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Appellate Court Affirms Some Sanctions Against Employer and Reverses Other Sanctions

By on June 5, 2015 in Controlling Costs with 0 Comments

Sanctions against an employer in workers’ compensation are rather rare, and the case of Pschunder-Haaf v. Synergy Home Care of South Jersey, A-3138-13T3, (App. Div. May 12, 2015) provides some guidance on conduct that may lead to such sanctions.

The petitioner, Pschunder-Haaf, a home health aide, injured her low back when a patient fell on her.  She filed a workers’ compensation claim, and the Judge of Compensation entered an order requiring Synergy to provide medical and temporary disability benefits to her.  The Judge also required an evaluation by Dr. Luis Cervantes, a neurosurgeon. An order dated September 7, 2010 ordered  treatment with Dr. Cervantes and continuing temporary disability benefits until either Dr. Cervantes cleared petitioner to return to work or until the company offered light duty authorized by Dr. Cervantes.

Synergy did not pay certain medical bills and terminated temporary wage benefits.  There is no indication in the decision to suggest that Dr. Cervantes cleared petitioner to return to work or that petitioner returned to light duty work.  Petitioner therefore filed a motion to enforce the prior court order.  That led to a second order awarding petitioner temporary disability benefits, medical care, and counsel fees assessed against Synergy.

Fusion surgery followed, and petitioner alleged that she injured her left shoulder during the fusion surgery.  Synergy did not accept the left shoulder injury alleged to derive from surgery, leading to another motion for medical benefits.  Once again the Judge of Compensation ordered the company to provide treatment for the shoulder.

The petitioner amended the original claim petition to include injuries to her left shoulder and left knee.  When Synergy failed to provide additional medical treatment, petitioner filed yet another motion.  Her expert, Dr. Rosen, argued that her right leg gave way as a result of instability caused by radicular pain from her spine, and that in turn caused left knee problems.

The Judge of Compensation accepted the testimony of Dr. Rosen, petitioner’s expert, over that of Dr. Maslow, respondent’s expert, on the question of causation of the left knee condition.  She ordered that Synergy provide treatment for the petitioner’s primary and derivative injuries.  She denied Synergy’s motion for reconsideration and assessed sanctions of $5,000 and $10,000 against Synergy.  She awarded petitioner $7,500 in counsel fees and $5,654.14 in reimbursement for expenses, including the cost of Dr. Rosen’s testimony, which was $4,500.

Synergy appealed both the order in respect to the derivative shoulder and knee claims and the sanctions.  First, the Appellate Division found that there was credible evidence to support the judge’s decision that the derivative claims arose from work.

Second the court noted that there was substantial evidence in the record to support the judge’s conclusion that the shoulder was injured during the fusion procedure, and the left leg was injured because the right leg kept giving out due to radicular pain from petitioner’s work-related back condition.

On the sanctions issue, however, the Appellate Division took issue with some of the court orders.  First, it noted that the Administrative Rules of the Division of Workers’ Compensation allow fines and penalties in an amount not to exceed $5,000 for unreasonable delay or continued noncompliance. The Court vacated the $10,000 sanction because it exceeded the amount contained in N.J.A.C. 12:235-3.16(h)2.  Next, the Court focused on the award for costs of $800 and $4,500, the latter being the expense of Dr. Rosen’s testimony.  It cited N.J.S.A. 34:15-64(a), which limits the fee to an evaluating physician like Dr. Rosen to $400 for the report and another $400 for testimony.  It found that the order for costs was in excess of the amounts allowed by the statute.

The Court did affirm the $5,000 sanction against Synergy and the assessment of counsel fees of $7,500.

The case is important for practitioners because it is one of a very few appellate decisions that focuses on sanctions and costs as well as the statutes and rules that apply. Employers run the risk of sanctions if they choose to disregard a court order as opposed to filing a motion to be relieved form the court order.

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John H. Geaney

About the Author

About the Author:

John H. Geaney, an executive committee member and shareholder with Capehart Scatchard, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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