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Lee v. Warehousing

Decided: October 4, 1985.

JOHN W. LEE, PETITIONER-RESPONDENT,
v.
W. S. STEEL WAREHOUSING, RESPONDENT-APPELLANT



On appeal from the Division of Workers' Compensation.

Pressler, Dreier and Bilder. The opinion of the court was delivered by Pressler, P.J.A.D.

Pressler

Among the recurring interpretive problems raised by the 1979 revision of the Workers' Compensation Act, N.J.S.A. 34:15-1 to -128, was the question of how compensation should be calculated when an employee sustains multiple injuries in a single, compensable accident. The controversy as to whether N.J.S.A. 34:15-12(c), as amended by L. 1979, c. 283, ยง 5, mandated "stacked" or separately calculated benefits was finally resolved by the Supreme Court in Poswiatowski v. Standard Chlorine Chemical Co., 96 N.J. 321, 334-335 (1984), which held that "the weeks of compensation awarded for one accident's multiple injuries that establish a single compensable disability should be cumulated, not separated, in computing the award." Recognizing that some compensation judges had construed the statute as requiring separate rather than stacked computation of benefits, the Director of the Division of Workers' Compensation issued a memorandum to all compensation judges on June 6, 1984, less than two weeks after Poswiatowski was decided. The memorandum instructed them that prior judgments and orders approving settlements entered inconsistently with Poswiatowski should be regarded as having been erroneously computed and accordingly that such judgments and orders "should be amended upon application to conform with the ruling of the Supreme Court and to correct the mistake." The question before us is whether implementation of the directive contravenes applicable law and principle respecting the finality of administrative agency judgments. We hold that it does not.

Petitioner John W. Lee lost three fingers of his right hand in an industrial accident which occurred on September 30, 1980. By judgment entered on May 18, 1983, his permanent disability

was determined to be 50% of the statutory right hand for which he was awarded 122.5 weeks resulting in scheduled compensation of $6,176.50 and an additional 10% permanent partial total for the "orthopedic, neurologic, cosmetic and neuropsychiatric residuals of the traumatic amputation of the statutory 1st, 2nd and 3rd fingers of the right hand with resultant deformity, weakness and atrophy with an accompanying psychoneurosis and an anxiety reaction." This 10% resulted in an additional 60 weeks of scheduled compensation yielding an additional $2,820.00. The total award, computed by adding these two sums, was $8,996.50. Petitioner did not appeal, even though he would have been entitled, had the award been cumulatively calculated, to the weekly rate for 182.5 weeks, namely, 35% of the statewide average weekly wages, or $86 per week for a total award for permanent disability of $15,695.00. See N.J.S.A. 34:15-12(c). And see Poswiatowski, supra, 96 N.J. at 324 n. 1, explaining the methodology by which the amount of the weekly rate is increased proportionally to the number of weeks awarded.

On June 18, 1984, some thirteen months after entry of the judgment but only twelve days after the Director's memorandum, petitioner's attorney wrote to the compensation judge requesting that in compliance with the memorandum an amended form of judgment be entered recalculating the award in accordance with Poswiatowski. A copy of the request was sent to respondent's attorney. On July 3, 1983, the judge granted this request, explaining that he was doing so in conformance with the directive and on his own motion.*fn1 A conforming amended judgment was accordingly entered increasing petitioner's award to $15,695.00.

In appealing from the entry of the amended judgment, respondent concedes that the Division of Workers' Compensation has the inherent power, parallel to that of the courts, to reopen its own judgments on equitable grounds in the interests of justice. That proposition is indeed a well-settled principle of administrative law regularly applied to judgments of the Division of Workers' Compensation. See, e.g., Beese v. First National Stores, 52 N.J. 196, 200 (1968); Conway v. Mister Softee, Inc., 51 N.J. 254, 260 (1968); Estelle v. Board of Education of Red Bank, 14 N.J. 256, 261 (1954); Camp v. Lockheed Electronics, Inc., 178 N.J. Super. 535, 545 (App.Div.1981), certif. den. 87 N.J. 415 (1981); Hyman v. Essex Cty. Carpet Cleaning Co., 157 N.J. Super. 510, 516 (App.Div.1978); V. v. Long Branch Sewerage Auth., 86 N.J. Super. 56, 60 (App.Div.1964); Eclipse, etc., Bendix Aviation Corp. v. Minter, 35 N.J. Super. 430, 437-438 (App.Div.1955); Stone v. Dugan Brothers of N.J., 1 N.J. Super. 13, 17-18 (App.Div.1948). And see Wunschel v. City of Jersey City, 96 N.J. 651, 669 (1984). Respondent's thesis, rather, is that the Division's power to reopen its judgments is congruent with that of the courts as circumscribed by R. 4:50 and that a proper application of that rule forecloses the relief here granted by the Division. We disagree.

We are satisfied that the amendment of this judgment accorded both with the equitable principles underlying the court rule and with the rule's substantive and procedural qualifications. R. 4:50-1(a) permits relief from judgment on the ground of mistake, inadvertence, surprise, or excusable neglect. R. 4:50-1(f) permits relief from judgment for "any other reason justifying relief from the operation of the judgment or order." An application pursuant to paragraph (a) is required to be made within one year after entry of the challenged judgment. An application pursuant to paragraph (f) need only be made within a reasonable time thereafter, reasonableness being dependent upon the totality of the circumstances. See R. 4:50-2. Respondent argues that relief was improvidently granted under paragraph

(a) because an application was not made within a year from the date of the judgment. It argues further that neither the "mistake" provision of paragraph (a) nor the "other reason" provision of paragraph (f) comprehends relief from a judgment which is based upon a statutory interpretation reasonable in its face and widely concurred in but subsequently held by the Supreme Court in different litigation to have been incorrect. In short, its position is that Poswiatowski merely constituted a change in the substantive law beyond the remedial reach of R. 4:50-1(f). There is some superficial merit in this argument. See, e.g., Hartford Ins. Co. v. Allstate Ins. Co., 68 N.J. 430 (1975).

In our view, however, the flaw in respondent's argument is its failure to take into account the circumstantial breadth of paragraph (f). Justice Francis explained in Court Invest. ...


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