On appeal from the State of New Jersey Department of Labor, Division of Workers' Compensation, CP 2002-38893.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Carchman, R. B. Coleman and Simonelli.
Appellant Continental Casualty Company (CNA) appeals and Omni Financial Services, Inc., t/a OmniStaff (Omni) cross-appeals from two orders of the Division of Workers' Compensation entered on August 30, 2007. One of the orders determined that petitioner Matthew Rader was jointly employed by Quality Medical Transport, Inc. (QMT) and Omni, and Omni's affiliates, subsidiaries and related entities. That order further determined that Omni and its affiliates, subsidiaries and related entities were insured by CNA and that CNA was liable for payment of medical and disability benefits to Rader and for attorneys' fees and costs incurred by Rader and QMT.*fn1 The second order dismissed claims asserted against the State of New Jersey Uninsured Employers Fund. For the reasons that follow, we affirm both orders, except that we remand for a modification of the first order to delete references to Omni's affiliates, subsidiaries and related entities.
This matter arises from a workers' compensation claim petition filed by Matthew Rader, who was injured on May 2, 2002, when he fell down three flights of stairs while performing his job as an emergency medical technician (EMT) in the employ of QMT. No one denies that this was a compensable injury. The question before us, however, is whether the judge of compensation correctly found that Omni was QMT's professional employment organization (PEO), pursuant to N.J.S.A. 34:8-67 to -79, at the time of Rader's injury and, thus, a co-employer.*fn2
All parties agree that Rader was employed by QMT at the time of his injuries. CNA and Omni both acknowledge further that Omni was a PEO for QMT in 2001 when Rader's employment with QMT commenced, however, both contend that Omni was not the PEO at the time of Rader's injury. Instead, they contend that American Labor Force (ALF), an affiliate or subsidiary of Omni, was QMT's PEO at that time. Significantly, neither QMT nor ALF maintained workers' compensation insurance at that time.
Rader's relevant employment history began on September 2, 2001, when he completed a W-4 form listing "Omni Financial Services" as his employer. At the same time, he submitted his application for employment with "OmniStaff," located at Woodland Falls Corporate Park, Suite 110, 200 East Lake Drive, Cherry Hill. That same day, he signed a form entitled "Quality Medical Transport, Inc. Policy and Procedures." Rader was subsequently assigned as an EMT in the employ of QMT. Omni undertook, at least initially, to manage QMT's payroll, to withhold taxes, and to provide workers' compensation insurance for QMT's employees.*fn3
Salvatore Murante, the Operations Manager for QMT processed Rader's application for a position with Omni. He testified that he explained to Rader that he would be employed by Omni and leased back to QMT, and that Omni would mail employee paychecks to QMT for distribution.
Anne Mazzei was the president of QMT. She testified that she was also an employee of Omni, as were all of QMT's employees. At the time of her testimony in July 2006, Mazzei was employed by T. Jax, but in 2002, she was an employee of Omni. Over the years, the name of the companies kept changing. They included Omni, America's Labor Force and Cura Group. According to Mazzei, QMT would pay the Omni Group every week, and the Omni Group was to obtain workers' compensation coverage for the employees. As she recalled, the employees' paychecks would come from Omni, but QMT was listed at the top of the paycheck stubs.
Ms. Mazzei's husband, Richard, co-founded QMT, with her. Mr. Mazzei negotiated the service agreement between QMT and Omni. He explained his objective and rationale as follows:
A. We were negotiating for Omni Staff to take over our employee responsibilities and also to supply us with Workers' Compensation insurance, and the reason for that was simply that we were led to believe that going through any company like Omni Staff, we would get a better rate on the Workers' Compensation premium, simply because they were able to go to the Workers' Compensation carrier and say we have X amount of people, maybe 5,000, or 10,000 or 2,000 as opposed to the 80 or 100 or so that worked for us, and thereby, getting a much better rate. In addition to that, the other benefit was that if you deal directly with a Workers' Compensation carrier, they want a very substantial money -- amount of money up front and then at the end of the year they come in for an audit and they want an additional substantial amount of money.
Using this type of a program, which has become commonplace, you have the benefit of paying exactly what you owe weekly, so, it's a pay as you go thing, and there's no audit at the end of the year. So, these were very desirable concepts and that's why we were interested in it.
According to Mr. Mazzei, their negotiations resulted in an agreement, which was reflected in one of the proposed service agreements identified for the record. He testified, however, that he was not able to locate a signed copy of the agreement. He recounted that QMT paid OmniStaff for workers' compensation insurance, and they were given standard certificates of insurance as proof of insurance. From the start of its relationship with the Omni Group until 2004, QMT continually made payments for workers' compensation insurance, and at all times, Mr. Mazzei believed that the Omni companies were obtaining such insurance for QMT's employees.
It is not disputed that prior to and on the date of Rader's compensable accident, May 2, 2002, Omni had obtained a workers' compensation policy from CNA. That policy, issued on September 19, 2001, covered a policy period of August 11, 2001 to August 11, 2002. QMT was not a named Insured under that policy, and although Omni and ALF had common ownership and shared the same address, the only Insured under the policy CNA issued was Omni. CNA stresses that neither QMT nor ALF is a named Insured, and there are no endorsements naming either QMT or ALF as an Additional Insured.
Mazzei reported Rader's accident on a form bearing a caption "America's PEO and OmniStaff Incident Investigation Form[.]" Richard Mazzei testified that he forwarded the ...