NJ Supreme Court Holds that Employee Cannot Maintain Suit Against Workers Compensation Carrier for Pain and Suffering due to Delay in Treatment

August 22, 2012

An injured employee does not possess a common-law right of action against a workers’ compensation carrier, even if the employee’s pain and suffering is caused by the carrier’s failure to timely pay for treatment, according to the New Jersey Supreme Court’s decision in Stancil v. ACE USA, No. A-1112-10.  The Court found that permitting such tort recovery would undermine, and even potentially replace, the state’s carefully crafted workers’ compensation system.

Plaintiff, Wade Stancil, received workers’ compensation benefits from his employer’s compensation carrier, defendant ACE USA, after suffering a workplace injury in 1995. In 2006, the compensation court found that Stancil was totally disabled, and in September 2007, he filed a motion to compel the defendant to pay outstanding medical bills. The court granted plaintiff’s motion and awarded counsel fees. As the bills remained unpaid through October 2007, the plaintiff sought further enforcement of the order through the compensation court. Another order compelling the defendant to remit immediate payment for the outstanding bills was issued, and counsel fees again awarded. However, plaintiff underwent additional treatment in 2008, which his physician directly attributed to delays in earlier treatment caused by ACE USA’s failure to pay providers. Subsequently, all of Stancil’s medical bills through 2008 were paid in their entirety.

However, in April 2009, the plaintiff filed a complaint in Superior Court, alleging that as a result of the insurance carrier’s delinquency, he endured additional and unnecessary pain and suffering. The trial court granted the defendant’s motion to dismiss the complaint for failure to state a claim, finding that the Workers’ Compensation Act precluded the type of tort-based relief sought by the plaintiff. The Appellate Division affirmed the trial court’s decision, noting that in recently amending the Act, the Legislature had contemplated claims similar to plaintiff’s and prohibited them.

The Supreme Court granted certification to address the limited question of whether an employee who suffered a work-related injury has a common-law cause of action against a workers’ compensation carrier for willful failure to comply with court orders compelling it to remit payment for treatment that results in the worsening of the employee’s condition.  The Court stated three reasons for affirming the decisions of the lower courts: 1) the workers’ compensation system was purposely designed to provide injured workers a remedy outside the realm of tort and contract law; 2) recent amendments to the Act gave compensation courts greater contempt power to use as an enforcement mechanism; and 3) plaintiff’s proposed remedy would threaten to engulf the workers’ compensation system by in essence allowing the exception to swallow the rule.  The Court also emphasized that in enacting amendments to the Act, the Legislature addressed the issue of resistant carriers by removing language allowing compensation courts to refer matters for civil or other proceedings from the original bill, codified in N.J.S.A. 34:15-28.2.

In dissent, Justice Albin stated that the Court’s decision permits insurance carriers who fail to honor their covenant of good faith and fair dealing with injured workers to use the Workers’ Compensation Act as a shield from tort liability.

– Allison Krilla

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NJ Supreme Court Does Not Allow Emotional Distress Claim for Witnessing Death of Pet

August 9, 2012

While acknowledging that people may form close bonds with their pets, the New Jersey Supreme Court refused to permit recovery for emotional distress damages stemming from the death of a pet in McDougall v. Lamm, No. A-99-10.  The Court declined to expand the grounds for relief set forth in Portee v. Jaffee, 84 N.J. 88 (1980), the seminal case regarding emotional distress claims arising out of witnessing a traumatic death.

In McDougall, the plaintiff was walking along the street with her nine-year old dog, a maltipoo, when the defendant’s dog, a much larger breed, ran toward plaintiff’s dog, grabbed it by the neck and shook it several times before dropping the maltipoo and running away. Plaintiff’s dog ultimately died. Prior to trial, plaintiff’s emotional distress claim was dismissed via a motion for partial summary judgment, and the trial court limited plaintiff’s claim for damages to the dog’s intrinsic value. Plaintiff appealed the dismissal of her emotional distress claim, and the Appellate Division affirmed the decision of the trial court.

The Supreme Court granted certification to address the question of whether pert owners should be entitled to recover for emotional distress caused by witnessing the traumatic death of a pet. The Court’s analysis focused on the second of the four elements a plaintiff must prove to establish a claim for bystander recovery outlined in Portee: 1) death or serious physical injury of another caused by a defendant’s negligence; 2) a marital or intimate, familial relationship between the injured party and the plaintiff; 3) observation of the death or injury at the scene; 4) resulting emotional distress.  The Court found that despite strong, emotional ties between owners and their companion pets, these bonds do not fall within the limited kinds of relationships permitted to recover Portee damages. In fact, the Court stated that because case law restricts recovery for witnessing the death of most humans, it would make little sense to allow plaintiff to pursue a claim for emotional distress over the loss of her dog.

Additionally, the Court noted that expanding Portee to include emotional distress claims based on the death of a pet would contradict existing statutes regulating dog owners and dangerous dogs, and the Wrongful Death Act, which limits recovery for wrongful death to money damages. Finally, the Court explained that an alternate ruling would create a class of pet owners, companion pets and analogous human relationships both unforeseeable and not readily identifiable.

–Allison Krilla, Esq.