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Joseph Cottrell v. Mid State Moving Company and the Uninsured Employer's Fund

February 10, 2011


On appeal from the Division of Workers' Compensation, Department of Labor, Claim Petition No. 1994-45486.

Per curiam.


Submitted January 12, 2011

Before Judges R. B. Coleman and J. N. Harris.

Appellant Avraham Herskowitz*fn1 appeals the denial of his motion to vacate a default judgment entered by the Division of Workers' Compensation (the Division), in favor of petitioner Joseph Cottrell. We reverse and remand for an evidentiary hearing.


Mid-State Moving Company (Mid-State) is a moving and delivery company that was incorporated under the name Mid-State Moving & Delivery Service, Inc. in 1989. Mid-State's Certificate of Incorporation denominates Sam Eizikovitz as its sole incorporator and director. Cottrell was employed by Mid-State as a mover from October 1992 until November 1994. He claimed that the owner of the company and his boss was Herskowitz. Cottrell's rate of pay during that time was approximately $600 per week.

According to the testimony received at the proof hearing, Cottrell injured his back while moving a piano in the course of his employment on November 13, 1994. After seeking medical care and consulting with an orthopedic physician, he filed a workers' compensation claim naming his employer, "Mid-State Moving Co.," as the sole respondent on December 5, 1994. Upon discovering that the employer did not have workers' compensation insurance,*fn2

Cottrell successfully moved to join the Uninsured Employers' Fund (UEF) in March 1995. See N.J.S.A. 34:15-120.1; N.J.A.C. 12:235-7.2.

On March 8, 1995, a copy of Cottrell's petition -- listing Mid-State as the sole respondent -- was delivered to Bryna Herskowitz, described in the proof of service as the wife of appellant. Six weeks later, on April 13, 1995, another copy of the petition was handed to Herskowitz, the corporation's nominal registered agent, but he refused to accept service.

In the ensuing decade, Cottrell sought and received various medical treatments amounting to over $100,000 in medical fees. All known medical bills were paid by the UEF. The workers' compensation litigation remained open and unresolved.

On January 8, 2004, Herskowitz was served with a copy of an amended petition naming him individually as a respondent. Inexplicably, the order permitting the amendment pursuant to N.J.S.A. 34:15-79,*fn3 was not signed by a judge of compensation until weeks later, on February 14, 2008. Cottrell's and the UEF's attorneys represented that several copies of motions for a default judgment were mailed to Mid-State and Herskowitz, to which there was neither a reply nor an appearance entered.

Also, according to those attorneys, the certified mail was returned as unclaimed or refused, but the regular mail was not.

On May 8, 2008, an order entering a default judgment was signed by the judge of compensation.*fn4 The body of the order indicated that the judgment was entered only against Mid-State, due to its failure to file an answer. Herskowitz's name was handwritten into the caption -- apparently with the assent of the judge of compensation -- confirming that Herskowitz individually was a named respondent, but the single ordering paragraph did not mention Herskowitz's liability or status.

The workers' compensation court then scheduled a proof hearing for June 19, 2008. Notwithstanding the plain language of the order entering default judgment (or, as the judge of compensation had it, just default) against Mid-State only, Cottrell's attorney sent Mid-State and Herskowitz a letter, dated May 15, 2008, notifying them that "a default [j]udgment has been entered against Mid-State Moving and you, Abba Herskowitz, individually."

On June 19, 2008, the judge of compensation heard testimony from Cottrell on the nature and extent of his injuries. Herskowitz neither attended the hearing nor sent a representative to protect his interests. Cottrell testified to the manner in which he initially incurred his back injury by moving a piano. He related that after an MRI revealed disc herniations in his back, he underwent various surgeries in 1995 and received epidural injections and acupuncture treatments.

Cottrell also testified about three motor vehicle accidents following his back injury. He reported an injury to his right shoulder resulting from a 1997 incident; injuries to his neck, right shoulder, and back from a 2005 accident; and an injury to his lip in a 2006 mishap. Throughout those years, Cottrell underwent numerous medical procedures and operations. In describing his situation, Cottrell testified, "ever since [1994], I have seen just about every kind of doctor there is. I have ...

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