Opinion
DOCKET NO. A-1441-14T4
09-02-2016
DIOCESE OF METUCHEN, a/s/o ELISSA MARTINEZ, Petitioner-Respondent, v. SISTERS OF THE IMMACULATE HEART OF MARY, Respondent-Appellant. ST. BARNABAS MEDICAL CENTER, Intervenor-Respondent.
William T. Freeman argued the cause for appellant (Brown & Connery, attorneys; Mr. Freeman, on the brief). Edward Richard Boylan argued the cause for respondent Diocese of Metuchen a/s/o Elissa Martinez (Golden, Rothschild, Spagnola, Lundell, Boylan & Garubo, attorneys; Mr. Boylan, on the brief). Steven Stadtmauer argued the cause for respondent St. Barnabas Medical Center (Celentano, Stadtmauer & Walentowicz, attorneys; Mr. Stadtmauer, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Sabatino and Suter. On appeal from the Department of Labor and Workforce Development, Division of Workers' Compensation, Claim Petition No. 2014-3114. William T. Freeman argued the cause for appellant (Brown & Connery, attorneys; Mr. Freeman, on the brief). Edward Richard Boylan argued the cause for respondent Diocese of Metuchen a/s/o Elissa Martinez (Golden, Rothschild, Spagnola, Lundell, Boylan & Garubo, attorneys; Mr. Boylan, on the brief). Steven Stadtmauer argued the cause for respondent St. Barnabas Medical Center (Celentano, Stadtmauer & Walentowicz, attorneys; Mr. Stadtmauer, on the brief). PER CURIAM
The Sisters of the Immaculate Heart of Mary (IHM) appeal a Division of Workers' Compensation (Division) judgment, following trial, that requires IHM to reimburse the Diocese of Metuchen for medical and temporary disability payments made to a worker injured at a convent, to pay future worker's compensation benefits to the injured worker, to pay her outstanding medical bills and to pay attorney's fees. We affirm in part and remand in part on the issue of permanent disability.
I.
Elissa Martinez was severely burned in the face, neck and torso while working as a cook at the convent of the Sisters of the Immaculate Heart of Mary (IHM). The convent, a high school, and an elementary school are part of the Immaculate Conception Church, all of which are owned by the Diocese of Metuchen (Diocese).
Martinez was hired as a cook by IHM's Mother Superior of the convent, where Martinez worked twelve hours a week preparing meals for the sisters and cleaning up. Martinez and the Mother Superior signed a contract that included Martinez's salary and duties. She was paid a net wage of $175 per week by checks issued by IHM. Martinez received direction from the Mother Superior regarding her employment activities.
IHM is an order of Catholic Sisters located in Immaculata, Pennsylvania. It assigns individual sisters to work at the Immaculate Conception Church and its schools. The sisters reside in the adjacent convent. There is a "ministerial agreement" between the Diocese and each of the IHM sisters who live at the convent. Under that agreement, the Diocese pays a stipend for each sister to IHM, which then allocates an amount per month to the sisters of the convent for their living expenses. Because of their vow of poverty, no individual sister receives a paycheck. An extra stipend of $600 per month also was paid to IHM by the high school and the elementary school, but this payment was not earmarked for a specific purpose and since Martinez's accident has been stopped. The stipend for the sisters assigned to the convent was the same whether or not they had a cook.
Martinez did not file a workers' compensation claim for her injuries. After the accident, IHM notified its insurance carrier and the Diocese about the incident. The Diocese thereafter paid Martinez's medical and temporary disability benefits on a "charitable basis." The Diocese then demanded of IHM's workers' compensation carrier, PMA Insurance Company (PMA), that it "immediately take over responsibility for [Martinez's] claim and reimburse the Diocese for all monies expended in the treatment, care and reimbursement of temporary disability benefits to" Martinez. When payment was not forthcoming, the Diocese filed a workers' compensation claim on Martinez's behalf, and in that claim disclaimed that Martinez was its employee. When IHM answered the claim petition, it also denied that Martinez was its employee. The Diocese filed a motion to require PMA to accept the claim and to pay benefits. St. Barnabas Medical Center (St. Barnabas) intervened seeking payment of $399,017 for in-patient hospital services provided to Martinez.
Following a hearing on the claim where the parties agreed that Martinez's accident arose out of and in the course of her employment and on the amount of her wages, the workers' compensation judge found the Division had jurisdiction to hear this dispute based on N.J.S.A. 34:15-15.1. She found the evidence was clear and convincing under either the "control test" or "relative nature of the work test" that Martinez was an employee of IHM, not the Diocese. The "control test" and the "relative nature of the work test" were satisfied because Martinez received direction from the Mother Superior who "had control of the work done by the injured worker" and because she received a paycheck from IHM. The judge found PMA wrongly failed to pay workers' compensation benefits. She ordered PMA to reimburse the Diocese for what it had paid on behalf of Martinez and to pay such medical bills as were outstanding. The judge awarded counsel fees of $50,000. The order also provided that PMA was to pay future medical and disability benefits, including permanent disability, to Martinez. IHM's motion for reconsideration was denied, but since then, we entered a stay of the judgment upon the posting of a supersedeas bond.
On appeal, IHM asserts that the workers' compensation judge did not have jurisdiction to hear these claims, that Martinez was not an employee of IHM and that the awarded counsel fees exceeded the applicable statute.
II.
Our standard to review the factual findings made by judges of the Division is limited to whether the findings could reasonably have been reached on "sufficient credible evidence in the record, considering the proofs as a whole, giving due regard" to the judge's opportunity to observe and hear the witnesses and to evaluate their credibility, and to the judge's "expertise in the field of workers' compensation." Close v. Kordulak Bros., 44 N.J. 589, 599 (1965); see also Brock v. Pub. Serv. Elec. & Gas Co., 149 N.J. 378, 383 ( 1997); Perez v. Capitol Ornamental, 288 N.J. Super. 359, 367 (App. Div. 1996). However, we owe no special deference to the compensation judge in her resolution of legal questions. Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973) (applying de novo review to determinations of legal issues). The determination of whether the court had jurisdiction to hear this claim petition is a legal issue for our de novo review.
We remain guided by the remedial nature of the Workers' Compensation Act, N.J.S.A. 34:15-1 to -142, which Act is "entitled to liberal construction in order to comport with its presumptive beneficence." Brunell v. Wildwood Crest Police Dep't, 176 N.J. 225, 235 (2003). The Act allows claim petitions to be filed by and on behalf of injured employees. N.J.S.A. 34:15-15 states that an
employer shall not be liable to furnish or pay for physicians' or surgeons' services in excess of $50.00 and in addition to furnish hospital service in excess of $50.00, unless the injured worker or the worker's physician who provides treatment, or any other person on the worker's behalf, shall file a petition with the Division of Workers' Compensation[.]
[N.J.S.A. 34:15-15 (emphasis added).]
N.J.S.A. 34:15-15.1 then provides for reimbursement where another person or organization has paid expenses under the Act. Specifically:
Whenever the expenses of medical, surgical or hospital services, to which the petitioner would be entitled to reimbursement if such petitioner had paid the same as provided in section 34:15-15 of the Revised Statutes, shall have been paid by any insurance company or other organization by virtue of any insurance policy, contract or agreement which may have been procured by or on behalf of such petitioner, or shall have been paid by any person, organization or corporation on behalf of such petitioner, the deputy directors or referees of the Division of Workmen's Compensation are authorized to incorporate in any award, order or approval of settlement, an order requiring the employer or his insurance carrier to reimburse such insurance company, corporation, person or organization in the amount of such medical, surgical or hospital services so paid on behalf of such petitioner.
[N.J.S.A. 34-15-15.1 (emphasis added).]
There is no question that the Division had jurisdiction to hear this claim under the plain language of the statute. The Diocese filed a claim on Martinez's behalf under N.J.S.A. 34:15-15. Then, under N.J.S.A. 34:15-15.1, the Legislature contemplated that an entity, such as the Diocese, could seek reimbursement when it made payment of benefits without the obligation of an insurance policy, contract or agreement. N.J.S.A. 34:15-15.1 allows payments, without reference to a contract or agreement, by "any person, organization or corporation on behalf of such petitioner" to be included within any workers' compensation award.
The case of Conway v. Mr. Softee, Inc., 51 N.J. 254, 258 (1968), relied on by IHM, does not change this result. In Conway, the Court found the Division had no jurisdiction to entertain a claim for contribution instituted in the Division by one employer against another and found no error in the Division's decision not to reopen the workers' compensation proceedings. In IHM's appeal, however, the Diocese did not file a claim on its own behalf, but rather, as permitted by the statute, filed the claim on behalf of Martinez. The Diocese did not delay in identifying the potential "other employer" nor did the Diocese participate in the full adjudication of the claim before instituting a completely separate action against IHM, as had occurred in Conway. The claim in Conway was for contribution from the other employer, where the present claim is on behalf of the employee for reimbursement. Thus, the Diocese had clear statutory authority to file the claim for Martinez, which then gave the workers' compensation court the jurisdiction to hear the claim.
We find no error in the judge's determination that Martinez was an employee of IHM and not the Diocese. In general, whether a worker is an employee is determined based on two tests: (1) the "control test," and (2) the "relative nature of the work test." Lesniewski v. W.B. Furze Corp., 308 N.J. Super. 270, 280 (App. Div. 1998); see also Sloan v. Luyando, 305 N.J. Super. 140, 148 (App. Div. 1997). Under the "control" test, an employer/employee relationship exists when the employer retains the right to choose not only what is done, but how it is done. Pollack v. Pino's Formal Wear & Tailoring, 253 N.J. Super. 397, 408 (App. Div.), certif. denied, 130 N.J. 6 (1992). Courts typically consider several factors in assessing the presence or absence of control, including "evidence of the right of control, right of termination, furnishing of equipment, and method of payment." Aetna Ins. Co. v. Trans Am. Trucking Serv., Inc., 261 N.J. Super. 316, 327 (App. Div. 1993). Under the "relative nature of the work test," a court will find that an employer-employee relationship exists if a "substantial economic dependence" upon the employer is proven and it is also demonstrated that there is a "functional integration" of their respective operations. Caicco v. Toto Bros., Inc., 62 N.J. 305, 310 (1973); see also Sloan, supra, 305 N.J. Super. at 148; Rossnagle v. Capra, 127 N.J. Super. 507, 517 (App. Div. 1973), aff'd o.b., 64 N.J. 549 (1974). As part of this assessment, the court considers whether the work done by the petitioner was an "integral part of the regular business of the respondent." Pollack, supra, 253 N.J. Super. at 408; Rossnagle, supra, 127 N.J. Super. at 517.
We are satisfied the judge had ample support for the conclusion that Martinez was IHM's employee. With regard to the control test, all of Martinez's direction came from the Mother Superior of the convent. Martinez's agreement of employment was signed between herself and the Mother Superior, who had the ability to terminate Martinez's employment. The IHM headquarters agreed to the payment and issued the periodic pay checks. The Diocese had no input on who was hired as a cook, did not specifically earmark a part of the sisters' stipend for a cook and did not oversee her functions or duties. Consistent with these arrangements, IHM and not the Diocese, issued the annual W-2 tax forms to Martinez.
As for the "relative nature of the work test," Martinez had a substantial economic dependence upon IHM because it paid her paycheck and supplied the utensils and food she used to cook for the sisters. Martinez was an integral part of IHM's regular business, because Martinez cooked daily meals for the sisters in the convent and cooked only sporadically for the parish's Monsignor, who attended dinner at the convent occasionally upon invitations from the sisters. Moreover, Martinez did not work as a cafeteria aide, but instead worked exclusively for the sisters in the convent. She did not sign a ministerial agreement with the Diocese.
We reject IHM's claim that the judge erred in her assessment of attorney's fees. N.J.S.A. 34:15-64(a) provides:
The commissioner, director and the judges of compensation may make such rules and regulations for the conduct of the hearing not inconsistent with the provisions of this chapter as may, in the commissioner's judgment, be necessary. The official conducting any hearing under this chapter may allow to the party in whose favor judgment is entered, costs of witness fees and a reasonable attorney fee, not exceeding 20% of the judgment; and a reasonable fee not exceeding $400 for any one witness[.]Here, the judgment was for reimbursement to the Diocese of "any and all monies expended." It included (1) "any and all monies expended including payments to . . . Martinez; payments to medical providers and costs of suit with respect to the compensable injury of . . . Martinez"; (2) "all necessary and related medical treatment; temporary disability benefits and permanent disability to . . . Martinez going forward;" (3) "all reasonable, necessary and related outstanding medical bills related to the compensable accident which is the subject of this claim, including but not limited to the bills of St. Barnabas Medical Center;" (4) counsel fees of $50,000 and (5) $317.50 in costs of the suit.
[(emphasis added.)]
At the time of the hearing, the amount of unreimbursed medical expenses sought by St. Barnabas was $399,017. The judgment required PMA to pay the "reasonable, necessary and related" outstanding medical bills from St. Barnabas, but did not specify whether payment was to be made to St. Barnabas or through the Diocese. Although the Diocese originally contemplated paying this amount, its lien as of January 13, 2015 was $172,182.78. If the attorney fees were based only on the lien, the awarded fees would exceed 20%. Using the amounts owed to the Diocese and St. Barnabas, however we are satisfied an award of $50,000 for attorney's fees was within the 20% cap because the total amount for Martinez's injury exceeded $500,000.
We do agree, however, that the judgment was overbroad in that it included an award for permanent disability for Martinez. We remand to the Division on this issue because there was no explanation of the basis for, or amount of, this award.
We are mindful that the compensation judge who heard this case is now deceased and that the matter on remand must be reassigned. --------
Affirmed in part and remanded in part on the sole issue of permanent disability benefits. The stay of the judgment pending appeal shall expire in thirty days. We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION