What Did You Know and When? The Latest Analysis of the “Discovery Rule” Exception to the Statue of Limitations Defense

Defense Digest, Vol. 22, No. 3, September 2016

By Robert J. Fitzgerald, Esq.*

In Teague v. Palermo Brothers Masonry, 2016 N.J.Super. Unpub. LEXIS 1135 (N.J.Super.Ct. App.Div. May 17, 2017), the New Jersey Appellate Division addressed the statute of limitations defense in workers’ compensation occupational disease claims.

In 1984, Teague began working as a mason, and in 2004 he began to experience back problems. In 2005 and 2006, Teague took time off from working because of significant pain in his back. He received treatment after a March 8, 2005, MRI study revealed a disc bulge at L3-L4 and L5-S1 with a disc herniation at L4-L5.

Teague had been a mason with Palermo Brothers Masonry (Palermo) from May 2010 through September 15, 2010. During his employment with Palermo, Teague worked seven hours and twenty minutes per day. He was assigned to a couple of jobs at Shore Memorial Hospital, which required him to erect walls using cement blocks while working from a scaffold, after which he again experienced significant back pain. Due to his physical limitations, Teague never returned to work as a mason after September 15, 2010.

Dr. James Lowe evaluated Teague on July 18, 2012, and reviewed a July 10, 2012, MRI and compared it with the March 8, 2005, MRI study. Dr. Lowe concluded there was a new disc protrusion at L3-L4, increased disc herniation at L4-L5 and a new herniation or bulging at L1-L2. Dr. Lowe also concluded that Teague’s symptoms and diagnosis were causally related to “the occupational exposure described at Shore Memorial Hospital in 2010.”

Teague filed a workers’ compensation occupational exposure claim on August 29, 2012. Palermo filed an answer denying the claim and also raised the two-year statute of limitations defense. The trial took place from October 3, 2014, through January 16, 2015. Palermo did not raise the statute of limitations defense in the pretrial memorandum, or at any time during trial. The judge heard testimony from Teague, as well as John L. Gaffney, D.O., on behalf of Teague, and Francis C. Meeteer, D.O., on behalf of Palermo. As a result of Palermo’s stipulation to causation in the February 1, 2013, order, the sole issue tried before the judge was the nature and extent of permanent injury, if any, as it related to his work for Palermo.

Dr. Gaffney testified that he diagnosed Teague with multi-level disc pathology in the lumbar spine and that Teague suffered from 52.5% permanent partial disability arising from the period of occupational exposure during his employment with Palermo. Dr. Meeteer opined that Teague suffered from 7.5% permanent partial disability. Contrary to Palermo’s stipulation to causation, Dr. Meeteer testified that Teague’s condition was not caused by occupational exposure while working for Palermo.

On March 13, 2015, the judge of compensation entered an order in favor of Teague. In an oral opinion of the same date, the judge held that Teague sustained a compensable occupational disease and suffered a 40% whole person impairment related to his occupation with Palermo with a 12.5% pre-existing permanent disability.

In its appeal, Palermo argued the defense of the two-year statute of limitations; specifically, Teague did not file his claim petition until August 2012, more than two years after he knew his work activities caused back pain (May or June of 2010), which, therefore, required dismissal of his claim petition. The Appellate Division rejected that argument, citing several cases for the proposition that the statute of limitations does not begin to run until the petitioner knew, or should have known, that the medical condition was work-related. Here, Teague did not know his condition was work-related until he was evaluated by Dr. Lowe on July 18, 2012, a date within two years of the filing of the claim. The Appellate Division went on to affirm the decision, finding no other basis to overturn the permanency determination.

Teague highlights the “discovery rule” exception to the statute of limitations defense. Although the causal connection between the petitioner’s job duties and resultant back pain seemed obvious in 2004 and 2005, when he first sought medical treatment, the court applied a liberal interpretation of the “discovery rule” so as to allow an occupational exposure claim to proceed. As a respondent, it is very important to do a thorough job of investigating a petitioner’s medical history to determine other possible causes for a work injury, as well as to establish the timing of the petitioner’s knowledge of his or her condition. Maintaining complete personnel files and leave request documentation for employees are a few ways an employer can help investigate a workers’ compensation occupational exposure claim. Be especially aware of maintaining this documentation ahead of facility changes/closures or when an employee is planning to retire, which usually trigger an uptick in occupational claims. Contact your defense counsel for more suggestions in better preparing for these anticipated claims.

*Bob is a shareholder in our Cherry Hill, New Jersey office. He can be reached at 856.414.6009 or rjfitzgerald@mdwcg.com.

_{Defense Digest, Vol. 22, No. 3, September 2016. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2016 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}