Determining Who's Liable: Analyzing Causation and Liability Issues When There Are Multiple Carriers, Employers and/or Claims

New Jersey -- Workers' Compensation

If you are a practitioner in the area of workers' compensation, you cannot avoid one day being involved in a multi-respondent or multi-claim situation where it seems almost impossible to determine who, if anyone, is liable for the alleged injuries. In some cases where there may be 20 or more pending claims filed by one petitioner, you may feel that you are in a three-ring circus with everyone pointing the finger at one another. Looking at significant case law can point you in the right direction in sorting things out.

Of course, you want to make some preliminary determinations as to certain issues, including employment, coverage during that employment, whether the alleged injuries/conditions may have arisen out of and during the course of the employment, as well as jurisdiction. If you answer these questions in the affirmative, you will likely remain a party to the claim and play a part in sorting out the causation and liability issues. Most often, parties and some judges jump to the question of "who's the last carrier/employer?" as determinative of the issue. However, this is not always the correct analysis. In fact, there are three primary causation/liability scenarios that you may encounter that require three different legal analyses.

All Alleged Occupational Exposure Claims With No Specific Accidents

When a petitioner files a claim or claims alleging that injuries or conditions developed as a result of work at one or more employers over a period of time, the Bond analysis applies. These types of claims make it difficult to pinpoint liability because the petitioner generally has worked for many years before the claim is filed. During that period of time, the petitioner may have changed employers, or carriers may have changed if there is only one employer. Because there is not any specific incident to point to, the court in Bond v. Rose Ribbon & Carbon Mfg. Co., 42 N.J. 308 (1964) held that the carrier or employer during whose employment or coverage the disease was disclosed through medical examination, work incapacity or manifest loss of physical function is liable. Most often, this is deemed to be the last carrier or employer on the risk when the petitioner stops working. However, the last carrier or employer should not merely concede liability on this basis. The last carrier/employer should review the medical and factual information to determine if there was manifestation of the condition prior to the employment/coverage; if so, liability may lie elsewhere. Furthermore, the last carrier/employer should determine whether there was even any alleged exposure; if not, there would not be a basis for liability. Additionally, the last carrier/employer should determine the length of employment/coverage; if there is a short period of time, arguably there would be no liability.

Specific Accident Followed By An Alleged Occupational Exposure Claim

Where a petitioner sustains an injury as a result of a specific or "traumatic" accident and then files a subsequent occupational claim alleging injury to the same body part, the Peterson analysis applies. It is noteworthy that there may or may not have been a claim filed for the initial specific accident. The issue in these situations is whether there is any objective proof of worsening or aggravation since the initial injury. The court in Peterson v. Hermann Forwarding Co., 267 N.J. Super. 493 (App. Div. 1993), certif. denied, 135 N.J. 304 (1994) looked to see if there were any specific accidents at the subsequent employments/coverages, whether the same body parts were involved, and whether there was proof of a work injury or disability from the subsequent employment/carriers. Judges will look at the medical records to see if there are any medical evidence/diagnostic studies evincing a worsening, as well as deterioration, in the petitioner's activity levels from the time of the specific incident through the alleged occupational exposure period. If there is no such evidence, arguably there would be no liability.

In 2009, the Appellate Division revisited the Peterson analysis in the matters of Singletary v. Wawa and Zrno v. Wegmans. In the matter of Singletary v. Wawa, 406 N.J. Super. 558, 968 A.2d 746, the Judge of Workers' Compensation found that the petitioner's injuries from prior specific accidents were aggravated by her later occupational duties with the employer, ultimately requiring the petitioner to undergo a surgery. The Appellate Division agreed. The court looked at the types of work the petitioner was performing during the alleged occupational exposure period, whether there had been any decrease in activity level, whether there was an increase in medication intake, as well as the length of time that she was working from the time of the specific incident through the alleged occupational exposure, in determining whether there was material contribution by the occupational duties to the condition. The court found compelling the evidence that the petitioner would not have needed surgery if she had retired after the initial injury instead of continuing with the types of duties she was performing.

Contrary to Singletary, the court reversed the decision of the Judge of Workers' Compensation, finding liability against the subsequent employer for an alleged occupational exposure in the matter of Zrno v. Wegmans, A-4025-07T1. The court in Zrno looked at the same factors as in the above matters, i.e. work duties, medical treatment, diagnostic studies and activity levels, in its analysis. However, the Appellate Division did not agree that the evidence supported a finding of a material worsening of the petitioner's condition or increased disability against the subsequent employer. Unlike Singletary, this petitioner did not undergo any significant treatment during the alleged occupational exposure. Furthermore, the petitioner's level of activity had actually improved from the time of the specific incident to the time following the alleged occupational exposure. The court demonstrated again that complaints of pain are not enough to prove a material worsening of one's condition.

Specific Accident Claim Followed By Another Specific Accident Claim

Where a petitioner sustains a specific injury and later files a claim alleging a specific injury to the same body part, the Baijnath analysis applies. Similar to the Peterson analysis discussed above, the issue in a Baijnath analysis is whether there is any objective proof of worsening since the initial injury or, in other words, whether both incidents combined to cause the petitioner's disability. If so, the court may equitably apportion liability for the overall permanency. Practically speaking, the parties generally will agree to resolve the first specific claim by way of an Order Approving Settlement with Dismissal Pursuant to Section 20 with an Order Approving Settlement as to the subsequent claim where there is no permanency opinion before the subsequent claim. The reason for this is that the petitioner has a difficult time proving the levels of disability between the two incidents. If there is a permanency opinion after the first injury but before the second injury, there generally will be two separate awards of disability. However, if the petitioner is unable to prove an objective worsening, arguably there would be no liability for the subsequent accident. These incidents may be deemed an innocent aggravation or a de minimis injury.

If during your investigation you should determine that you did not provide coverage during employment or for the employer at all, a recent directive from the Division may expedite your dismissal from the claim. Specifically, Division Director and Chief Judge Calderone sent down a directive on March 12, 2010, outlining the new procedures for handling dismissals for lack of coverage where there is no coverage; issues of policy cancellation and non-renewal are excluded. In this memo, Judge Calderone acknowledges that respondents should not have to prove a negative where no coverage was ever provided to the employer or to the employer during the alleged period of employment. Accordingly, Orders of Dismissal should be entered without the need for the formal filing of a Motion to Dismiss for Lack of Coverage. Furthermore, dismissals should not be delayed pending filing of an Answer by another carrier. While indicating that it would be helpful for respondents to provide NJCRIB as proof of coverage by another, the memo does not indicate that this action is required. However, the memo does indicate that a petitioner must provide some sufficient basis for keeping a carrier in a claim if there is an objection to the dismissal. Judge Calderone reasons that such dismissals for lack of coverage are without prejudice, permitting the party to be brought back into the claim should new information establish that the dismissed carrier is the correct carrier.

*Angela, an associate and member of our Workers' Compensation Department, works in our Cherry Hill, New Jersey, office. She can be reached at (856) 414-6409 or aydemary@mdwcg.com.

Defense Digest, Vol. 16, No. 2, June 2010