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What's Hot in Workers' Comp

The Appellate Division reverses and vacates workers’ compensation order on a statute of limitations issue.

Servais v. Ocean Wholesale Nursery, LLC, No. A-2988-20 (App. Div. Jul. 14, 2022)

September 1, 2022

by Kiara K. Hartwell

The Appellate Division reversed the Workers’ Compensation Judge’s order denying the motion to dismiss and vacated the final judgment. On January 31, 2017 , the parties entered into a “Confidential Settlement Agreement and General Release” (“the Agreement”). The petitioner received $5,000 to enter into this agreement in order to release the defendant from any and all claims. However, there was an exceptions section which did not affect or limit certain claims, including under the Workers’ Compensation Law.

On October 17, 2018, the petitioner filed a claim petition for a January 26, 2016, incident, which occurred more than two years and eight months before the filing. On January 18, 2019, the defendant filed a motion to dismiss for failure to file within the two-year statutory period and asserted there was no limitations under the Agreement and that the petitioner was an independent contractor. The petitioner opposed the motion, arguing his claim was timely as he filed it within two years of executing the Agreement and that he was “misled” into believing the payment of $5,000 was toward his workers’ compensation claim. However, he did not provide an affidavit or certification about any misleading statements and only relied on the supposedly ambiguous language of the Agreement.

The judge then heard the petitioner, the defendant’s owner and the defendant’s former general manager, but never made a finding about whether the Agreement was ambiguous. Testimony was limited to the agreement as well as the dates when it was signed and the petitioner was paid. Subsequently, the judge placed a decision on the record, denying the defendant’s motion. The judge found that, since the defendant’s attorney prepared the Agreement, any ambiguity should be constructed against the defendant. He held the $5,000 payment extended the statute of limitations as it included the petitioner’s current claim. And although the hearing was limited to the Agreement and statute of limitations issue, the judge found the petitioner was an employee and that the injuries arose out of and in the course of employment.

Subsequently, the parties moved to a trial on the injuries and permanency on the petitioner’s testimony and expert reports. The judge then found permanency, awarded the petitioner $75,516 and found the $5,000 payment included $1,000 for the loss of the petitioner’s fingers, with no explanation. The defendant moved to stay the judgment pending appeal, arguing the judge erred in extending the statute of limitations, deciding issues of employment and compensability, and in assessing $1,000 of the $5,000 payment toward the workers’ compensation case. The judge denied the motion.

The defendant appealed, asserting the judge erred by misconstruing the $5,000 payment as a workers’ compensation payment, for violating the defendant’s due-process rights without a proper trial and for arbitrarily apportioning $1,000 as a work injury payment. The Appellate Division reviewed the Agreement de novo and found there was no ambiguity expressly excluding the petitioner’s workers’ compensation claim. Rather, the petitioner’s opposition was solely based on the alleged ambiguity of the Agreement, not any other circumstances that might extent the statute of limitations.

The Appellate Division found the judge erred in finding the Agreement ambiguous and that he could not assume an agreement included all claims when there was specific exceptions noted. In addition, the judge’s finding that $1,000 of the $5,000 payment was for the loss of fingers had no basis in evidence. The Appellate Division noted the petitioner expressly reserved his right to file a workers’ compensation claim under the Agreement, but that he failed to do so timely. The Agreement was not related to any work-related injury and did not toll the two-year statute of limitations. As such, the Appellate Division reversed the order denying the motion to dismiss and vacated the final judgment.

 

What’s Hot in Workers’ Comp, Vol. 26, No. 9, September 2022 is prepared by Marshall Dennehey 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. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2022 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

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In this case, the claimant sustained a work injury of January 6, 1994, which was acknowledged by Notice of Compensation Payable (NCP). After the claimant’s receipt of 104 weeks of temporary total disability benefits, the employer filed a Request for an Impairment Rating Examination (IRE). The IRE was performed in May 2023 and the IRE physician found that the claimant had a 5% whole person impairment, under the AMA Guides. The employer filed a Petition based on the IRE results, and the Petition was granted by the WCJ. During litigation, the claimant argued that the IRE provisions of Act 111 (Section 306(a.3) of the Act) were not applicable to her injury, since it predated June 24, 1996, the date Act 57 went into effect, and that the IRE provisions were unconstitutional. The Workers’ Compensation Judge (WCJ)) granted the Petition and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that Act 111 violated the nondelegation doctrine and that its retroactive application to the claimant’s injury was unconstitutional. The court rejected the arguments on the basis that they had already found the same arguments without merit in multiple, prior cases. The court also addressed an argument made by the claimant that Act 111 was procedurally defective under the Pennsylvania Constitution because it was only considered on two days in each House after having undergone amendments and reassignments. The court noted that the Pennsylvania Constitution requires every bill to be considered on three different days in each House. The claimant maintained that, according to the legislative history, the bill did not receive three separate days of consideration from each House when it was assigned a new bill number. The court pointed out, however, that the bill number, H.B. 1840 remained constant and was considered on three occasions by the House. Further, the court concluded that minor amendments to the bill were germane to its original subject, which was to modify the Act’s IRE process, in accordance with Protz II.

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