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Cruz v. Central Jersey Landscaping

June 9, 2008

LUZ M. CRUZ, PETITIONER-RESPONDENT,
v.
CENTRAL JERSEY LANDSCAPING, INC., RESPONDENT-APPELLANT.
VALENTYNA HOHL, PETITIONER-RESPONDENT,
v.
INSULATED DUCT & CABLE CO., RESPONDENT-APPELLANT.
AUDREY BUSH, PETITIONER-RESPONDENT,
v.
KAUFFMAN & MINTEER, INC., RESPONDENT-APPELLANT.
RUTH A. HERZER, PETITIONER-RESPONDENT,
v.
CLASSIC CARS NISSAN, INC., RESPONDENT-APPELLANT.



On appeal from the Superior Court, Appellate Division, whose opinion is reported at 393 N.J. Super. 34 (2007).

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

In this matter, the Court considers four consolidated appeals that raise the question of whether the Legislature's 2004 amendment to the schedule of workers' compensation death benefits was intended to be applied retroactively.

Prior to the 2004 amendments, the Workers' Compensation Act, N.J.S.A. 34:15-1 to -142 (the Act), set forth a schedule of benefits that applied to all claims arising from the death of a worker. That schedule provided for benefits that varied depending upon the number of the deceased workers' surviving dependents. The rates began at fifty percent of the decedent's wages if he or she were survived by one dependent, and increased with the number of additional dependents up to a ceiling of seventy percent of wages if there were five or more dependents. In 2004, the Legislature amended the statute and replaced the tiered system of benefits with a flat rate of seventy percent of decedent's wages, to be payable regardless of whether a deceased worker was survived by one or more dependents.

There is no dispute that these four claimants are entitled to death benefits payable under the Act. The sole issue is whether they are entitled to benefits at the amended flat rate of seventy percent of each decedent's gross wages or only to the pre-amendment graduated-tier benefits based on the number of each decedent's dependents. In two of these matters, the Workers' Compensation judge concluded that the amendment was entitled to prospective application only. In the other two matters, a different judge of compensation reached the opposite conclusion, determining that claimants were entitled to an increase in the rate of their benefits as of the effective date of the amendment, even if a final award had already been entered based on the rate schedule previously in effect.

The four matters were consolidated for purposes of appeal. Cruz v. Cen. Jersey Landscaping, Inc., 393 N.J. Super. 34 (App. Div. 2007). The Appellate Division, in a split decision, determined that the amendment to the Act that created a uniform rate for death benefits was entitled to retroactive application. The majority of the panel reasoned that because the Legislature did not explicitly limit the amendment to future claims, the new rate was intended to apply retroactively to claims accruing prior to the amendment's January 14, 2004, effective date. Although recognizing that employers had a significant interest in making only the lower death benefit payments, the majority concluded that the employers' interest was not a vested right and that increasing payments did not result in a manifest injustice. The dissenting judge disagreed. He explained that because the Legislature neither explicitly nor implicitly demonstrated an intent to apply the amendment retroactively, in light of the general principle that a statute takes effect as of the time it goes into effect, and the general principle that statutes should not be applied retroactively, he was convinced that the amendment does not apply retroactively. Because of the dissent, these four consolidated cases have come before us on appeal as of right.

HELD: The 2004 amendment to the schedule of workers' compensation benefits is to be applied prospectively. The higher benefits established by the amendment are to be awarded to claimants whose decedents died on or after the effective date of the amendment.

1. New Jersey's statutory scheme of workers' compensation coverage is remedial social legislation and should be given liberal construction in order that its beneficent purposes may be accomplished. In determining the effect to be given the 2004 amendments to the statute, the Court's essential task is to understand and give effect to the intent of the Legislature. The Court looks first to the plain language of the amendment, seeking further guidance only to the extent that the Legislature's intent cannot be derived from that analysis. The amended version of the statute provides: "Except as hereinafter provided, in case of death, compensation shall be computed, but not distributed, on the following basis: a. for one or more dependents, [seventy percent] of wages." N.J.S.A. 34:15-13. The subsections that had previously set forth the tiered schedule based on the number of dependents were deleted. The amendments, enacted on January 14, 2004, were specifically designed to "take effect immediately." (pp. 10-15)

2. The Court has long followed a general rule of statutory construction that favors prospective application of statutes. This preference is based on long-held notions of fairness and due process. Although the rule favoring prospectivity is a sound rule of statutory interpretation, if the Legislature expresses an intent that the statute is to be applied retroactively, the statute should be so applied. Consequently, the preference for prospective application is not applied mechanistically to every case. Retroactivity is appropriate when it is expressed, when an amendment is curative, or when the expectations of the parties so warrant. (pp. 15-18)

3. Long before the Legislature enacted the amendment altering the benefit rates, this Court held that a claim for death benefits accrues, and the rights thereto vest, on the date of death. The Court presumes that the Legislature is aware of judicial construction of legislative enactments, and the Court reviews the amendment in light of its prior reasoning regarding the dates for accrual of claims and vesting of rights. There is little in the way of legislative history that informs the Court about the meaning and intent of the 2004 amendment. There is nothing in the amendments or in the sponsor's statements that suggests that the Legislature intended to give the new benefit level retroactive effect of any kind. The Court certainly sees no basis in the legislative history, and in an interpretive framework that includes the Court's prior holding that vesting occurs on the date of death, to conclude that the Legislature intended to effect a reopening of settled awards. And, the directive that the act "shall take effect immediately" bespeaks an intent contrary to, and not supportive of, retroactive application. The Court derives additional support for the conclusion that the Legislature intended only a prospective application of the new benefit rates from the fiscal note that accompanied the bill. The fiscal note contains no analysis of the impact an amendment would have regarding an increase in the benefits payable on existing or previously settled claims. The Court reaches this result for a further, more practical reason. If the amendment is interpreted to apply broadly, it would reach even beyond pending and non-finalized claims. That would raise the specter that all of the awards that have been entered in years past would be reopened to permit an increase in benefits as of January 14, 2004. In the absence of an unambiguous directive that the Legislature so intended, the Court cannot conclude that the amendment was expected to be applied in such an expansive fashion. (pp. 18-21)

The judgment of the Appellate division is REVERSED.

CHIEF JUSTICE RABNER and JUSTICES LONG, ALBIN, WALLACE, and RIVERA-SOTO join in JUSTICE HOENS' opinion. JUSTICE LaVECCHIA did not participate.

The opinion of the court was delivered by: Justice Hoens

Argued February 20, 2008

In this matter, we consider four consolidated appeals that raise the question of whether the Legislature's 2004 amendment to the schedule of workers' compensation death benefits was intended to be applied retroactively. In two of these matters, the Workers' Compensation judge concluded that the amendment was entitled to prospective application only, with the result that both of those claimants were denied an increase in benefits, which they sought to be calculated from the effective date of the amendment. In the other two matters, a different Workers' Compensation judge reached the opposite conclusion, determining that claimants were entitled to an increase in the rate of their benefits as of the effective date of the amendment, even if a final award had already been entered based on the rate schedule previously in effect.

The four separate matters were consolidated for consideration in the Appellate Division, where a divided panel found the arguments in favor of retroactivity more persuasive than those in favor of prospective application. However, one member of the appellate panel dissented, which brings the dispute before this Court on appeal as of right. Because the record demonstrates that the Legislature neither expressly stated, nor implicitly made known, its intention to have the increased benefit levels apply retroactively, we reverse.

I.

Prior to the enactment of the 2004 amendments, the Workers' Compensation Act, N.J.S.A. 34:15-1 to -142 (the Act), set forth a schedule of benefits that applied to all claims arising from the death of a worker. That schedule provided for benefits that varied depending upon the number of the deceased worker's surviving dependents. The benefit rates began at fifty percent of the decedent's wages if he or she were survived by one dependent, and increased with the number of additional dependents up to a ceiling of seventy percent of wages if there were five or more dependents. N.J.S.A. 34:15-13(a) to -13(e) (2003), amended by L. 2003, c. 253, § 1. In 2004, the Legislature amended the statute and replaced the tiered system of benefits with a flat rate of seventy percent of the decedent's wages, to be payable regardless of whether a deceased worker was survived by one or more dependents. L. 2003, c. 253, § 1.

There is no dispute that each of the claimants is entitled to death benefits payable under the Act. The sole issue is whether they are entitled to benefits at the amended flat rate of seventy percent of each decedent's gross wages or only to the pre-amendment graduated-tier benefits based on the number of each decedent's dependents. We begin, then, with a recitation of the particular facts and the relevant procedural history of each of the matters before us on appeal.

A.

Cruz v. Central Jersey ...


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