On appeal from the Division of Workers' Compensation.
Michels, Skillman and Landau. The opinion of the court was delivered by Michels, P.J.A.D.
Petitioner-employee Frederick Amorosa appeals from a post-judgment order of the Division of Workers' Compensation (Division) denying his motion for interest pursuant to N.J.S.A. 34:15-28 and a penalty and legal fees pursuant to N.J.S.A. 34:15-28.1 on a judgment he recovered in the Division against respondent-employer Jersey City Welding & Machine Works (incorrectly referred to as J.C. Welding Co.).
The facts necessary to resolve the issues raised on appeal are not in dispute. On June 6, 1979, after working for respondent for 34 years, petitioner terminated his employment because of occupational injuries and a work-related heart attack. On March 19, 1981, petitioner filed a claim against respondent for workers' compensation benefits. On January 29, 1985, following a contested hearing, the Judge of Compensation (Judge) awarded petitioner (1) temporary disability benefits for the period of June 8, 1979 to December 7, 1979, at the rate of $156
per week for a total of $4,056; (2) compensation benefits for 100% of total permanent disability for his occupational injuries and the work-related heart attack in the total sum of $70,200; and (3) an allowance for future medical treatment and medication for these conditions. Respondent did not appeal from that judgment.
Despite petitioner's numerous demands, respondent failed to remit the payments mandated by the judgment. Consequently, on April 22, 1985, petitioner filed a motion for the award of interest pursuant to N.J.S.A. 34:15-28 and the imposition of a penalty and legal fees pursuant to N.J.S.A. 34:15-28.1. Respondent did not file any responsive papers. On May 29, 1985, 120 days after the entry of the judgment and prior to the Judge hearing the motion, respondent paid petitioner the moneys due under the judgment. At the June 26, 1985 hearing, respondent offered no explanation for the delay in making payment. Nonetheless, the Judge declined to award petitioner interest on the judgment. The Judge reasoned that because respondent had viable defenses, the 45-day period for the appeal had to be subtracted from the 120 days between the date of the judgment and the date of payment thereof to determine whether the three-month threshold for awarding interest under N.J.S.A. 34:15-28 had been met. He also suggested that it might be appropriate to subtract the 30-day statutory period referred to in N.J.S.A. 34:15-28.1 from the 120 days when calculating the actual time that payment was withheld. Without stating which method of tabulation he relied upon, the Judge decided that the delay in payment was not unreasonable given the prevailing practice in the New Jersey insurance industry of taking from three to ten weeks to pay even settled judgments.
Similarly, the Judge held that the sanctions authorized by N.J.S.A. 34:15-28.1 should not be imposed in this instance. The Judge concluded that the statute applies "only to the unreasonable or negligent delay or refusal to pay temporary compensation," not to a case "fully litigated in which there are viable defenses." The Judge also determined that the delay in payment
was not "unduly unreasonable" because there was a question as to whether sufficient facts had been presented to establish medical causation. This appeal followed.
The Award of Interest Under N.J.S.A. 34:15-28
The power or authority of a Judge in the Division to award interest on a judgment is found in N.J.S.A. 34:15-28. This provision, which appears to be "the only reference to interest in the [Workers' Compensation Act]," Cohrs v. Igoe Brothers, Inc., 71 N.J. Super. 435, 447 (App.Div.1962); Simon v. N.J. Asphalt & Paving Co., 123 N.J.L. 232, 234 (Sup.Ct.1939), reads as follows:
Whenever lawful compensation shall have been withheld from an injured employee or dependents for a term of three months or more, simple interest on each weekly payment at five per cent per annum for the period of delay of each payment may, at the discretion of the bureau, be ...