Ramella v. Borough of Seaside Heights
| Decision Date | 08 April 2019 |
| Docket Number | DOCKET NO. A-3310-17T3 |
| Parties | SHIRLEY RAMELLA, Petitioner-Respondent, v. BOROUGH OF SEASIDE HEIGHTS, Respondent-Appellant. |
| Court | New Jersey Superior Court — Appellate Division |
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
Before Judges Whipple and DeAlmeida.
On appeal from the New Jersey Department of Labor and Workforce Development, Division of Workers' Compensation, Claim Petition Nos. 2007-31369 and 2009-2736.
Gilmore & Monahan, PA, attorneys for appellant (Denis P. Kelly, on the brief).
Bagolie-Friedman, LLC, attorneys for respondent (Alan T. Friedman and Eric S. Ruiz, on the brief).
Respondent, Borough of Seaside Heights, appeals from the February 20, 2018 order of the Division of Workers' Compensation (Division) imposing a penalty, attorney's fees, and costs for the late payment of benefits after settlement of a claim. We reverse.
The following facts were derived from the record. On November 20, 2007, John Ramella, a Borough employee, filed a workers' compensation claim alleging he suffered injuries to his lungs as the result of exposure to deleterious substances while at work. On November 8, 2008, before his claim was resolved, John1 died of respiratory failure. After his death, John's wife, petitioner Shirley Ramella, filed an amended dependency claim petition alleging John died from chronic obstructive lung disease as the result of exposure to asbestos at work. The Borough disputed a causal relationship between John's illness and death, and the conditions he encountered during this employment.
During John's approximately fifteen-year employment, the Borough had four workers' compensation insurance carriers. In addition, there is a period of John's employment for which the Borough's insurance coverage is in dispute.
On August 15, 2017, the parties reached a lump-sum settlement in the amount of $50,000. Each insurance carrier assumed responsibility for the portion of the settlement attributable to the period for which they provided coverage to the Borough. The Borough agreed to pay $7500 of the settlement attributable to the period for which its insurance coverage is in dispute. The Borough's payment obligation was memorialized in an August 15, 2017 order of a judge of compensation. The order does not establish a timeframe for payment of the settlement amount to Shirley.
As a public entity, the Borough is subject to the Local Fiscal Affairs Law, N.J.S.A. 40A:5-1 to -50. Pursuant to that statute, before a public entity may disburse public funds, it must secure a voucher detailing the claim signed by the intended payee. N.J.S.A. 40A:5-16. On August 22, 2017, one week after the August 15, 2017 order, the Borough sent Shirley a purchase order, intended to function as a payment voucher, for her signature as intended payee of $7500. Shirley did not sign the voucher or return it to the Borough.
Neither Shirley nor her counsel contacted the Borough or its counsel seeking payment of the $7500. It was the Borough's counsel, after being notified by Borough officials that Shirley had not returned the voucher, who reached out to Shirley's counsel seeking assistance in having her sign the voucher. InJanuary 2018, Shirley executed the voucher and returned it to the Borough. It is undisputed that the Borough paid Shirley $7500 promptly after receipt of the signed voucher.
On January 8, 2018, after Shirley signed the voucher, but prior to the Borough's issuance of payment, her counsel moved to enforce the August 15, 2017 order. Before the return date of the motion, the Borough had paid Shirley.
On February 20, 2018, counsel appeared before the judge of compensation on Shirley's motion. The judge took no testimony and issued an oral opinion imposing a penalty on the Borough pursuant to N.J.S.A. 34:15-28.2 and N.J.A.C. 12:235-3.16. The judge found that the Borough had unreasonably delayed payment to Shirley because it should have prepared the voucher and obtained her signature during the eight years that her claim was pending. In addition, the judge found that the Borough's counsel should have brought the voucher with him on August 15, 2017, when the settlement was brought before the judge for approval. The judge did not make findings of fact with respect to Shirley's failure to sign the voucher, her counsel's failure to make any inquiry with respect to whether Shirley had received the payment, or the speed with which the Borough paid Shirley once her signature was obtained. In reaching her decision, the judge cited the holding in Amorosa v. Jersey City Welding & MachineWorks, 214 N.J. Super. 130 (App. Div. 1986), for the proposition that a thirty-day delay in complying with an order of the Division
The judge imposed a penalty of $5000 payable to the Second Injury Fund, the maximum amount permitted by N.J.S.A. 34:15-28.2(b) and N.J.A.C. 12:235-3.16(h)(2). The penalty represents approximately sixty-seven percent of the amount the Borough owed Shirley. In addition, the judge awarded Shirley's counsel $500 in attorney's fees. The record does not contain an affidavit of services and no reference was made by the judge to such an affidavit. The judge made no findings with respect to the reasonableness of the attorney's hourly rate or the number of hours expended on the motion. Finally, the judge assessed against the Borough a $90 stenographic fee.
The judge entered a February 20, 2018 order memorializing her decision. On April 24, 2018, the judge denied the Borough's motion for reconsideration and a stay.
This appeal followed. The Borough argues the penalty is not supported by the record because: (1) it was Shirley's failure to execute the voucher, and not any action of the Borough, that delayed payment; (2) no demand was madeby Shirley or her counsel for payment from the Borough after the voucher was sent to Shirley; (3) it was the Borough's proactive efforts to secure Shirley's signature that resulted in issuance of the payment to her; and (4) the penalty is excessive in light of the circumstances.
"Our analysis begins by noting that the scope of appellate review of factual findings by a judge of compensation is limited." Renner v. AT&T, 218 N.J. 435, 448 (2014). "An appellate court reviews a final agency decision with deference, and will not reverse the ultimate determination of an agency unless the court concludes that it was 'arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence[.]'" In re Freshwater Wetlands Gen. Permit No. 16, 379 N.J. Super. 331, 341 (App. Div. 2005) (quoting Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)). "Courts extend substantial deference to an agency's interpretation of its own regulations." Ibid.
"[T]he workers' compensation system has been carefully constructed by our Legislature in a manner that serves to protect the rights of injured employees to receive prompt treatment and compensation." Stancil v. Ace USA, 211 N.J. 276, 277 (2012). We have recognized "that prompt payment is required to ameliorate the economic disruption occasioned by a workplace injury and theloss of a regular paycheck." Quereshi v. Cintas Corp., 413 N.J. Super. 492, 499 (App. Div. 2010).
There is no statute establishing a specific timeframe for payment of workers' compensation settlement proceeds.2 The Division may, however, impose penalties for failure to comply with an order of a judge of compensation. According to N.J.S.A. 34:15-28.2:
The Division promulgated a regulation effectuating this statutory provision. According to N.J.A.C. 12:235-3.16:
The statute and regulation are designed "to address circumstances in which insurance carriers flout compensation judges' orders[.]" Stancil v. ACE USA, 418 N.J. Super. 79, 88 (App. Div. 2011), aff'd, 211 N.J. 276 (2012); Flick v. PMA Ins. Co., 394 N.J. Super. 605, 613 (App. Div. 2007). Imposition of asanction is permitted after a workers' compensation judge follows "[s]pecific and clearly defined procedures[.]" Stancil, 418 N.J. Super. at 91.
Having carefully reviewed the Borough's arguments in light of the record and applicable legal principles, we conclude that the imposition of a $5000 penalty is not supported by substantial credible evidence and was based on erroneous legal conclusions.
We begin our analysis with the observation that our review of the February 20, 2018 order was hampered...
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