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Kenneth Van Dunk, Sr. and Deborah Van Dunk v. Reckson Associates Realty Corporation; Reckson Construction and

June 26, 2012

KENNETH VAN DUNK, SR. AND DEBORAH VAN DUNK, PLAINTIFFS-RESPONDENTS,
v.
RECKSON ASSOCIATES REALTY CORPORATION; RECKSON CONSTRUCTION AND DEVELOPMENT LLC; PAULUS, SOKOLOWSKI & FLEMING, INC.; AND JOSEPH FLEMING, P.E., DEFENDANTS, AND JAMES CONSTRUCTION COMPANY, INC., DEFENDANT-APPELLANT.



On certification to the Superior Court, Appellate Division, whose opinion is reported at The opinion of the court was delivered by: Justice LaVECCHIA

SYLLABUS

(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.)

Kenneth Van Dunk, Sr., et al. v. Reckson Associates Realty Corporation, et al.

(A-69-10) (066949)

Argued October 12, 2011

Decided June 26, 2012

LaVECCHIA, J., writing for a unanimous Court.

The Court considers whether the defendant employer committed an intentional wrong that allows the injured employee to avoid the exclusive remedy provided by New Jersey's Workers' Compensation Act, N.J.S.A. 34:15-1 to -128.5, and pursue a common-law tort action for his workplace injuries.

On August 10, 2004, plaintiff Kenneth Van Dunk was working for defendant James Construction Company, Inc. (James) as a laborer assisting in site-preparation work on a construction project. James was excavating a trench to relocate a dewatering sump in a retention pond. The task had been affected by thunderstorms and heavy rain that required work to be redone without additional compensation to James. Rain was again expected later that day, creating a motivation to complete the sump relocation before the rain arrived. As the crew worked, filter fabric that was being laid in the trench from outside the trench became tangled. Van Dunk volunteered to go into the trench to straighten the filter fabric, but the project superintendent told him not to do so because of risks attributable to the ground conditions. However, as problems persisted with laying the filter fabric, the project manager, in a moment of frustration, told Van Dunk to go into the trench and straighten out the fabric. Van Dunk was in the trench for less than five minutes when a trench wall caved in, burying Van Dunk to his chest. He sustained multiple injuries.

An investigation by the federal Occupational Safety and Health Administration (OSHA) revealed that James had not complied with safety requirements for trenches. The project superintendent acknowledged to OSHA that he knew the requirements and failed to follow them. The OSHA report concluded that James had committed a willful violation and assessed a fine. James did not contest the violation.

In August 2006, Van Dunk and his wife filed this lawsuit against James and other defendants for damages arising out of his injuries from the trench collapse. The trial court granted James's motion for summary judgment after concluding that Van Dunk had failed to show that James's conduct met the intentional-wrong standard for overcoming the exclusive-remedy provision of the Workers' Compensation Act.

The Appellate Division reversed, holding that Van Dunk had produced sufficient evidence to show that James had committed an intentional wrong, rendering Van Dunk's lawsuit free of the Act's exclusivity bar. 415 N.J. Super. 490 (2010). The Supreme Court granted James's petition for certification. 205 N.J. 81 (2011).

HELD: In this case in which an employee is suing his employer for injuries sustained on the job, the employer's conduct fell short of an intentional wrong creating a substantial certainty of bodily injury or death; therefore, the workers' compensation statutory bar against common-law tort actions precludes this action.

1. The New Jersey Workers' Compensation Act (Act) requires swift and certain payment, without regard to fault, to an employee who sustains workplace injuries. In exchange for this remedy, the employer is immune from liability and the employee surrenders all other forms of relief, including the right to sue the employer. Under the express terms of the Act, this exclusive-remedy requirement can be overcome if the injury was the result of the employer's "intentional wrong." (pp. 12-14)

2. The landmark case interpreting the term "intentional wrong" is Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161 (1985). In Millison, the Court determined that mere knowledge and appreciation of a risk does not constitute intent. The Court adopted a "substantial certainty" standard, and established a two-step analysis. First, under the conduct prong of its test, the Court examined the employer's conduct in the setting of the case. Second, under the context prong, the Court considered whether the resulting injury or disease and the circumstances under which it was inflicted could fairly be viewed as a fact of life of employment or whether it instead was plainly beyond anything the Legislature could have contemplated as entitling the employee to recover only under the Act. In Millison, the Court found that the plaintiffs' claims of intentional exposure to asbestos failed to meet the substantial-certainty threshold because such hazards were considered within the risks the Legislature contemplated in passing the Act. However, the Court found the existence of a valid cause of action with regard to plaintiffs' second claim that the company and its physicians became aware through company physical examinations that the plaintiffs had contracted illnesses from asbestos exposure and hid that information from them, rather than providing medical treatment, thereby aggravating the conditions. (pp. 14-24)

3. Congress authorized the Secretary of Labor, through OSHA, to establish administrative regulations setting forth employment-safety standards. If an OSHA inspector assessing compliance with the regulations finds a deficiency, the inspector issues an official citation and orders the employer to abate the problem. Here, James was charged with violating the regulations governing the protection of employees in excavations, and it categorized the violation as "willful." Aside from requiring a civil penalty for willful violations, the term "willful" is not defined by the OSHA statute or by the regulations. In support of its findings that the violation was "willful," the OSHA report in this case indicated that the employer knew the requirements and that the work did not comply with the OSHA standards, therefore the employer intended the "result, i.e. noncompliance was not an accident or negligence." (pp. 24-28)

4. A finding of a willful OSHA violation is not conclusive in determining whether the employer committed an intentional wrong for the purposes of the Act. Instead, it is one factor among the totality of circumstances to be considered. In this case, the issuance of a willful OSHA violation against James was insufficient to defeat its motion for summary judgment, so the Court examines the totality of the circumstances of the accident and applies the conduct and context prongs of the substantial-certainty standard. (pp. 28-30)

5. A probability or knowledge that injury or death could result is not sufficient to demonstrate an intentional wrong. Instead, an intentional wrong must amount to a virtual certainty that bodily injury or death will result. In this case, the on-site supervisor made a quick but extremely poor decision and, against his own better judgment, sent Van Dunk into a trench to perform a brief task and get out. The Court does not find an objectively reasonable basis to conclude that the violation of safety protocol was substantially certain to lead to injury or death during the few minutes Van Dunk was going to be in the trench. The Appellate Division's totality of the circumstances analysis overvalued the finding of a willful OSHA violation and parlayed the possibility or probability of a cave-in into satisfaction of the substantial-certainty test. Because a likelihood of injury or death does not equate to a substantial certainty of injury or death, the conduct prong of the Millison test is not satisfied in this case. (pp. 30-34)

6. The context prong of the Millison analysis, which asks whether the injury and circumstances are beyond anything the Legislature could have contemplated as entitling the employee to recover only under the Act, is not satisfied here. The Court cannot conclude that the type of mistaken judgment by the employer and the ensuing accident were so far outside the bounds of industrial life as never to be contemplated for inclusion in the Act's exclusivity bar. (pp. 35-36)

7. Although a reasonable fact-finder could determine that the employer's actions in this case constituted gross negligence, that showing is not enough to overcome the Act's exclusivity requirement. Neither the conduct prong nor the context prong of the Millison substantial-certainty test is satisfied. Accordingly, the Act's exclusivity provision and specifically its statutory bar prevail to bar Van Dunk's action against his employer. (pp. 36-37)

The judgment of the Appellate Division is REVERSED.

CHIEF JUSTICE RABNER; JUSTICES ALBIN, HOENS, and PATTERSON; and JUDGE WEFING (temporarily assigned) join in JUSTICE LaVECCHIA's opinion.

Argued October 12, 2011

JUSTICE LaVECCHIA delivered the opinion of the Court.

New Jersey's Workers' Compensation Act (the Act), N.J.S.A. 34:15-1 to -128.5, provides a prompt and efficient remedy for an employee's claim against an employer for a workplace injury. The Legislature made the statutory workers' compensation remedy its preferred mechanism for providing compensation to injured workers. The Act's remedy is exclusive, except for injuries that result from an employer's "intentional wrong"; for those, an injured employee is permitted to maintain a common-law tort action against the employer. N.J.S.A. 34:15-8. A series of cases from this Court have addressed what constitutes an intentional wrong that permits relief from the statutory bar against a common-law action for a workplace injury. As the case law demonstrates, an employer's deliberate intent to injure is not the sine qua non; instead a substantial certainty that injury or death will result must be demonstrated. This appeal tests the limits of that formidable standard.

Plaintiff Kenneth Van Dunk and his wife filed this suit in the Law Division after he suffered serious injuries in a trench collapse at a construction site workplace.*fn1 Following discovery, the trial court granted summary judgment to the employer defendants. Based on its assessment of the totality of circumstances, the court concluded that plaintiff did not demonstrate an intentional wrong within the meaning of the Act, notwithstanding that the employer was issued a federal Occupational Safety and Health Administration (OSHA) "willful violation" citation as a result of the incident. The Appellate Division reversed the trial court's grant of summary judgment to the employer, and returned the matter to the trial court. Van Dunk v. Reckson Assocs. Realty Corp., 415 N.J. Super. 490, 505 (2010). We granted the employer defendant's petition for certification seeking review of that judgment. 205 N.J. 81 (2011).

No doubt, the circumstances in this matter are tragic. Although the proofs plaintiff advances could support a finding of gross negligence, that finding is insufficient to circumvent the statutory bar and maintain an action against plaintiff's employer. Based on the strong legislative preference for the workers' compensation remedy and an intentional-wrong standard that even an employer's recklessness and gross negligence fails to satisfy, we hold that this matter falls short of demonstrating that an intentional wrong creating substantial certainty of bodily injury or death occurred. The judgment of the Appellate Division is reversed. The workers' compensation statutory bar against a common-law tort action prevails and precludes this action.

I.

In August 2004, when his workplace injuries occurred, Van Dunk was working for defendant James Construction Company, Inc. (James) as a union-provided "as-needed" laborer on a construction project at Giralda Farms in the Township of Chatham and Borough of Madison. Defendants Reckson Associates Company, Inc. and Reckson Construction, LLC (together Reckson) had contracted with James for James to perform site-preparation work. James, in turn, appointed Glenn Key as the project superintendent. Key also served as the OSHA-required on-site "competent person" for the project as of August 1, 2004.*fn2 Prior to this workplace incident, Key had been an employee of James for thirty-two years and had experience as a previous project superintendent. For the Giralda Farms project, he reported directly to James's president, J.D. Potash, and was responsible for planning and executing the construction work and for meeting budgets and deadlines.

On August 10, 2004, at the Giralda Farms construction site, James was excavating a trench to relocate a dewatering sump in a retention pond. Prior to that date, the project had been plagued by thunderstorms and heavy rain that had required work to be redone, without additional compensation to James. Rain was expected again later that day; as a result, Potash and Key sought to complete the sump relocation before the rain arrived. The sump relocation involved the following steps: digging a sloped trench; laying down first a filter fabric and then a layer of stone; placing a pipe on the stone; placing more stone on the sides and top of the pipe; and then wrapping additional filter fabric around the stone. As the trench excavation continued and its slope reached a depth of greater than five feet, Van Dunk and other workers began laying down the filter fabric from locations outside the trench. Eventually, the deepest part of the trench reached a depth of eighteen to twenty feet.

OSHA safety regulations mandate that workers cannot enter a trench that is deeper than five feet if protective systems are not in place. 29 C.F.R. § 1926.652(a). A protective system is defined as "a method of protecting employees from cave-ins, from material that could fall or roll from an excavation face or into an excavation, or from the collapse of adjacent structures." 29 C.F.R. § 1926.650(b). James's Safety Program similarly requires use of protective systems to guard against cave-ins. Proper sloping and use of trench boxes are common protective systems, but for various reasons, Key determined that OSHA-compliant sloping could not be utilized at the trench's location, and a trench box was not employed.

Key and his workers experienced difficulty when laying down the filter fabric from their locations outside the trench. Despite their efforts, the fabric would not lay flat. It became tangled and a crease developed. Van Dunk volunteered to go into the trench to straighten the filter fabric, but Key told him not to do so because of the possible risks attributable to the ground conditions.*fn3 However, as problems persisted with laying the filter fabric, in what Key later described as a moment of "frustration" he told*fn4 Van Dunk to go in and straighten the fabric. Van Dunk went into the trench, walked to the deeper end, and began adjusting the fabric. He was in the trench for less than five minutes when a loud noise was heard and a trench wall caved in, burying Van Dunk to his chest. He sustained multiple serious injuries. He was rescued by co-workers who immediately responded to help him, some of whom jumped in to dig him out, and by police and emergency personnel.

OSHA investigators also arrived on the scene that day to investigate the incident and to interview Key. Their report states that the trench was approximately twenty feet in depth at its deepest point. Per OSHA standards, a registered professional engineer must design sloping or benching for a trench that is more than twenty feet deep. 29 C.F.R. § 1926 subpt. P, app. B, tbl.B-1. Key recognized that the trench's depth placed it "at the cusp" of requiring such special safety design treatment.

Importantly for purposes of this matter, Key readily acknowledged to OSHA that, as the competent person on-site, he knew the OSHA requirements and did not follow the standard for using a protective box for the trench's depth and category of soil type, notwithstanding that such a box was on-site. Also, there was no dispute that the sloping that was performed did not satisfy OSHA requirements; in his deposition Key explained that he lacked room to cut back the slopes more than had been accomplished. Those admissions led OSHA to find, in an investigative report, that the "non-compliance [with OSHA standards] was not an accident or negligence." As a result, the OSHA report concluded that James committed a willful violation and assessed a fine of $49,000. James did not contest the violation, but rather entered into negotiations with OSHA over the amount of the fine, ultimately agreeing to pay $24,500.

On August 8, 2006, Van Dunk and his wife filed the instant action against Reckson and James, among others, for damages arising out of his injuries from the trench collapse. The trial court granted defendants summary judgment because the court concluded that plaintiff failed to show that defendants' conduct met the intentional-wrong standard for overcoming the exclusivity of the workers' compensation remedy. See N.J.S.A. 34:15-8. During argument on the motion, the trial court summarized the standard that Van Dunk had to meet for the action to survive the motion for summary judgment, explaining that an "[i]ntentional wrong has been interpreted to mean deliberate intention beyond gross negligence or similar concepts imputing instructive intent. Or willful and wanton failure of an employer to undertake known safety and health procedures for protection of its employees." The court concluded that the totality of the evidence, viewed favorably to plaintiff, did not demonstrate conduct that reached the level of an intentional wrong. The court reached that determination notwithstanding that "OSHA found the violation which could be evidence of negligence. We don't know whether it was an intentional disregard or plain indifference."*fn5 Also, taking note of the "hazardous nature of construction sites," the court found that what occurred was "just a function of industrial life" on a construction site:

The plaintiff was out there. There would appear to be some frustration. Plaintiff jumps into the trench. The trench collapses five minutes later. In light of the totality of the circumstances, notwithstanding what occurred with the OSHA findings, ...


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