusion that his disability arose out of and in the course of employment."
In addition to the case law discussed above, the workers' compensation bar met with the adoption of new Rules of the Division of Workers' Compensation during the 1991-1992 court term. N.J.A.C. 12:235-1 et seq. As we move through the economics of the 1990's, it is more important than ever for the Division of Workers' Compensation to keep pace in awarding benefits to deserving injured workers and denying benefits to those whose injuries or illnesses do not fall within the bounds of the Act.
The author, Jon L. Gelman, practices law in Wayne, NJ. He 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 firstname.lastname@example.org have represented injured workers and their families who have suffered occupational accidents and illnesses.
Recommended Citation: Gelman, Jon L., The Coming and Going Rule, www.gelmans.com (1992),
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