Lewicki v. New Jersey Art Foundry

• Decision Date: 22 December 1981
• Citation: 88 N.J. 75,438 A.2d 544
• Parties: Frank LEWICKI, Petitioner-Appellant, v. NEW JERSEY ART FOUNDRY, Respondent-Appellant, and The Second Injury Fund, Respondent-Respondent.
• Court: New Jersey Supreme Court

Page 75

88 N.J. 75

438 A.2d 544

Frank LEWICKI, Petitioner-Appellant, v. NEW JERSEY ART FOUNDRY, Respondent-Appellant and The Second Injury Fund, Respondent-Respondent.

Supreme Court of New Jersey.

Argued Sept. 21, 1981.

Decided Dec. 22, 1981.

Samuel L. Marciano, Hoboken, for petitioner-appellant Frank Lewicki (Florio, Dunn & Marciano, Hoboken, attorneys).

George J. Kenny, Newark, for respondent-appellant New Jersey Art Foundry (Connell, Foley & Geiser, Newark, attorneys).

Lois J. Gregory, Deputy Atty. Gen., for respondent-respondent (James R. Zazzali, Atty. Gen.; Michael R. Cole, Asst. Atty. Gen., of counsel).

The opinion of the Court was delivered by

O'HERN, J.

The primary issue in this workers' compensation appeal is the proper standard of review by the Commissioner of Labor and Industry of a Compensation Judge's advisory report recommending an award of benefits from the Second Injury Fund. This Fund is available for compensation where a worker suffers injuries in a compensable accident, which injuries together with a previous permanent partial disability from some other cause result in total and permanent disability. Since employers are liable only for the disability attributable to the worker's employment, the Fund exists to compensate the worker for the balance of his disability.

Petitioner-appellant, Frank Lewicki, has become totally disabled after an industrial accident. He began working full-time at a foundry at age 16 and, with the exception of military service, spent most of his working life as a foundry man, dealing with powders, chemicals and hot metals to forge metal products. On December 13, 1973, after 25 years of service with the New Jersey Art Foundry, he was filling a "salamander" stove with kerosene when the stove exploded, sending flames into his face. The force of the explosion threw him against the molder's bench, injuring his back and head, and burning the right side of his neck and his right forearm.

Lewicki was taken immediately to Christ Hospital in Jersey City and treated for burns to the face, neck, head and right forearm and injury to the lower back. After his discharge from Christ Hospital, he continued to experience back pain and was admitted to St. Francis Hospital. A myelogram administered there disclosed a herniated disc which required surgical removal. After his release from the hospital, Lewicki continued to receive back treatment for approximately seven months. He filed a claim against New Jersey Art Foundry with the Division of Workers' Compensation. He also filed a verified petition seeking benefits from the Second Injury Fund pursuant to N.J.S.A. 34:15-94 et seq. The two proceedings were consolidated for trial. At the time of the hearing he had not returned to work.

In his March 16, 1979 decision, the Compensation Judge found that the petitioner was totally disabled, having suffered an aggregate of 77% of total permanent disability and 30% binaural hearing loss as a result of the accident and occupational exposure. He further found that petitioner was disabled to the extent of 10% to 15% for a hypertensive condition which he found preexisted the last compensable accident and which he determined to be the basis for Second Injury Fund compensation.

The judge's advisory report of Fund eligibility was submitted to the Commissioner on May 16, 1979. The Fund denied eligibility and filed exceptions with the Commissioner. On September 13, 1979, the Commissioner rejected the advisory report of the Compensation Judge and dismissed the application for benefits under the Second Injury Fund. The Commissioner found that there was no evidence in the record to support the judge's finding that petitioner's preexisting hypertensive condition was in fact disabling or that it was fixed, measurable and arrested, an asserted requirement for Fund liability. In addition, he found that petitioner had failed to show that his condition had not been aggravated or accelerated by his employment or that, if disabling, it was a causative factor in the overall picture of total and permanent disability.

Petitioner moved to vacate the compensation judgment and allow additional testimony in the Division of Workers' Compensation. He presumably sought to offer further evidence of the responsibility of the employer or the Fund for the total disability. The Second Injury Fund objected that only the Appellate Division was empowered to review a decision of the Commissioner. The petitioner discontinued the motion and filed a notice of appeal with the Appellate Division.

That court concluded that the findings of the Commissioner were supported by the record. Petitioner failed to prove that the preexisting hypertension constituted a permanent disabling condition, the court stating with regard to the findings of the Judge of Compensation that "the judge's contrary conclusion lacked adequate record support."

Aware of the potential anomaly of contrary findings by the judge and Commissioner and the potential prejudice to a petitioner found to be totally disabled, the Appellate Division remanded the matter to the Compensation Division for a hearing on the applicability of the odd-lot doctrine. It appeared that the petitioner, while not totally disabled, nevertheless might be unemployable because of "handicaps personal to the worker over and above the limitations on work capacity directly produced by his accidental injury...." Germain v. Cool-Rite Corp., 70 N.J. 1, 9, 355 A.2d 642 (1976). See Barbato v. Alson Masonry, 64 N.J. 514, 534, 318 A.2d 1 (1974).

We granted the petition for certification, 87 N.J. 315, 434 A.2d 69 (1981), because of the contradictory Appellate Division decisions in this case and in Delesky v. Tasty Baking Co., 175 N.J.Super. 513, 420 A.2d 1022 (App.Div.1980). The Appellate Division in Delesky held that the Commissioner of Labor may not overturn a determination by a Workers' Compensation Judge if his findings are based on sufficient credible evidence in the record.

The role of the Workers' Compensation Judge in cases involving the Second Injury Fund is set forth in N.J.S.A. 34:15-95.1. That statute requires that a claim for Second Injury Fund benefits shall be addressed to the Commissioner, "who shall refer it to a Deputy Commissioner of Workmen's Compensation (now Judge of Compensation) to hear testimony and for an advisory report as to findings.... The decision, however, as to whether the petitioner shall or shall not be admitted to the benefits shall be rendered by the said Commissioner of Labor." (Emphasis supplied). This language is clear. The report is simply an advisory report. Thus, the statute allows the agency head to undertake a de novo review. This legislative pattern is similar to that in the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq., which provides that an agency head may adopt, reject or modify the Administrative Law Judge's findings of fact and conclusions of law. It is also similar to the pattern in N.J.S.A. 11:15-6 and 11:2A-1 which provide for de novo appeals to the Civil Service Commission. Henry v. Rahway State Prison, 81 N.J. 571, 579, 410 A.2d 686 (1980). This separation of the hearing and decisional functions in agency adjudications may be regarded as a "necessary expedient in the effectuation of governmental business through its administrative machinery." Unemployed-Employed Council of N. J., Inc. v. Horn, 85 N.J. 646, 655, 428 A.2d 1305 (1981).

We do not agree with the Delesky court that the Commissioner is required "to accept and affirm the (compensation) judge's finding if that finding could reasonably have been reached on sufficient credible evidence present in the whole record." Delesky, supra at 517, 420 A.2d 1022. The Commissioner of Labor and Industry is free to make de novo findings of fact and conclusions of law on the basis of the record presented. We recognize that this procedure is inconsistent with the plenary quasi-judicial powers of Judges of Compensation in all other proceedings under the act. Indeed, the Legislature has exempted Judges of Compensation from the jurisdiction of the Office of Administrative Law. N.J.S.A. 52:14B-2(a). The distinct procedure applicable in this case has been created by the statute in order to afford a high degree of protection for the Second Injury Fund.

The Second Injury Fund (known at times in the past as the One Percent Fund and the Two Percent Fund) is a legislatively-created fund requiring contributions from workers' compensation insurance carriers and self-insured employers to absorb part of the impact upon employers of awards in certain cases involving permanent and total disability. L. 1923, c. 81, as subsequently amended (now N.J.S.A. 34:15-94 et seq.). The complete legislative history and purpose were set forth by Justice Burling in his dissent in Ratsch v. Holderman, 31 N.J. 458, 468-471, 158 A.2d 24 (1960). Commentators generally recite the following problem as a classic illustration of the purpose underlying this remedial legislation:

A has lost the sight of one eye in an accident. He is therefore rendered 25% disabled. He subsequently secured a job with B firm. Due to industrial accident he loses his other eye, rendering him totally blind and 100% disabled.

Since it is unfair to inflict the total burden of this loss on B, the Legislature concluded that the risk of such accidental injuries should be shared by all employers who contribute to the Fund. This policy protects employers who hire partially disabled workers from an unfair burden. It also protects the worker from being denied employment because of the potential risk of total disability. Lawson v. Suwannee Fruit & S.S. Co., 336 U.S. 198, 69 S.Ct. 503, 93 L.Ed. 611 (1949); Equitable Equip. Co., Inc. v. Hardy, 558 F.2d 1192 (5th Cir. 1977).

While the classic example is understood, the application of the principle to complex industrial accidents or occupational conditions has not been easy.

Under N.J.S.A. 34:15-95...