Lozano v. Frank DeLuca Construction

• Citation: 178 N.J. 513,842 A.2d 156
• Parties: Porfirio A. LOZANO, Petitioner-Appellant, v. FRANK DELUCA CONSTRUCTION, Respondent-Respondent.
• Decision Date: 10 March 2004
• Court: United States State Supreme Court (New Jersey)

842 A.2d 156

178 N.J. 513

Porfirio A. LOZANO, Petitioner-Appellant, v. FRANK DELUCA CONSTRUCTION, Respondent-Respondent.

Supreme Court of New Jersey.

Argued December 2, 2003.

Decided March 10, 2004.

Raquel Romero, Elizabeth, argued the cause for appellant (Ms. Romero, attorney; Stephen G. Marshall, on the brief).

David P. Kendall argued the cause for respondent (Francis T. Giuliano, Ramsey, attorney; Mr. Kendall and Mr. Giuliano, on the brief). Justice ZAZZALI delivered the opinion of the Court.

In this workers' compensation case, we consider whether the phrase "recreational or social activities" as used in the Workers' Compensation Act encompasses activities that, although recreational or social in nature, are compelled by the employer.

While in the employ of a mason contractor, petitioner sustained an injury when he attempted to drive a go-cart on the property of his employer's customer. Petitioner alleges that he drove the go-cart only after his employer ordered him to do so. The Division of Workers' Compensation denied petitioner's claim for benefits, based on the recreational nature of go-cart driving and petitioner's failure to satisfy the two-part statutory test applicable to recreational and social activities. The Appellate Division affirmed.

We hold that when an employer compels an employee's participation in an activity generally viewed as recreational or social in nature, the employer thereby renders that activity work-related as a matter of law. We also hold that to recover under a theory of compulsion, the injured employee must establish that he or she engaged in the activity based on an objectively reasonable belief that participation was required. On the facts in this record, we cannot determine whether petitioner's claim that his employer commanded him to drive the go-cart is objectively reasonable. Therefore, we reverse the judgment of the Appellate Division and remand for further proceedings consistent with this opinion.

I.

At the time of his accident, respondent Frank DeLuca Construction (respondent or employer), a mason contractor, employed petitioner Porfirio Lozano as a general laborer. Lozano normally worked six days per week, from 8:00 a.m. to 4:00 p.m., at a rate of $10.00 per hour. Because of the nature of respondent's work as an independent contractor, Lozano did not have a fixed place of employment, but worked wherever his employer assigned him on any given day. Lozano, who did not have a driver's license and did not know how to drive, relied on Frank DeLuca,¹ the company's owner and Lozano's supervisor, for transportation between Lozano's home and the various work sites.

On the day of the accident, DeLuca picked up Lozano and another employee at their respective homes at approximately 8:00 a.m. and took the two employees to the job site, a private home belonging to Peter Borbas. Under DeLuca's supervision, Lozano and his fellow employee constructed a stone wall on Borbas's property. By approximately 5:00 p.m., the two employees had completed their task and were ready to return home.

Borbas had three go-carts parked on a paved, circular track that was separate from his driveway. As the two employees waited for DeLuca to take them home, Borbas and DeLuca each got into a go-cart and began driving around Borbas's track. When DeLuca finished, he directed Lozano to "get in" the go-cart. Not knowing how to drive, Lozano refused and explained that "[he] could not [drive] because [he] didn't know anything about it." DeLuca then told Lozano again to "get in," reassuring the employee that "it was easy." According to Lozano, he understood his supervisor's persistence to be a command and, therefore, got into the go-cart. On his first lap around the track, Lozano crashed into a parked truck and sustained severe injuries that required his hospitalization and the insertion of a plate and screws in his left ankle.

Lozano filed a claim with the New Jersey Division of Workers' Compensation, asserting that he sustained injuries from an accident arising out of and in the course of his employment. Respondent thereafter filed an answer disputing the work-relatedness of Lozano's accident. At trial, the parties agreed to bifurcate the proceeding and address solely the issue of respondent's liability.

As the only witness at the workers' compensation hearing, Lozano testified to the circumstances surrounding the accident. When asked on direct examination whether he interpreted DeLuca's directive to "get in" the go-cart as a command, Lozano stated that "[DeLuca] was my boss. I had to obey the order." Lozano's testimony was generally uncontested, although there was some initial uncertainty with respect to what time he had finished work on the day of the accident. Early in the trial, Lozano testified that he worked from 8:00 a.m. until 4:00 p.m. When later asked for the specific hour that he completed work on the day of the accident, Lozano stated that it was 5:00 p.m. That answer elicited a question from the judge about whether Lozano completed work at 4:00 or 5:00 p.m. In response, Lozano explained that he usually worked until 4:00 p.m., but that day he did not finish his assignment until 5:00 p.m. He further testified that the accident occurred within minutes of his completion of the construction project.

At the conclusion of Lozano's direct examination, respondent moved for dismissal. Respondent argued that Lozano had failed to establish the requisite causal relationship between his employment and the accident. To support its motion, respondent cited to Lozano's testimony that the accident happened after Lozano had completed his work. Respondent maintained that this "would be a clear horseplay case" or, in the alternative, a recreational activity after work had ended. Under either category, respondent asserted that Lozano had not met his burden of showing a causal link between his employment and his injury.

Opposing the motion, Lozano focused on his presence at the work site at the time of the accident. Lozano stressed that he "was required to be there until his employer took him home." Thus, he maintained that he was still "in the course of employment" when DeLuca allegedly commanded him to "do this" in reference to driving the go-cart. Citing those circumstances, Lozano argued that relevant case law entitled him to compensation.

After hearing the parties' arguments, the Judge of Compensation granted respondent's motion to dismiss. In an oral opinion, the judge concluded that at the time of the accident, Lozano was engaged in a "recreational activity" that was outside the scope of his employment. Despite Lozano's presence on the job site, the judge found that Lozano was "off the clock" when the accident occurred. Stating that Lozano must have "had a lot of fun," the judge held that Lozano's injuries resulted from a recreational activity that did not satisfy the two-prong test set forth in N.J.S.A. 34:15-7.

In an unpublished opinion, the Appellate Division affirmed the dismissal of Lozano's claim for the reasons expressed by the Judge of Compensation in her oral opinion. We granted certification, 177 N.J. 490, 828 A.2d 918 (2003), and now vacate and remand.

II.

As amended in 1979, the Workers' Compensation Act provides in pertinent part that employers shall compensate employees for accidental injuries arising out of and in the course of employment except when "recreational or social activities ... are the natural and proximate cause of the injury[.]" N.J.S.A. 34:15-7. To that general rule of no-recovery for recreational or social activities, the act carves out an exception when "such recreational or social activities are a regular incident of employment and produce a benefit to the employer beyond improvement in employee health and morale[.]" Ibid. Simply stated, an employee injured during a recreational or social activity must satisfy a two-prong test to qualify for compensation under the act—the activity (1) must be a "regular incident of employment," and (2) must "produce a benefit to the employer beyond improvement in employee health and morale."

In disputing the compensability of Lozano's injuries, the parties rely on contrary interpretations of the phrase "recreational or social activities." Respondent argues that the plain language of N.J.S.A. 34:15-7 reflects a clear legislative intent to limit recovery for injuries suffered during all "recreational or social activities." In other words, respondent contends that the Legislature did not intend to distinguish between activities that an employer compels and those that an employee undertakes voluntarily. Relying on that construction of N.J.S.A. 34:15-7, respondent submits that the Judge of Compensation properly concluded that Lozano must satisfy the two-part statutory test before recovery can be permitted on the facts presented.

In contrast, Lozano asserts that the phrase "recreational or social activities" is ambiguous. According to Lozano, whether an activity is recreational or work depends on the underlying circumstances and the state of mind of the employee. Thus, an activity traditionally viewed as recreational becomes work when it occurs on the work site and at the employer's direction. Under that approach, this case does not implicate the two-part statutory test because Lozano was not engaged in a "recreational or social activity" when the accident occurred.

Because resolution of the issue before us depends on the meaning given to the statutory phrase "recreational or social activities," we turn to familiar principles of statutory construction for guidance. Interpretation of a statute begins with "the plain meaning of the provision at issue." Burns v. Belafsky, 166 N.J. 466, 473, 766 A.2d 1095 (2001). When "the statutory language is clear and unambiguous, and susceptible to only one interpretation, courts should apply the statute as written without resort to extrinsic interpretative aids." In re Passaic County...