January 20, 2010
K.S., PETITIONER-RESPONDENT/ CROSS-APPELLANT,
SUNNY DAYS EARLY CHILDHOOD SERVICES AS INSURED BY ALEA NORTH AMERICAN INSURANCE COMPANY, RESPONDENT-APPELLANT/ CROSS-RESPONDENT, AND SUNNY DAYS EARLY CHILDHOOD SERVICES AS INSURED BY THE NEW JERSEY GUARANTY ASSOCIATION, AND SUNNY DAYS EARLY CHILDHOOD CENTER, INCORPORATED, RESPONDENTS-RESPONDENTS.
On appeal from the Division of Workers' Compensation, Claims 2003-13786 and 2003-38560.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 16, 2009
Before Judges Rodríguez, Yannotti and Chambers.
Alea North American Insurance Company (Alea), as insurer for Sunny Days Early Childhood Developmental Services (Sunny Day Services), appeals from a judgment of the Division of Workers' Compensation, which found that K.S. sustained a work-related compensable injury, awarded K.S. temporary and permanent disability benefits and determined that Alea was entirely responsible for the payment of those benefits, as well as counsel fees and costs. K.S. has filed a cross-appeal from the judgment. For the reasons that follow, we reverse on the appeal and dismiss K.S.'s cross-appeal.
Sunny Days Early Childhood Center, Inc. (Sunny Days Center) and Sunny Days Services provide services to children with developmental delays. Sunny Days Center is a non-profit entity that provides services to children from birth to age three. Sunny Days Services is a for-profit entity that provides such services to children who are older than three years. Donna Maher (Maher) and Joyce Salsberg (Salsberg) are the owners of the Sunny Days companies. K.S. began working for the companies in August 1999.
K.S. testified that she served as the companies' chief financial officer. In that capacity, she was responsible for all of the companies' "financial records, statements, [and] financial documents." She also "handl[ed] all the insurance." In addition, K.S. was responsible for certain "human resource work," which included preparing the payroll every two weeks, reconciling the employees' 401K statements, tracking the employees' time off and ensuring that the employees' credentials were up to date. K.S. was not, however, involved in the hiring, firing or evaluating of employees other than those on the bookkeeping staff. K.S. also was responsible for the books and records of a real estate holding company for two buildings that Maher and Salsberg owned.
According to K.S., while she was working at Sunny Days, the companies "grew like topsy." She said that, at one point, the companies were providing services to between 400 and 575 children. In July or August 2001, Maher and Salsberg were planning to acquire an existing business in Long Island, New York, that employed fifty or one hundred employees. K.S. had to perform certain tasks, including working up cash flow projections and other financial information related to that acquisition.
K.S. testified that in September and October 2002, she told Maher and Salsberg that she "could not intelligently and responsibly handle" the work of the chief financial officer and human resources director for the companies. K.S. stated that she became very frustrated, angry, overwhelmed and concerned about her workload because "in [her] frenzy" to complete everything "[she] was starting to make some minor mistakes . . . and it caused [her] a lot of distress and anxiety[.]"
In December 2002, Maher and Salsberg put K.S. on probation. K.S. continued to handle the same workload but Maher and Salsberg gave K.S. permission to hire additional help. K.S. said that she "realized that [she] wasn't concentrating." She began to experience "panic attacks" and "stomach problems." She claimed that she "was functioning [like] a robot." K.S. stated that on morning of March 6, 2003, she woke up with what she described as "very tight bands around [her] head." She was experiencing "palpitations" and felt that her "heart was coming out of [her] chest."
K.S. went to see her primary care physician, Dr. Mark Gershenbaum (Gershenbaum), who had been treating her since 1994 for anxiety and elevated blood pressure. Gershenbaum provided K.S. with a note, indicating that she should remain out of work for several days. On March 17, 2003, Gershenbaum provided K.S. with another note, which stated that K.S. had "to be out of work indefinitely due to a work-related stress anxiety disorder."
That same day, K.S. advised Sunny Days' insurance agent that she intended to file a claim for workers' compensation benefits. She never returned to her position at Sunny Days. In November 2005, K.S. took a job as a clerk in a bookstore, and was working about twenty-five-and-one-half hours per week.
Maher disputed K.S.'s assertion that she was responsible for all of the financial documents for the companies. According to Maher, K.S. oversaw the work but it was done by the bookkeeping staff in each location. Maher explained that Sunny Days had a bookkeeper for its Pennsylvania operations and two full-time bookkeepers in New Jersey. Furthermore, in 2001, when Sunny Days began to operate in New York, a bookkeeper was hired for the New York office. In addition, in August 1999, Sunny Days hired Michael Rescino (Rescino) as an outside accountant to do the books and the company's audit.
Rescino testified that K.S.'s role was to perform "[b]asic controller-type activities" such a bank reconciliations, adjusting accounts, handling prepaid insurance accounts, and posting wage accruals at the end of an accounting period. Rescino explained that the companies did not want K.S. "to do any bookkeeping" but rather to oversee the bookkeeping work done by others.
Rescino further testified that K.S. "did a fine job in the beginning" but became unable to complete her work when the companies began to grow in 2002 and the work became more complex. He stated that K.S.'s office "was disorganized" and there were "piles of files and paper on her desk."
Maher said that, at the end of 2002, Rescino approached Maher and Salsberg and told them he was "very distressed" because he was preparing his year-end audits and discovered that "things were in shambles[.]" He noted that the bank and company accounts had not been reconciled, wage accruals had not been posted and building insurance had not been paid. Maher and Salsberg learned of other problems with K.S.'s job performance when she was out of the office.
On December 30, 2002, K.S. met with Maher, Salsberg and Rescino and they reviewed a list of her job duties and functions. They transferred responsibility for the payroll to another bookkeeper and hired an additional bookkeeper to assist K.S. on a part-time basis. K.S. stated that, after the meeting, she became concerned that she would be fired. Rescino testified that K.S.'s performance did not improve significantly thereafter.
At Rescino's suggestion, Maher and Salsberg hired Carl Ackerman (Ackerman), a certified public accountant, to come into the office one or two days a week to ensure that "everything was being done" the way it was supposed to be done. K.S. was not told, however, that Ackerman had been hired.
Ackerman's first day at Sunny Days' office was March 5, 2003. K.S. testified that Ackerman's presence raised her stress level "even more" because she was supposed to show him "what's going on" when she could not "handle the load" that she had. K.S. left the job the following day.
Gershenbaum testified that he treated K.S. for anxiety since 1994. He said that K.S. was "[v]ery functional" in that time but her anxiety increased significantly in October 2002. He said that K.S. was crying and not focusing. K.S. told Gershenbaum that her employers "kept increasing her workload" and the work had become "so overwhelming" that she could not concentrate well and was making mistakes.
Gershenbaum additionally testified that when K.S. came to see him on March 6, 2003, he told her to stay home from work for a few days. On March 17, 2003, he told her to stay out of work because he thought she was going to have a breakdown. Gershenbaum opined that his treatment and the psychotherapy that K.S. received was reasonable and necessary and had been caused by her work-related stress. He said that K.S.'s long history of psychological problems did not have anything to do with her condition on March 6, 2003.
K.S. also presented testimony from psychiatrist Paul J. Kiell (Kiell). Kiell stated that he examined K.S. in September 2005. He said K.S. was suffering from anxiety depression syndrome. He found her psychiatric disability to be forty percent of partial total. Kiell stated that the "competent cause" of K.S.'s disability "was the increased workload" at Sunny Days. Kiell accepted K.S.'s assertion that she had been given too much work for one person to handle.
Kiell further testified that he was unaware that Gershenbaum had treated K.S. from 1994 to 2002 for stress, depression, anxiety and high blood pressure. He was unaware that K.S. had been treated by a psychotherapist from 1992 to 1998 for anger, anxiety and depression. Kiell also was unaware that K.S. had been divorced twice, her second marriage was to an alcoholic, and her mother had a life-long history of psychiatric illness and K.S. was raped when she was fourteen years old.
Sunny Days presented expert testimony from psychiatrist David Scasta (Scasta), who first evaluated K.S. in September 2003. Scasta testified that K.S. did not provide him with complete information concerning her prior history of psychological problems and treatment. She also had denied any history of sexual abuse. Scasta diagnosed a residual fifteen percent of a relatively permanent partial psychiatric disability due to a recurrent major depressive disorder, of which five percent was attributable to work-related stress and ten percent to "a biological diathesis, a pre-existing history of depression, and a history of marital problems."
However, after Scasta had an opportunity to review Gershenbaum's treatment records, he issued a revised report and changed his diagnosis. Scasta learned that Gershenbaum had treated K.S. since December 1994 for depression and anxiety and K.S. had been sexually assaulted at age fourteen. Scasta also learned that K.S. had stress-related problems at a previous job.
Scasta determined that K.S. had "so much pre-existing" disability that her experience at Sunny Days only amounted to an aggravation. He changed his diagnosis to recurrent major depressive disorder and a generalized anxiety disorder constituting a twenty-five percent relatively permanent partial psychiatric disability, of which two-and-one-half percent was attributable to work-related stress at Sunny Days.
Scasta re-evaluated K.S. in 2006 and found her to be "much better emotionally[.]" Scasta noted that K.S. was working the maximum number of hours she could work while receiving social security disability payments. He determined that K.S. had a ten percent permanent psychiatric disability and attributed two-andone-half percent of that disability to her work at Sunny Days.
Sunny Days also presented testimony from psychiatrist Charles Semel (Semel), who first evaluated K.S. on December 16, 2003. Semel found "no current evidence of psychiatric illness, dysfunction, or disability." Semel testified that nothing in K.S.'s workplace history indicated that the conditions at Sunny Days were objectively stressful. He noted that when K.S.'s job performance faltered, her employers took steps to assist her.
Semel further testified that the Sunny Days' workplace was "normal" and it was not "pathologic with victimization, sexual harassment, [or] exploitation[.]" Semel said that "all work has stress . . . and how we cope with it becomes critical." Semel re-evaluated K.S. in November 2006 and his opinion did not change. He concluded that the Sunny Days workplace environment did not cause K.S.'s "upset" and she did not suffer any workplace injury.
Evidence also was presented regarding Sunny Days' workers' compensation insurance. Legion Insurance Company (Legion) insured Sunny Days Services from October 2002 to February 22, 2003. Legion later became insolvent and the New Jersey Property-Liability Guaranty Association assumed responsibility for some of Legion's claims. Alea provided coverage to Sunny Days Services from February 23, 2003, and was providing coverage when K.S. left her job on March 5, 2003. Sunny Days Center was insured by New Jersey Manufacturers Insurance Company from August 23, 2001 to August 23, 2003.
In addition, K.S.'s wage records revealed that she was paid by both Sunny Days companies. Sunny Days Center paid about eighty-four percent of her wages and Sunny Days Center paid the balance. K.S. stated that she was paid by both companies for accounting reasons only. She said that her working time was split evenly between the two entities. Maher and Rescino testified, however, that between sixty-five and eight-five percent of K.S.'s time was spent working for Sunny Days Center.
The judge of compensation rendered a decision from the bench on November 28, 2007. The compensation judge found that K.S. had sustained a workplace injury resulting in permanent disability of twenty-five percent of partial total. The judge accepted K.S.'s testimony and stated that the record "clearly indicated" that K.S. was under "substantial pressure at her job" and the pressure "increased as time went on[.]" The judge found that K.S. was not able to work from March 6 to September 10, 2003, and awarded K.S. temporary disability payments for that period.
The compensation judge further found that, although K.S. had psychological and personal problems prior to her employment at Sunny Days, she "continued to function at jobs and in life in general until she worked for" the Sunny Days companies. The judge thus found that K.S. did not have a pre-existing permanent disability. He noted that presently K.S. was only able to work part-time as a clerk in a bookstore, and she was "taking heavy medication" which she had not taken before she went to work for Sunny Days.
The judge apportioned the entire award to Alea. The judge stated that none of the medical experts had been able to apportion K.S.'s disability "between the respondents' carriers or her pre-existing problems." The judge found that, although K.S.'s symptoms had developed before Alea began to provide coverage to Sunny Days Services, there was "no way in the record to determine when her condition became fixed and compensable."
The judge entered a judgment dated November 29, 2007, memorializing his decision. The judgment awarded K.S. twenty-six weeks of temporary disability payments, one-hundred-fifty weeks of permanent disability, attorneys' fees and certain costs. Alea filed a motion seeking reconsideration of the judge's determination that K.S. sustained a compensable injury and the apportionment to it of the entire award. K.S. filed a cross-motion for reconsideration, seeking an extension of the period of temporary disability from September 10, 2003 to March 14, 2006.
The judge addressed the reconsideration motions in a decision rendered from the bench on January 25, 2008. The judge denied Alea's motion and granted K.S.'s cross-motion, awarding K.S. additional temporary disability benefits. The judge entered an order dated January 25, 2008, memorializing its decisions on the motions. Alea, as insurer for Sunny Days Services, filed a notice of appeal on February 21, 2008. K.S. filed a notice of cross-appeal on March 10, 2008.*fn1
In its appeal, Alea argues that the judgment entered by the compensation judge should be reversed because K.S. failed to present sufficient evidence showing that she suffered a compensable injury while working at Sunny Days. Alea maintains that the finding by the compensation judge that K.S. sustained a compensable injury is not supported by sufficient credible evidence because K.S. did not present objectively verifiable evidence that her job was stressful and peculiar to the Sunny Days workplace.
The Workers Compensation Act (the Act) generally provides that a covered worker has a right to benefits for "any compensable occupational disease arising out of and in the course of [his or her] employment," as defined in the Act. N.J.S.A. 34:15-30. The Act defines "compensable occupational disease" to "include all diseases arising out of and in the course of employment, which are due in a material degree to causes and conditions which are or were characteristic of or peculiar to a particular trade, occupation, process or place of employment." N.J.S.A. 34:15-31(a).
When a worker claims that an injury was induced by stress in the workplace, the worker must present evidence establishing that the working conditions were stressful, "viewed objectively[.]" Goyden v. State Judiciary, Superior Court of N.J., 256 N.J. Super. 438, 445 (App. Div. 1991), aff'd o.b., 128 N.J. 54 (1992)). The worker also must show that "the objectively stressful working conditions" are "'peculiar' to the particular work place, and there must be objective evidence supporting a medical opinion of the resulting psychiatric disability, in addition to the 'bare statement of the patient.'" Id. at 445-46 (quoting Saunderlin v. E. I. DuPont Co., 102 N.J. 402, 412 (1986)).
The facts in Goyden and the result reached in that case are instructive. Goyden began working in the office of the Clerk of the Superior Court in 1959 and became supervisor of records in 1976, holding that position until his retirement in 1984. Id. at 440-41. During that time, the volume of work in the office increased and backlogs in the filing of court documents developed. Id. at 441. Goyden sought workers' compensation benefits, claiming that he suffered disabling physical and mental injuries due to "occupational exposure." Ibid.
The Clerk of the Superior Court acknowledged that in 1984, there was an "unprecedented backlog" in the processing of papers in his office. Id. at 448. The Clerk said that he and Goyden had worked together to address the problem and he hired additional staff to deal with the backlog. Ibid.
In early March 1984, Goyden announced that he planned to retire and the Clerk suggested that he reconsider that decision. Ibid. Later that month, management evaluated Goyden's job performance. Ibid. Goyden's evaluation included favorable comments but indicated that his interpersonal skills could be improved. Ibid. The evaluation also indicated that, at times, Goyden did not recognize authority. Ibid.
Goyden considered the evaluation "'vindictive.'" Ibid. He asked to be relieved of certain duties and stated that his performance had been considered unsatisfactory. Id. at 449. Goyden filed a grievance, asserting that the evaluation was "'defamatory'" and the "'result of bias.'" Ibid. He stated that the Clerk had acted illegally and "'in a conspiratorial manner.'" Ibid.
Goyden also stated that he was suffering from hypertension, which he attributed to the Clerk's actions. Ibid. He sought medical help and was taken to a hospital for tests. Ibid. He claimed that his physical symptoms were the result of "'vindictive management procedures[,]'" the "'uncontrollable backlog,'" the failure to obtain needed supplies and certain "'derogatory statements.'" Id. at 449-450. Goyden additionally claimed that his depression had been brought about by "'vindictive management practice[s].'" Id. at 450.
The compensation judge found Goyden's testimony to be credible and determined that he was one-hundred percent disabled "because of a chronic and severe depression attributable to his work[.]" Id. at 440. The judge determined that Goyden had presented sufficient objective evidence of stressful working conditions which contributed to the development of a mental disorder. Id. at 442.
We reversed the compensation judge's decision, holding that what Goyden had "reacted to as stressful on the job was not the objectively verifiable work conditions" but rather "his perception of his conflict" with the Clerk and other managers. Id. at 456. We noted that the evidence did not show that management had unfairly or vindictively targeted Goyden and there was "ample evidence that" he had not been. Ibid.
We further noted that, even if the Goyden's working conditions were stressful, those conditions were not "'peculiar'" to the workplace and did not justify the medical opinion that the conditions were "'material' causes" of his disability. Id. 458 (quoting Williams v. Western Electric Co., 178 N.J. Super. 571, 585 (App. Div. 1981)).
We additionally observed that "the underlying condition from which Goyden suffered, [was] his compulsive personality, which stemmed from his childhood and tied his self-esteem to his job, [and] created his stress on the job." Ibid. We commented that the medical testimony "also supported a finding that Goyden's retirement decision, combined with his personality, triggered his depression, and would have done so, regardless of 'peculiar' workplace conditions." Id. at 458-459.
We are convinced from our thorough review of the record in this matter that the evidence presented by K.S. in support of her claim suffers from the same deficiencies as the evidence presented in Goyden. Like Goyden, K.S. failed to present sufficient credible evidence showing that the conditions in her workplace were objectively stressful. As we stated previously, K.S. testified that after she began working at Sunny Days, the companies "grew like topsy." She maintained that her workload increased and her employers failed to provide sufficient staff to help her deal with it.
However, K.S. did not present any evidence comparing the work that she was required to do before Sunny Days expanded its business and the work she was required to do after the business grew. K.S. provided no evidence showing when the companies' revenue, income, personnel or payroll grew and by how much. Moreover, K.S. stated that the corporations grew to serve from between four hundred to five hundred and seventy five children, but she did not present any evidence as to the number of children that the Sunny Days companies served when she was hired, or any evidence to show how her workload increased as the companies began to serve more children.
Furthermore, while K.S. insisted that her workload was unmanageable, she failed to address the fact that Sunny Days hired additional personnel to help her with the bookkeeping work. Maher testified that by 2001, Sunny Days had four bookkeepers working under K.S.'s supervision. In addition, Sunny Days had hired Rescino to do its books and audits.
Moreover, K.S. testified that by September or October of 2002, she was overwhelmed by the amount of work she was required to do. She failed, however, to present evidence showing that other persons performing the same or similar responsibilities would have found the workload to be unreasonable, particularly in view of the number of persons employed to assist her.
Thus, K.S. failed to establish that her working conditions at Sunny Days were objectively stressful or that the conditions were "peculiar" to her workplace. We are convinced that, because such evidence was absent in this case, the compensation judge erred by finding that K.S. sustained a compensable psychological injury resulting from stressful working conditions in the workplace.
K.S. argues, however, that she presented sufficient credible evidence to show that she was required to work under objectively stressful conditions. She maintains that all of the witnesses testified about the "incredible growth" of the companies. The companies may have grown but this does not mean that the resulting working conditions were objectively stressful or peculiar to Sunny Days.
K.S. also argues that the compensation judge's findings are supported by the testimony of Sharon Swayze (Swayze), who was one of individuals that Sunny Days hired to assist K.S. with the bookkeeping in the New Jersey office. According to K.S., Swayze provided "the most objective proof" of how stressful K.S.'s job was. We disagree.
Swayze testified that she went to K.S. on several occasions and told her that the workload was overwhelming. Swayze may have been occasionally overwhelmed by the workload, but her testimony does not establish that K.S.'s working conditions were objectively stressful or peculiar to this particular workplace.
K.S. additionally contends that the testimony of her medical experts supports the findings of the compensation judge. Again, we disagree. Gershenbaum and Kiell had no personal knowledge of the conditions in the Sunny Days workplace. In forming their opinions as to K.S.'s disability, Gershenbaum and Kiell relied upon what K.S. told them about the workplace. Because K.S.'s failed to show that the workplace conditions were objectively stressful or peculiar to the Sunny Days workplace, the experts' opinions had an insufficient factual basis.
K.S. further contends that we should defer to the findings of the compensation judge because they are supported by substantially credible evidence and were influenced by the judge's assessment of the credibility of the witnesses. However, our disagreement is not with the judge's credibility findings but rather with the judge's view that the evidence presented here was legally sufficient to support a claim for workers' compensation benefits. Clearly, it was not.
Reversed on the appeal; the cross-appeal is dismissed.