February 3, 2012
LORI FERGUSON, PETITIONER-RESPONDENT,
TRENTON BOARD OF EDUCATION, RESPONDENT-APPELLANT.
On appeal from the Division of Workers' Compensation, Department of Labor and Workforce Development, Claim Petition Nos. 2004-14021 and 2006-34318.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 10, 2012
Before Judges Baxter and Nugent.
The Trenton Board of Education ("BOE" or "the employer") appeals from two January 25, 2011 orders issued by a judge of compensation requiring BOE to pay a twenty-five percent statutory penalty to petitioner Lori Ferguson. The orders in question resulted from BOE's unilateral decision -- made without the approval of the compensation judge -- to refuse to issue any further payments to Ferguson of the previously-ordered workers' compensation temporary disability payments. In light of the remedial nature of the statutory scheme for payment of workers' compensation benefits, and in light of the wholly unwarranted and unreasonable nature of the employer's actions, we affirm the penalty orders under review.
Ferguson was hired as a physical education teacher by BOE on November 2, 1998. Although her full-time teaching position consisted of a ten-month school year, she was approved by BOE as a summer school teacher in 2000, 2002, and 2003, and was paid supplemental income for July and August during those years.
On January 7, 2004, Ferguson sustained the first of the two work-related injuries that are the subject of this appeal. While attempting to set up a scoreboard for her students, Ferguson was injured when a television fell off a stand and struck her in the head and neck, causing an injury to her cervical spine. Ferguson filed claim petition 2004-14021 on May 10, 2004 with the Division of Workers' Compensation, alleging injuries to her head, neck, and shoulder, as well as neuropsychiatric claims. She underwent surgery on her cervical spine in November 2004.
Ferguson returned to work briefly in May 2005, but her physician recommended a second surgical procedure that required her to leave work. In May 2006, after undergoing that second surgery, Ferguson was medically cleared to return to her employment. Because Ferguson was on leave in April 2006, when hiring was conducted for summer employment, BOE did not pay Ferguson disability benefits for July and August 2006. Nor did BOE pay her for summer work in 2005, because, at that time, she was medically unable to perform such duties.
On December 8, 2006, Judge of Compensation Emille Cox issued a consent order awarding Ferguson forty percent permanent partial total disability on the May 2004 claim, "for the residuals of discogenic disease of the cervical spine with bilateral brachial neuralgia status post two surgical interventions[.]" Pursuant to the order approving settlement, BOE agreed to pay Ferguson 1) temporary disability benefits of $467 per week for nearly eighteen weeks, for a total of $8,272.44; 2) permanent disability benefits of $347 per week for 240 weeks less $19,215, for a total of $64,065; 3) benefits for summer wages for 2004 and 2005; and 4) all authorized medical bills.
Unfortunately, on October 27, 2006, Ferguson suffered a second work-related injury when a student jumped on her and re-injured her neck, causing Ferguson to file claim petition 2006-34318 on December 6, 2006. Following several months of treatment, Ferguson was cleared to return to work in May 2007; however, because Ferguson was experiencing cognitive difficulties, her physician kept her out of work from May 22, 2007 until September 2007. She did not receive disability payments for the summer of 2007.
Ferguson returned to work in September 2007, and worked through December 12, 2007, when her authorized physician again recommended that she go out on medical leave. BOE did not pay Ferguson temporary disability benefits from December 12, 2007 through May 16, 2008, nor did BOE provide her with summer pay for July and August 2008.
On May 23, 2008, Ferguson filed an application for review or modification of the formal award, re-opening the first claim. The application alleged that her "medical condition ha[d] materially worsened since the entry of the last award. Petitioner is in need of medical care and treatment." Thereafter, on May 27, 2008, Ferguson filed a motion for medical and temporary disability benefits from May 2007 forward, pursuant to her second workers' compensation claim.
On September 19, 2008, Ferguson was examined by Virginia Gaskel, D.O., of BOE's corporate health department. Gaskel opined that Ferguson's injuries were so severe, she might never be able to return to her employment as a physical education teacher. Gaskel wrote:
Within a reasonable degree of medical certainty I do not believe the patient is capable of returning to work at this time. I will attempt to speak with her treating psychologist. . . . She has tried numerous times to return to work and has been unsuccessful. She states physically she does feel improved, but mentally she still has issues. I will continue to review her medical records and will attempt to contact her treating physicians to garner a treatment plan. In light of my discussion with the patient and review of records provided, I am unsure that the patient will ever be able to return to her duties as [a] physical education teacher.
After receiving Gaskel's report, BOE authorized further medical treatment for Ferguson, and found her unable to return to work.
On April 17, 2009, Judge of Compensation Cox granted Ferguson's motion for temporary benefits on the second claim, which had been filed in December 2006, ordering BOE to "continue to pay temporary disability subject to law and medical evidence." On July 31, 2009, he issued a second order, which continued BOE's obligation to pay Ferguson temporary disability benefits.
On October 23, 2009, Judge Cox entered two orders, the first denying without prejudice BOE's motion to alter the April 17 and July 31, 2009 orders, the second granting Ferguson's motion to enforce the July 31, 2009 court order, and requiring BOE to pay for her medical evaluation and treatment at Cooper University Hospital.
Five months later, a federal administrative law judge approved Ferguson's application for Social Security Disability (SSD), finding that Ferguson had been disabled since December 12, 2007. The ALJ's decision stated:
It is my decision that based on the application for a Period of Disability and Disability Insurance Benefits . . . the claimant has been disabled under Sections 216(i) and 223(d) of the Social Security Act since December 12, 2007.
Medical improvement is expected with appropriate treatment. Consequently, a continuing disability review is recommended in twenty-four months.
The workers' compensation offset provisions at 20 C.F.R. 404.408 may be applicable.
On May 20, 2010, because Ferguson was approved for, and was receiving,
SSD, BOE unilaterally stopped paying Ferguson workers' compensation
temporary disability benefits. As a result, on July 30, 2010, Ferguson
moved to enforce the April 17 and July 31, 2009 orders. Notably, her
July 30, 2010 motion
also sought an order "sanctioning [BOE's] insurance carrier and
awarding counsel fees." Although BOE filed no opposition to Ferguson's
motion for sanctions, Judge of Compensation George F. Geist*fn1
set the matter down for a hearing on September 3, 2010.
At the hearing, BOE asserted that Ferguson's receipt of SSD justified BOE's refusal to pay any further temporary disability benefits. BOE argued:
[I]t [is] our position that the petitioner has been accepted for social security disability, that determination of total disability by the social security administration has deemed that the petitioner has reached maximum medical improvement and that the treatment being offered at this time is palliative or maintenan[t] in nature. [We] will continue to provide the treatment to the petitioner, but it is our position that she has reached a plateau and is no longer entitled to temporary disability.
When asked by the court whether any caselaw supported BOE's contention that Ferguson receiving SSD benefits entitled BOE to terminate her temporary disability payments, BOE's counsel responded in the negative, stating, "unfortunately, I'm not in a position to present specific cases at this time." During the hearing, BOE also acknowledged that because Judge Cox had not amended his April and July 2009 orders, those orders remained in effect. BOE also conceded that it had not moved to vacate, amend, or reconsider either of the 2009 orders.
Citing N.J.A.C. 12:235-3.5,*fn2 Judge Geist granted Ferguson's motion to enforce the April 17 and July 31, 2009 orders. Specifically, his September 3, 2010 order required BOE to "immediately reinstate the payment of temporary disability benefits to Petitioner retroactive to the date last paid on or about May 20, 2010." After five weeks, when BOE had still not issued the retroactive payments, the judge of compensation conducted a hearing to address BOE's failure to comply with his September 3, 2010 order. At the October 12, 2010 hearing, BOE's counsel assured the judge "[i]t's in the process of being paid, Judge," adding that Ferguson would receive payment for the accrued period, "probably Friday, perhaps as late as Monday of next week." The judge cautioned BOE that if BOE failed to comply with his September 3, 2010 enforcement order, he would "accelerate the hearing without question."
Contrary to the assurances provided by BOE at the October 12, 2010 hearing, BOE did not pay Ferguson the long-overdue temporary disability benefits. Instead, BOE moved for reconsideration and for a stay of Judge Geist's September 3, 2010 order. In light of BOE's failure to issue the promised overdue payments, on October 27, 2010, the judge conducted a special hearing, during which Ferguson urged the court to impose the penalties authorized by N.J.S.A. 34:15-28.1 and N.J.S.A. 34:15-28.2 as a sanction for BOE's failure to comply with the prior court orders. The judge deferred the issuance of a ruling, pending further oral argument.
On October 30, 2010 -- more than eight weeks after the issuance of the September 3, 2010 order that required BOE to immediately resume payments, and eight months after BOE first halted the payments -- BOE finally issued five checks to Ferguson. The checks, which totaled $17,071, covered the benefits that were due between February 26, 2010 and October 25, 2010. Stated differently, Ferguson was forced to wait until November 2010 to receive payments for benefits due in February 2010.
On January 25, 2011, the parties appeared for a hearing to address the penalty provisions of N.J.S.A. 34:15-28.1 and 28.2. The judge denied BOE's motion for reconsideration of his September 3, 2010 order, reasoning:
[BOE] filed no opposition [to the summer benefits] at a time when there was a motion to enforce. No opposition. Then one month later says the checks will be sent. Then the checks aren't sent and Petitioner's Counsel has to do all of this to get the checks sent. . ..
First of all, I want to remind you we are in New Jersey. "An injured employee is entitled to temporary disability benefits from the date of his injury in the course of his employment to the earliest of several dates set by various physicians as the time when such disability ceased." There is no cessation. There is a continuation of treatment. Every one of the reports shows only continuation of treatment. . . . The words "[has reached] maximum medical improvement" are nonexistent . . . .
Next, the judge rejected BOE's assertion that Ferguson's receipt of SSD benefits entitled BOE to refuse to pay workers' compensation benefits. He reasoned that BOE lacked the authority to disregard a court order, but had done so nonetheless.
By four orders dated February 9, 2011, Judge Geist:
(1) denied BOE's motion for reconsideration of the September 3, 2010 order; (2) ordered BOE to pay Ferguson's attorneys' fees pursuant to N.J.S.A. 34:15-28.1 and N.J.S.A. 34:15-28.2 in the sum of $8310; (3) ordered BOE to pay Ferguson $4269, "which reflects a 25% penalty of past due temporary disability benefits . . . in accordance with N.J.S.A. 34:15-28.1 and 34:15-28.2(a)"; and (4) ordered BOE to pay Ferguson $95.46, which represented interest on the delinquent temporary disability benefits.
On appeal, BOE raises the following claims:
I. THE JUDGE OF WORKERS' COMPENSATION INCORRECTLY ASSESSED A TWENTY-FIVE PERCENT PENALTY AGAINST [BOE] PURSUANT TO N.J.S.A. 34:15-28.1, AS WELL AS, THE SIMPLE INTEREST FOR THE MONEYS DUE TO [FERGUSON] STEMMING FROM THE OUTSTANDING TEMPORARY DISABILITY BENEFITS, PURSUANT TO N.J.S.A. 34:15-28.2.
A. [BOE's] Termination of [Ferguson's] temporary disability benefits as of May 20, 2010 was warranted as [Ferguson] applied for and received Social Security Disability benefits, thereby removing herself from the work force.
B. Alternatively, [Ferguson] is not entitled to temporary disability during the summer months from July 1, 2010 through August 21, 2010 as [she] was unable to participate in summertime employment due to the neck injury she sustained on January 7, 2004, for which [she] had been fully compensated.
The scope of appellate review of workers' compensation cases is "'limited to determining whether the findings of the Judge of Compensation could reasonably have been reached on sufficient credible evidence present in the whole record, after giving due weight to his expertise and his opportunity of hearing and seeing the witnesses." Singletary v. Wawa, 406 N.J. Super. 558, 561 (App. Div. 2009) (quoting Kozinsky v. Edison Prods. Co., 222 N.J. Super. 530, 537 (App. Div. 1988), and citing Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)). Where, however, the appellant asserts error in the compensation judge's evaluation of the underlying facts and legal conclusions drawn therefrom, our scope of review widens. Ibid.
Because the Workers' Compensation Act, N.J.S.A. 34:15-1 to -128, is remedial legislation, it must be construed liberally. Wood v. Jackson Twp., 383 N.J. Super. 250, 253-54 (App. Div. 2006). As we observed in Wood:
The Workers' Compensation Act (the Act) is humane social legislation designed to place the cost of a work connected injury upon the employer who may readily provide for it as an operating expense. It has long been axiomatic . . . that the Act is remedial social legislation and should be given liberal construction in order that its beneficent purposes may be accomplished. Thus, the Act has consistently been accorded liberal construction. That being said, the preference toward liberal construction must nevertheless be constrained by the plain meaning of the statute and the underlying purpose of the legislature. [Ibid. (internal citations and quotation marks omitted).]
Temporary disability benefits,*fn3 such as those provided here, "provide an individual who suffers a work-related injury with a 'partial substitute for loss of current wages.'" Cunningham v. Atl. States Cast Iron Pipe Co., 386 N.J. Super. 423, 428 (App. Div. 2006) (quoting Ort v. Taylor-Wharton Co., 47 N.J. 198, 208 (1966)). When an employer has knowledge that temporary disability compensation is due, and "unreasonably or negligently delays or refuses to pay temporary disability compensation," the employer "shall be liable to the petitioner for an additional amount of 25% of the amounts then due plus any reasonable legal fees incurred by the petitioner" as a result of the delay. N.J.S.A. 34:15-28.1. "A delay of 30 days or more shall give rise to a rebuttable presumption of unreasonable and negligent conduct on the part of" the employer's insurance carrier. Ibid.
In 2008, the Legislature adopted a second enforcement statute, N.J.S.A. 34:15-28.2, which "provides the judge of compensation with a further remedy to address non-compliance with orders." Quereshi v. Cintas Corp., 413 N.J. Super. 492, 502 (App. Div. 2010). This section "allows a judge of compensation to impose costs, simple interest, penalties, reasonable legal fees, and fines up to $5000, and to issue a contempt citation against a recalcitrant employer or insurer." Ibid. N.J.S.A. 34:15-28.2 provides:
If any employer, insurer, claimant, or counsel to the employer, insurer, or claimant, or other party to a claim for compensation, fails to comply with any order of a judge of compensation or with the requirements of any statute or regulation regarding workers' compensation, a judge of compensation may, in addition to any other remedies provided by law:
a. Impose costs, simple interest on any moneys due, an additional assessment not to exceed 25% of moneys due for unreasonable payment delay, and reasonable legal fees, to enforce the order, statute or regulation;
b. Impose additional fines and other penalties on parties or counsel in an amount not exceeding $5,000 for unreasonable delay, with the proceeds of the penalties paid into the Second Injury Fund;
c. Close proofs, dismiss a claim or suppress a defense as to any party;
d. Exclude evidence or witnesses;
e. Hold a separate hearing on any issue of contempt and, upon a finding of contempt by the judge of compensation, the successful party or the judge of compensation may file a motion with the Superior Court for enforcement of those contempt proceedings; and
f. Take other actions deemed appropriate by the judge of compensation with respect to the claim.
"The congruence of the language between sections 28.1 and 28.2 is highly indicative that these remedial statutes are designed to provide similar remedies," namely, to deter employers and their insurance companies from wrongly withholding the payment of benefits. Quereshi, supra, 413 N.J. Super. at 499, 502.
BOE argues that because Ferguson effectively removed herself from the workplace when she was awarded SSD benefits, Judge Geist erred when he assessed a twenty-five percent penalty pursuant to N.J.S.A. 34:15-28.1, as well as interest pursuant to N.J.S.A. 34:15-28.2.
Alternatively, BOE contends, at a minimum, the judge erred by imposing a penalty for unpaid benefits for July and August 2010 because Ferguson was not entitled to temporary disability benefits for that period, as she was hired as a ten-month employee and had not consistently worked during the summer months prior to her injury. BOE contends that pursuant to Schiffres v. Kittatinny Lodge, Inc., 39 N.J. 139 (1963), Ferguson was not entitled to temporary disability during the summer of 2010, because the benefits were related to the first claim, for which Ferguson had been fully compensated.
BOE's contention that Ferguson's receipt of SSD justified BOE's refusal to pay workers' compensation benefits after February 2010 is unsupported by any legal authority. BOE provided Judge Geist with no caselaw or statutory support for such a claim, and has provided none before us on appeal. To the contrary, receipt of both workers' compensation benefits and SSD is permissible, as evidenced by the setoff provisions in the Social Security Act. See 20 C.F.R. 404.408. And nothing in the New Jersey Workers' Compensation Act justifies BOE's position.
Moreover, as both Ferguson and Judge Geist correctly observed, BOE did not challenge Judge Cox's April and July 2009 orders. Nor did BOE oppose Ferguson's July 30, 2010 motion for sanctions within the time specified by the applicable regulation, N.J.A.C. 12:235-3.5. That regulation provides that "a motion shall be considered uncontested unless responsive papers are filed and served within 14 days of the service of the notice of the motion." N.J.A.C. 12:235-3.5. Consequently, Ferguson's motion -- seeking penalties against BOE -- was deemed unopposed, which strongly supports Judge Geist's decision to impose sanctions. In light of: BOE's deliberate contempt of Judge Cox's orders; its failure to seek a modification of those orders before unilaterally deciding to halt the further payment of benefits; its failure to oppose Ferguson's motion for sanctions; the presumption under N.J.S.A. 34:15-28.1 that a payment delay exceeding thirty days is "unreasonable"; and BOE's inability to provide any caselaw or statutory support for its contention that Ferguson receiving SSD benefits justified BOE's refusal to pay workers' compensation benefits, Judge Geist's order imposing sanctions against BOE was a wholly proper exercise of the discretion vested in him by N.J.S.A. 34:15-28.1 and 28.2. We have been presented with no meritorious basis to disturb his order imposing sanctions.
We turn to BOE's alternative argument that, at a minimum, Judge Geist should have relieved BOE of any obligation to pay temporary benefits during the summer of 2010.
Temporary disability benefits generally begin from the day an employee is unable to work because of the work-related accident, and continue until the employee is able to resume work or until they are as far restored as the permanent character of the injury permits. Cunningham, supra, 386 N.J. Super. at 427-28 (citing N.J.S.A. 34:15-38 and Monaco v. Albert Maund, Inc., 17 N.J. Super. 425, 431 (App. Div. 1952)). If an employee is unable to resume work, the disability benefits may not be stopped simply because "the contract for hire was to have expired." Outland v. Monmouth-Ocean Educ. Serv. Comm'n, 154 N.J. 531, 539 (1998).
Consequently, a teacher employed under a ten-month contract may be entitled to temporary disability benefits during the summer recess period provided the claimant can prove an intention to work during the summer months. Id. at 542. In Outland, the Court reasoned we would agree . . . that [a teacher] would not be entitled to temporary disability benefits if [the claimant] planned to relax all summer, perhaps vacationing at the Jersey shore. In that case the benefits would represent a windfall. But the payment of temporary disability benefits would not create a windfall if [the teacher] planned to work during the summer recess and her injury prevented her from following through with that plan. On the contrary, to deny payments based on lost summer employment would frustrate the purpose of the workers' compensation system . . .. [Ibid.]
BOE relies on Schiffres in support of its contention that Ferguson was not entitled to summer benefits because she had been fully compensated by the settlement for the first claim. Although Ferguson attempted to re-open the first claim, Judge Cox's April and July 2009 orders, which were confirmed in Judge Geist's September 3, 2010 order, clearly refer to the second claim, namely, the cognitive injuries that resulted from Ferguson's 2006 injury. For that reason, we deem BOE's reliance on Schiffres to be misplaced.
Moreover, because Judge Cox ordered that benefits be paid for the summer period, BOE's decision to unilaterally terminate benefits was improper. Ferguson's consistency or inconsistency in working summers prior to her injuries did not persuade Judge Cox to refrain from awarding benefits for the summer months, and nothing in the present record suggests that these benefits would represent a windfall to her. See Outland, supra, 154 N.J. at 539. We perceive no abuse of discretion in Judge Geist's order requiring BOE to pay temporary disability benefits for the summer of 2010.