Peck v. Newark Morning Ledger Co.

• Decision Date: 05 October 2001
• Citation: 781 A.2d 58,344 N.J. Super. 169
• Parties: Joseph PECK, Jr., Petitioner-Respondent, v. NEWARK MORNING LEDGER COMPANY, Respondent-Appellant.
• Court: New Jersey Superior Court

781 A.2d 58

344 N.J. Super. 169

Joseph PECK, Jr., Petitioner-Respondent, v.NEWARK MORNING LEDGER COMPANY, Respondent-Appellant.

Superior Court of New Jersey, Appellate Division.

Argued September 10, 2001.

Decided October 5, 2001.

Thomas P. Scrivo, Morristown, argued the cause for appellant(McElroy, Deutsch & Mulvaney, attorneys; Mr. Scrivo, of counsel and on the brief; Richard J. Williams, Jr., also on the brief).

Paul A. Schwartz argued the cause for respondent(Goldstein, Ballen, O'Rourke & Wildstein, Passaic, attorneys; Mr. Schwartz, on the brief).

Before Judges PETRELLA, KESTIN and ALLEY. The opinion of the court was delivered by PETRELLA, P.J.A.D

PetitionerJoseph Peck was awarded permanent disability by the Division of Workers' Compensation for a carpal tunnel condition of his left and right hands as a result of conditions he was exposed to from working as a mailer for the Newark Morning Ledger Company(Ledger).

On April 18, 1997, Peck filed two claim petitions with the Division of Workers' Compensation, alleging that he suffers from carpal tunnel syndrome of the right and left hands, and related orthopedic, neurological, and neuropsychiatric disabilities as a result of the constant use of his hands while employed by Ledger.

After answering the claim petitions, Ledger moved to dismiss them.The Judge of Compensation heard testimony in connection with the motion from four witnesses and received written submissions from the parties and the Uninsured Employers Fund.The Judge of Compensation then denied Ledger's motion to dismiss in a March 13, 2000 order and written decision.¹The Compensation Judge thereafter entered judgment in favor of Peck on both of his claim petitions, awarding him a permanent disability award of 17½% of the right hand and 20% of the left hand.Ledger appealed from the final judgment.

Ledger argues on appeal: (1) its Article I election notice complied with the Workers' Compensation Act(Act);(2) the Article I election was timely; and (3) there was no violation of public policy.Ledger also asserts that it was adequately insured pursuant to the requirements of N.J.S.A. 34:15-72.

PetitionerJoseph Peck was employed as a mailer for The Star-Ledger newspaper, a publication of Ledger, since December 25, 1976.He testified that he became a fulltime employee with full benefits in or about 1979.In December 1995, after months of pain and numbness in his hands, Peck was examined by Dr. Nenna, an orthopaedist, who opined that Peck was suffering from bilateral carpal tunnel syndrome and recommended surgery.Peck underwent surgery for his left and right hands in 1996 and 1997, respectively.The parties agree that the medical treatment rendered to Peck was reasonable and necessary for his carpal tunnel condition.

Peck testified that he first signed a waiver document² on September 26, 1984, and that it was his understanding that if he did not sign the waiver, his employment with the company would be terminated.Peck testified that he was subsequently asked to sign another waiver because he was told that the company lost the first one.³He was under the impression, based upon discussions with his co-workers and the union president, that the waivers were only a bar to hearing disability claims.Peck is unsure whether he signed the second waiver before or after the onset of symptoms of his carpal tunnel condition.Beginning around 1979, the Article I election notice was also incorporated in Section 15 of the collective bargaining agreement between Ledger and its employees represented by the Newark Mailers Union, Local 11.

Bernard Arnold, general foreman of the mailroom, testified that he was told, and was under the impression, that the purpose of the waiver was to eliminate hearing loss claims.Arnold recalled first signing a waiver in 1979, and he was told he would be fired if he did not sign the waiver.He also recalled being informed by the union that an occupational disease was "[a]nything other than falling down and breaking your leg or arm...."

Bruce Berry, counsel for Ledger, testified that Ledger's motivation for electing Article I coverage was concern over "the fact that many workers' compensation claims for occupational disease had been filed by mailers."He stated that most of the mailers were previously employed as mailers by a newspaper that closed in the early 1970s, and that the mailers filed workers' compensation claims with the Ledger for conditions they were exposed to while employed by that newspaper.Berry recommended that the waiver language be placed in the collective bargaining agreements with Peck's union, which was done in each agreement commencing in 1979.Berry testified that the waiver was required to be signed by the mailers in 1979, 1984, and again in 1996 or 1997.He said that the waiver specifically applied to mailers and anyone who did not sign it would no longer be employed by the company as it was a condition of their continued employment.

John Starkes, Vice-President and Claims Manager of John L. Gwydir Co., Ledger's insurance brokers, testified that Liberty Mutual Insurance Company insured the Ledger under a workers' compensation policy that covers all of its employees both for general compensation claims under Article II(Part I of the policy) and for occupational claims under Article I of the Act(Part II of the policy).

I.

Ledger argues that Compensation Judge Calderone erred in denying its motion to dismiss because its Article I election notice complied with the applicable provisions of the Act(N.J.S.A. 34:15-1 et seq.).

N.J.S.A. 34:15-9 provides, in pertinent part, that:

Every contract of hiring ... shall be presumed to have been made with reference to the provisions of [Article II], and unless there be as a part of such contract an express statement in writing prior to any accident, either in the contract itself or by written notice from either party to the other, that the provisions of [Article II] are not intended to apply, then it shall be presumed that the parties have accepted the provisions of [Article II] and have agreed to be bound thereby.

[Emphasis added.]

There is a presumption that employers and employees accept the provisions of Article II of the Act(N.J.S.A. 34:15-7 et seq.) unless there is an express written election not to be bound by the article.⁴In the case of such an election, the provisions of Article I apply,⁵ and an employee who is not willfully negligent has a negligence action against his or her employer for damages for injuries "by accident arising out of and in the course of ... employment."N.J.S.A. 34:15-1.

As stated in Naseef v. Cord, Inc.,48 N.J. 317, 322-323, 225 A.2d 343(1966):

New Jersey has what is commonly known as an "elective system" of workmen's compensation.[citation omitted].Under this system either the employer or employee may reject the ordinary system of compensatory non-fault liability (in New Jersey, Article II coverage), thus leaving the employer liable to his employee for only common-law negligence (in New Jersey, Article I coverage).

In the case of Article I coverage, the employee's claim may not be defeated by the defenses of ordinary contributory negligence ..., assumption of risk ..., or negligence of a fellow-employee ....[citations omitted].Most employers are thereby led to accept liability without fault according to Article II of the Workmen's Compensation Act.[footnote omitted].

* * *

Not only may the parties enter into an agreement that [Article II] shall not apply, but also either the employer or the employee may make this selection so long as he gives written notice to the other prior to a compensable accident....[T]he required notice must be clear and comprehensible so that the recipient of the notice understands the purport of the contract provision or the written notice.[Citations omitted.]

In finding that the employer's notice was insufficient, Naseef held:

Under this liberal approach, an employer who wishes to deprive his employees of their workmen's compensation benefits under Article II must strictly comply with the statute.Such an election by an employer is insufficient if it fails to give clear written notice that Article II will not apply and if it indicates to the workman that he has no rights whatsoever under either article of the workmen's compensation statute.

Id. at 326, 225 A.2d 343(emphasis added).

Ledger asserts that an Article I election notice is valid so long as it is objectively clear and that evidence of the employee's subjective understanding is irrelevant.However, in Royal Insurance Co. v. Pohlman,95 N.J.A.R.2d(WCC) 83, 86 (1994), the Compensation Judge held:

The gist of Naseef and the statutory and decisional law cited therein is that an agreement to be bound by Article I rather than Article II cannot be enforced unless: (a) It is in writing; (b) it spells out in very precise and unambiguous language the fact that both parties know that they are entitled to be bound either by Article I or Article II;(c) it describes in exact detail the benefits which each party would receive under Article I and Article II as well as the risks inherent in rejecting Article II in favor of Article I;(d) it was made prior to the occurrence of an injury or illness; (e) there is independent evidence to show that the parties understood exactly what they were getting and what they were giving up when they agreed to the election and that neither party agreed to the election because of fraud, duress, misrepresentation or undue influence.

[Emphasis added].

In Licata v. Lutz,48 N.J. 255, 259, 225 A.2d 127(1966), the Court, citing Naseef, emphasized the importance of the employee's understanding, stating that "the success or failure of [the notice at issue] depends upon whether, considering all the circumstances, it was understood by the employee that he was not to have the benefits of Article II coverage."Therefore, it is clear that...