On appeal from the Department of Labor, Division of Workers' Compensation, 2005-12511.
The opinion of the court was delivered by: C.L. Miniman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: November 5, 2007
Before Judges A.A. Rodríguez, Collester and C.L. Miniman.
Petitioner Aaliyah Nicole Alvarado appeals from that portion of the Workers' Compensation order limiting the award of fees to Alvarado's attorney on the ground that N.J.S.A. 34:15- 64(c) did not permit the Workers' Compensation judge to award more than $50. The judge also found that, even if there was an exception to that statute, respondent J & J Snack Foods Corp. (J & J), the employer of petitioner's decedent (her father, Rafael Alvarado, Jr.), acted in good faith and with reasonable diligence in the face of competing claims for benefits, which the respondent was not able to resolve by agreement of all parties. Because the judge incorrectly construed and applied the statute, we reverse.
Decedent was employed by J & J as a forklift operator. On April 12, 2005, Rafael died of injuries sustained at work as a result of a fall from a forklift. On April 27, 2005, a claim petition was filed on behalf of Aaliyah, born March 28, 2002, the youngest of his three natural-born minor daughters. Two months later Aaliyah's mother, Tanisha Velez, filed a pro se petition on her own behalf as the dependent domestic partner of Rafael. Tanisha and Aaliyah resided with Rafael prior to his death. Tanisha was unemployed and she and Aaliyah depended solely on Rafael for their support. Another claim petition was filed on June 28, 2005, on behalf of Rafael's two other daughters, Jazmine Alvarado, born January 21, 1991, and Melissa Alvarado, born September 25, 1993, by their guardian ad litem and mother, Kelly Negron.
J & J deemed Rafael's death compensable on June 9, 2005. It acknowledged its obligation to provide the seventy-percent dependent benefit rate in the amount of $430.18 per week to those persons who were Rafael's dependents but did not admit that Aaliyah and Tanisha were among them. Thereafter, Tanisha admitted in interrogatory answers that she and Rafael had never been married and stipulated on September 20, 2005, that she was not entitled to workers' compensation dependency benefits.
Although J & J tried to secure agreement between the guardians of Rafael's three daughters respecting a pro rata sharing of the total benefit, it was not able to do so in the months following Rafael's death. Aaliyah argued that Melissa and Jazmine, who did not live with Rafael, were only partially dependent on him to the extent of the $173 per week Rafael paid in child support. Aaliyah urged that the benefits should be shared in accordance with a formula approved in Ricciardi v. Damar Products Co., 45 N.J. 54 (1965).
With the proper allocation of benefits still unresolved twenty-five weeks after Rafael's death, J & J disbursed dependency benefits on October 6, 2005, in equal shares to Rafael's three daughters "pending a court order or agreement as between parties." J & J advised "that the continuing dependency benefits will be paid on a monthly basis until further notice by the court and/or information from the parties that there is agreement as to distribution pending court order." J & J specifically took no position on apportionment.
After negotiations, Aaliyah ultimately offered to settle the allocation by accepting one-half of the benefits with the balance payable to Melissa and Jazmine. They agreed.
On February 22, 2006, the petitioners notified J & J that they had agreed that Aaliyah would receive fifty percent of the dependency benefits and Melissa and Jazmine would each receive twenty-five percent. Aaliyah's total benefit through age eighteen would amount to $167,270 with additional sums if she enrolled in college and remained dependent. On February 27, 2006, Aaliyah asked J & J for a form of order to submit the following day when the parties were scheduled to appear in court.*fn1 Negotiations over the form of order ensued and on March 3, 2006, Aaliyah requested she be paid her full one-half share retroactive to April 12, 2005. On March 8, 2006, a proposed form of order was circulated. Aaliyah's attorney proposed changes to the form of order, including the allowance of counsel fees, $11,615 to be assessed against J & J and $7,743 against Aaliyah.
On July 25, 2006, counsel appeared before the compensation judge and argued Aaliyah's attorney-fee application. Prior to this time, there had been pretrial or status conferences scheduled on August 24, September 13, October 4, and December 6, 2005, as well as February 28 and March 21, 2006.*fn2 Because J & J made an offer to pay full dependency benefits within twenty-six weeks of Rafael's death, the judge concluded that the employer was entitled to the limitation on an attorney-fee award set forth in N.J.S.A. 34:15-64(c), which confines an award to twenty percent of the difference between the benefits offered and benefits awarded when an offer has been made within a reasonable time. The judge further found that he was limited to awarding $50 in attorney fees without regard to the amount of work done because J & J offered to pay full benefits and, thus, the benefits secured could not exceed the benefits offered. The judge also found that the investigation done by J & J was certainly reasonable and he opined that the three children should share equally in the dependency benefits.
Additional pretrial conferences took place on September 26 and October 17, 2006. Ultimately, the case was resolved at the last pretrial conference on December 19, 2006, when the compensation judge entered two final orders. One order was by consent with respect to the dependency claims, awarding fifty percent of the benefits to Aaliyah, and the other order memorialized the July 25, 2006, ruling on the counsel fee application of Aaliyah, awarding $50 to her attorney pursuant to N.J.S.A. 34:15-64(c). This appeal followed.
The fee statute in question permits a judge of compensation to award a reasonable attorney fee not exceeding twenty percent of the judgment. N.J.S.A. 34:15-64(a). It further provides:
A fee shall be allowed at the discretion of the judge of compensation when, in the official's judgment, the services of an attorney . . . are necessary for the proper presentation of the case. . . .
When, however, at a reasonable time, prior to any hearing compensation has been offered and the amount then due has been tendered in good faith or paid . . . within 26 weeks after employer's notification of the employee's death, the reasonable allowance for attorney fee shall be based upon only that part of the judgment or award in excess of the amount of compensation, theretofore offered, tendered in good faith or paid.
When the amount of the judgment, or when that part of the judgment or award in excess of compensation, offered, tendered in good faith or paid as aforesaid, is less than $200, an attorney fee may be allowed not in excess of $50. [N.J.S.A. 34:15-64(c).]
Aaliyah contends that her attorney was entitled to receive a reasonable fee for the services he provided between the preparation of her dependency petition in April 2005 and the entry of the final orders of December 19, 2006, and that J & J should pay eighty percent of the fee. She argues that mailing benefit checks on October 6, 2005, was not within a reasonable time after Rafael's death nor prior to a scheduled hearing as required. This is so, she argues, first because of various delays caused by J & J, such as its failure to contact its insurance carrier timely and to answer the petitions within ten days of receipt. Second, she argues that J & J did not act in good faith when it disputed Aaliyah's entitlement to dependency benefits in its answer to her petition. Third, she argues that there was no good faith reason to wait almost six months before payment was finally issued. Aaliyah also argues that the October 6, 2005, offer to pay benefits in equal shares was conditioned on a final order of the court and thus did not meet the requirements of our case law for an unconditional tender.
J & J, on the other hand, argues that the Legislature created a bright line, twenty-six weeks, for determining whether payments were made within a reasonable time and that this period is intended to permit the respondent to investigate the claims, including the claimants' status as dependents and the proper allocation of benefits. Having paid benefits prior to the expiration of twenty-six weeks, it claims that it is immune from any award of fees in excess of $50.
The standard for appellate review of a determination by a judge of compensation is equivalent to that used for review of any non-jury case. Brock v. Pub. Serv. Elec. & Gas Co., 149 N.J. 378, 383 (1997). We may not substitute our own fact-finding for that of the trial judge, even if we are inclined to do so. Lombardo v. Revlon, Inc., 328 N.J. Super. 484, 488 (App. Div. 2000). Rather, we will only decide "'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record,' considering 'the proofs as a whole.'" Close v. Kordulak Bros., 44 N.J. 589, 599 (1965) (citation omitted). In performing that function, we must give due weight to the compensation judge's "expertise in the field and his opportunity of hearing and seeing the witnesses." De Angelo v. Alsan Masons, Inc., 122 N.J. Super. 88, 89-90 (App. Div.), aff'd o.b., 62 N.J. 581 (1973). However, where the issue is a question of law, our review is de novo. Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.").
When first signed into law, our Workers' Compensation Act made no provision for legal fees. Haberberger v. Myer, 4 N.J. 116, 121 (1950) (citing L. 1911, c. 95). Various amendments starting in 1913 made allowance for fees, which to this day are entirely "dependent upon the meaning of the language" of N.J.S.A. 34:15-26 and -64. Id. at 121-22. In 1950 the statutory language provided "when, however, prior to any hearing compensation has been offered or paid, the reasonable allowance" was to be based upon the benefits obtained in excess of the offer. Id. at 121. The Court concluded that a respondent "may refrain from making an offer of settlement until immediately 'prior to any hearing' and thus diminish or entirely defeat the award of fees to a petitioner's attorney, despite the rendition of services in preparation of his client's case for hearing." Id. at 124. Because the making of policy was for the Legislature, the Court enforced the statute, observing that "[l]awyers who accept employment under statutes regulating the allowance of fees for their services do so subject to the provisions of such statutes." Id. at 125.
The Legislature then amended the statute in 1952 to preclude respondents from defeating awards of attorney fees with eleventh-hour offers to pay benefits. L. 1952, c. 318, § 1. We considered the Haberberger decision as instrumental in this amendment. Seitz v. The Singer Mfgr. Co., 36 N.J. Super. 546, 550 (App. Div. 1955). As amended, the statute provided "[w]hen, however, at a reasonable time, prior to any hearing compensation has been offered and the amount then due has been tendered in good faith or paid, the ...