Subrogation Provision of the Workers’ Compensation Act and AICRA Mutually Exclusive?

Recently, in New Jersey Transit Corp. v. Sanchez, 237 N.J. 423 (2020) the New Jersey Supreme Court considered whether a workers’ compensation subrogation action is barred by the Auto Insurance Cost Recovery Act (AICRA). 

David Mercogliano, a New Jersey Transit (NJT) employee, was involved in a car accident with the defendant, Sandra Sanchez, while operating a New Jersey transit vehicle. Plaintiff sustained a cervical strain and strain of the right trapezius. At the time of the accident, Mercogliano was insured under a standard automobile policy, with a verbal threshold limitation, under N.J.S.A. 39:6A-8(a). NJT paid Mercogliano workers’ compensation benefits, and Mercogliano never sought nor received PIP benefits under his personal automobile insurance. NJT sought to recoup workers’ compensation benefits paid to Mercogliano pursuant to a provision of the Workers’ Compensation Act, NJSA 34:15-40(f). The defendant, Sanchez, relied upon the affirmative defense verbal threshold limitation under PIP, arguing AICRA barred the subrogation claim. The trial court granted the defendant’s motion relying on AICRA and held that because NJT paid for all Mercogliano’s medical expenses and lost income, Mercogliano had no uncompensated benefits, therefore sustained no economic loss for purposes of AICRA. NJT appealed and the Appellate Court reversed. 

The Appellate Court found that N.J.S.A. 34:15-40(f) provides an employer the right of reimbursement for benefits paid to employees injured during a work-related accident by a third-party tortfeasor. In this case, NJT paid the workers’ compensation benefits for Mercogliano’s economic loss, therefore the subrogation claim was not barred by the PIP verbal threshold limitation, N.J.S.A. 39:6A-8(a). 

The New Jersey Supreme Court affirmed the Appellate Court decision and found that the Legislature, when it enacted AICRA, did not intend to bar employers and insurers reimbursement from third parties for workers’ compensation benefits paid as an economic loss. The Court relied upon the plain language, statutory intent, and history of both, Workers’ Compensation Act and AICRA. The Workers’ Compensation Act was created to make available benefits to employees if injured during the course of their employment. The Act, in turn, provides the benefit of the employer or the employers’ carrier to seek reimbursement from third-party tortfeasors. AICRA, was enacted to ensure compensation of economic losses while limiting the right to sue for pain and suffering. The Court held the trial court erred in viewing the subrogation claim under AICRA and not Workers’ Compensation Act because Mercogliano was injured in a work-related motor vehicle accident. Moreover, the Court stated that when AICRA was enacted, the subrogation provision of the Workers' Compensation Act was not eliminated or even limited to bar such claims, therefore it was not the Legislature’s intent to bar such claims. 

Until the Legislature amends the AICRA to close the loophole of subrogation claims, there is potential to circumvent the common law bar to recover workers’ compensation benefits and file suit against a third-party tortfeasor.

Snow White and the On-Going Storm Rule

Recently, the New Jersey Appellate Court addressed the question of whether commercial landowners have a duty under the “on-going storm rule” to act and make safe their property when sleet or snow is falling. In Pareja v. Princeton Int’l Props., 2020 N.J. Super LEXIS 41, the Court found that the on-going storm rule has not been adopted in New Jersey and would arbitrarily relieve a landowner’s duty to reasonably remove or reduce foreseeable and known snow or ice hazards. 

In Pareja, the plaintiff, who wore non-slip shoes, walked onto the driveway of the defendant’s property, where he slipped and fell on black ice. Deposition testimony revealed that over the course of six days leading up to the accident, there had been three storms, leaving less than one inch of snow that was undisturbed. The Vice President of Princeton Property admitted he was aware of an advisory regarding untreated surfaces that might result in slippery surfaces but was unsure if steps had been taken to reduce or eliminate ice on the property on the date of the accident. The plaintiff testified that it was not snowing at the time of the accident, but “sleet was drizzling.” The trial court granted the defendant’s motion for summary judgment finding that defendants had no duty to remove or reduce the hazardous conditions until after precipitation ended due to the on-going storm rule. Additionally, the trial court determined that no jury could find de-icing steps would have been successful until after the storm ended. 

The on-going storm rule delays a landowner's duty to act after precipitation ends. Many jurisdictions reason that removal during a storm inexpedient and impractical, while others have rejected the stringent rule finding that landowners have a duty to reasonably respond to foreseeable dangers, particularly because tort law is founded upon deterrence of tortious actions and preventing injury. 

Ultimately, in Pareja, the Court rejected the on-going storm rule and found that commercial landowners have a duty to take reasonable steps to render a public walkway, covered by snow or ice, reasonably safe, which cannot be fulfilled by waiting for the storm to pass. The Court held that a landowner’s liability will arise if, upon actual or constructive notice, it fails to act as a reasonably prudent person would under the circumstances to remove or reduce any foreseeable harm. The Court reasoned that such a bright-line rule would suspend a landowner’s general duty to act with reasonable care as to snow and ice hazards while precipitation is falling. However, the Court explained that it was not imposing a strict liability to landowners for every slip and fall that occurred on a commercial property. Instead, the Court listed factors to be considered in determining if a landowner has fulfilled his/her duty. In assessing whether a landowner acted reasonably, a jury could consider: (1) whether the action by a landowner would be inexpedient or impractical; (2) the extent of precipitation; (3) whether precipitation occurred during the day or night; (4) steps taken by the landowner to remove, reduce, or prevent the accumulation of snow or ice, (5) whether the commercial property was “open” or “closed”; (6) the number of people anticipated on the property; or (7) past, current, and anticipated weather conditions.

From a defense perspective, Pareja teaches us that there is no affirmative defense of an on-going storm to justify the landowner’s failure to act. A landowner is not liable merely because a slip and fall has occurred on the landowner’s property during a storm, rather the court will look to steps the landowner took to prevent hazardous conditions, both prior to and during a storm.

The New Classic: Remote Depositions

In response to the COVID-19 pandemic, the Chief Justice of the Supreme Court of Georgia, issued an Order Declaring Statewide Judicial Emergency pursuant to OCGA § 38-3-61. That Order has been extended four times, with modifications.  The Statewide Judicial Emergency Order clarifies that while remote proceedings are encouraged litigants may expressly consent in the record to remote proceedings not otherwise authorized and affirmatively waive otherwise applicable legal requirements.

O.C.G.A. § 9-11-30(b)(4) states:  Notwithstanding the foregoing provisions of O.C.G.A. § 9-11-30(b), a deposition may be taken by telephone or other remote electronics means only upon the stipulation of the parties or by order of the court. For purposes of the requirement of the Civil Practice Act, a deposition taken by telephone or other remote electronic means is taken in the state and at the place where the deponent is to answer questions.

While opposing counsel may attempt to schedule a remote deposition during this pandemic, under Georgia law, one has a right to push back against taking a remote deposition. O.C.G.A. § 9-11-30 (b)(4), expressly states to proceed with a remote deposition all parties must agree. Furthermore, the agreement must be placed on the record. The attorney who is attempting to hold the remote deposition must show an exceptional good cause on how he/she will be prejudice if the deposition is rescheduled.

An option one can use, to place on the record your objection to participating in a remote deposition is to file a motion for Protective Order. A motion for a protective order should be filed as soon as a party learns it cannot comply with the discovery request and knows it needs a protective order. Millholland v. Oglesby, 115 Ga. App 715 (Ga. App.1967). A motion for protective order must be filed before the due date for the discovery or the date that the deposition is to be taken, and not afterwards. Id.

If you have an upcoming remote deposition (stipulated by all parties) scheduled, below are some practical tips to take prior to the scheduled deposition.

1. Virtual Deposition Vendor: use a vendor who has the capability to conduct the entire deposition remotely.

2. Equipment: all participants will need internet access on a computer/tablet with audiovisual capabilities.

3. Exhibits: while most vendors have exhibit sharing capabilities, counsel should prepare hard copies and send the exhibits to the witness and opposing counsel.

4. Recording: Counsel will need to hire a separate videographer to film the deposition if a recorded video deposition is needed.

5. Court Reporter: Counsel will need to notify the vendor which geographical location the court reporter will be located.

As more courts move towards remote depositions in light of the COVID-19 pandemic, know the rules for remote depositions in your jurisdiction.

Big Win for Canine Owners

Callahan & Fusco, LLC recently prevailed on a Motion for Summary Judgment to dismiss a premises liability matter pertaining to negligent ownership of a dog in the United States District Court of New Jersey.

This case arose from alleged injuries suffered by the plaintiff after she had arrived at defendant’s premises to attend a bridal shower.  Defendant had lent her farm property to her nieces as a venue.  The elderly plaintiff claimed that upon arriving at defendant’s driveway, she was caused to be knocked over by the insured’s dog, suffering a broken hip and requiring surgical intervention.  Prior to plaintiff’s fall, defendant had unleashed her dog who had been tethered to a tree; planning to take the dog with her to the store to get away from the commotion prior to the guests’ arrival.

Plaintiff in her Complaint alleged violation of municipal ordinances, common law strict liability, and negligent ownership of the dog in that defendant allowed the dog to freely roam her premises without a leash knowing the dog’s propensity to jump on people.

Following discovery, defendant moved for summary judgment, arguing that plaintiff had failed to provide any evidence for her claims. The Court issued a decision granting the motion. 

In its decision, the Court first analyzed the municipal leash law, which prohibited dogs to remain unleashed on public property.  The plaintiff argued that the imposition of this ordinance highlights the dangers of unleashing one’s animal.  The Court, though, agreed with our argument that just because a municipality had enacted an ordinance prohibiting conduct in certain locations did not mean that the prohibitive conduct was itself dangerous.  Thus, defendant had no obligation to leash her dog on her own property.

The Court also analyzed whether plaintiff had made her case for strict liability under the common law.  Under New Jersey law, strict liability will be imposed for injuries caused by a domestic animal whose owner knew of the animal’s dangerous propensities. See Hayes v. Mongiovi, 121 N.J. Super. 272, 275 (Dist. Ct. Nov. 1, 1972).  Plaintiff claimed that defendant’s decision to leash her dog was indicative of her knowledge as to the dog’s propensities.  The Court, though, found that plaintiff merely made allegations as to defendant’s purported knowledge which failed to create a genuine issue of fact.

Finally, the Court examined plaintiff’s common law negligence claim.  In negligence cases involving injuries caused by domestic animals, under New Jersey law, “the duty owed is ‘commensurate with the danger to others which will follow’ if the dog escaped from the owner’s control.” De Robertis v. Randazzo, 94 N.J. 144, 156 (1983).  Using this standard, the Court found no evidence that the dog was unruly or agitated prior to being unleashed.  Plaintiff also failed to present any evidence that the dog had a history of being overly affectionate or tended to act in a way that posed a danger to others.  Also, the court reasoned that the town’s ordinance allowed defendant to permit her dog to roam unleashed within the confines of her property.

Thus, the Court concluded that as a matter of law, no duty of care owed to Plaintiff was violated and a great result was achieved for our client, a caring and responsible dog owner.

Accuracy Leads to Successful Defense

It is a staple in insurance defense litigation for conflicts to arise concerning whether a landowner of a property is liable for maintaining the sidewalk versus the tenant, especially if the lease agreement contains specific indemnification language. A 2020 New York decision sheds light on this issue as well as the importance of having an accurate deposition testimony.

In Bullock v. 1585 Realty Co. LLC, plaintiff was injured when she tripped/fell on the sidewalk/cellar doors in front of Wine & Liquor, a tenant of 1585 Realty Co. LLC., who was the owner of that property. The landowner and tenant executed a lease agreement, which contained language that delegated the owner to maintain public portions of the building (both interior and exterior) and delegated the tenant to maintain the building in good condition (including the sidewalk). However, the lease agreement made it clear that the cellar/vault doors were not part of same. Additionally, a rider provided that the tenant was responsible to maintain and clean the storefront, street entrance, and passageways to and from the building.

Wine & Liquor filed a motion for summary judgment seeking dismissal of plaintiff’s complaint and defendant, 1585’s indemnification cross-claim. The Court denied the aforementioned motion and ruled that “A landowner may maintain an indemnification action against a tenant who agrees to maintain the property [Xiang Fu He v. Troon Mgmt., Inc., 34 N.Y.3d 167, 114 N.Y.S.3d 14, 137 N.E.3d 469 [2019]; see also Wahl v. JCNYC, LLC, 133 AD3d 552, 20 N.Y.S.3d 65 (1st Dept 2015]” (Bullock v 1585 Realty Co. LLC, 2020 NY Slip Op 32104[U] [Sup Ct, NY County 2020]). Further, the Court cited to plaintiff’s deposition testimony, where it was uncertain as to whether plaintiff stepped on the sidewalk or the cellar/vault doors (which was excluded from the lease). Since the deposition testimony was unclear as to the precise location of the fall, the motion was denied as to dismissal of the indemnification cross-claim.

In the arena of insurance defense, we represent both landowners and tenants in various disputes similar to the litigation above and come across analogous situations in numerous cases. However, we must ensure that while deposing the plaintiff (in a personal injury related matter), we accurately pinpoint the precise location of the alleged accident as it is imperative for our defense efforts/strategy for the case. As seen in the case above, it can make all the difference between a successful summary judgment decision on indemnification versus a mere failed attempt.

“No Double Dipping – Set It Off”

Florida’s Fourth District Court of Appeals (“4th DCA”) recently issued an opinion that significantly impacted a jury’s damages award. The court’s ruling represented a major win for the insurers, which successfully set off thousands in duplicated benefits.

In Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company vs. Jeffrey H. Wolfson, Case Nos. 4D18-3652 and 4d19-118 (June 24, 2020), following a car accident, the insured (Jeffrey Wolfson) filed a claim under his UM policies with his insurers, which they did not pay. The insured filed suit. The sole issue presented to the jury related to the insured’s damages.  The jury awarded the insured a total of $1,579,629.00 (comprised of: $810,000 for loss of earning; $367,629 for medical damages; and $400,000 for pain and suffering). Post-verdict, the insurers filed a motion to set off from the verdict the amount of any settlements which duplicated any part of the verdict. Nationwide argued that it settled the insured’s UM claim for injuries and lost earnings for $100,000. The insured argued that no Florida Statute expressly authorized an UM carrier to obtain a set off for duplicated benefits paid by another UM carrier. Likewise, the insured settled his claim against AIG for $480,667.50. He argued that the AIG settlement did not duplicate the jury-determine benefits, as it related to his wife’s unpled loss of consortium claim and not injuries and lost earnings claims. The trial court denied the insurers’ motion for set off.

On appeal, the 4th DCA concluded that the set off of the AIG settlement was based on the settlement release’s plain language, which clearly and unambiguously stated it was only for the insured's benefit (“for the benefit of Jeffrey Wolfson”). As to the Nationwide settlement, the 4th DCA noted Section 627.727(1), Fla. Stat., (2018) (in relevant part): “The coverage described under this section shall be over and above, but shall not duplicate, the benefits available to an insured under any workers' compensation law, personal injury protection benefits, disability benefits law, or similar law…” While it does not define “similar law”, the 4th DCA found that because the section was legislatively enacted coverage, therefore personal injury protection benefits and disability benefits law are also legislatively enacted coverages. The 4th DCA concluded that the benefits provided under an UM policy cannot duplicate benefits already paid to an insured under another UM policy.  The 4th DCA affirmed the jury’s total award amount but remanded for the trial court to set off the settlement amounts, thereby enter a final judgement of $998,961.50.