If I have a workers compensation case in New Jersey can I also sue in Superior Court?

What is a Section 20 Settlement and why is my attorney proposing it to me?

Submitted by New Jersey Workers Compensation Lawyer, Jeffrey Hark.

MARGARITA SORIANO, Individually and as Administratrix Ad Prosequendum of the ESTATE OF GUMERCINDO SORIANO,  Plaintiff-Appellant, v. 70 HUDSON STREET REALTY, LLC, DF 70 REALTY, LLC, MF 70 REALTY, LLC, LJC 70 REALTY, LLC, HAZEL ROCK, INC., and HOUSTON SPECIALTY INSURANCE COMPANY, Defendants-Respondents.  Decided February 27, 2019

This case involves a slip and fall of a bar employee who was found at the bottom of a makeshift ladder in a basement storage facility in a bar.  The wife of the deceased employee made a workers compensation claim and sued the bar and building owner as well.  The facts are as follows:

In August 2012, decedent – then fifty-nine years old – began working as a cook at The Green Rock Tap & Grill (the restaurant), a bar-restaurant operated by defendant Hazel Rock, Inc. (Hazel Rock). Hazel Rock leased the property from defendant 70 Hudson Street Realty, LLC (Hudson). (Defendants DF 70 Realty, LLC; MF 70 Realty, LLC; and LJC 70 Realty, LLC own Hudson. The record indicates the principal owners of these entities are Mario Fini, a battalion chief with the Hoboken Fire Department, and Patrick Cappiello, a retired captain with the same department.)

On August 4, 2013, decedent’s co-worker found him unconscious in the basement of the restaurant, at the bottom of a rudimentary hatch ladder system extending down from the restaurant; two days later, decedent died at a local hospital without regaining consciousness. Plaintiff contends decedent sustained fatal head injuries when he either slipped or fell down the unsafe, illegally installed hatch ladder system. A hospital laboratory report after decedent’s admission listed his blood alcohol concentration (BAC) as 0.228. (Notably, at oral argument, counsel advised that the deposition of the nurse who completed the blood draw had not been taken. In State v. Renshaw, we noted the importance of the testimony of the nurse who completes the blood draw to confirm that proper steps were followed. 390 N.J. Super. 456, 468 (App. Div. 2007). For instance, “an error . . . in using an ethanol, rather than a betadine swab, or in the drawing of blood from an artery rather than a vein . . . could . . . falsely and unfairly [inflate] the BAC reading.”) Ibid.  Despite this BAC reading, the record contains no observations of impairment of decedent before he was found unconscious in the basement. Dan Grey, a restaurant manager and the last person to see decedent alive, testified that decedent appeared fine and not impaired approximately one hour before he was found. Another co-worker, Daniel Ordone, saw decedent thirty minutes earlier and decedent also appeared fine to him.

At the time of decedent’s fatal accident, restaurant employees had two ways to access the basement of the restaurant. From an outside door on the street, they could use stairs leading down to the basement. Alternatively, they could use the hatch ladder system, consisting of a hole in the floor of a locked storage room. A square, wooden hatch door covered the hole; when lifted, the hatch door revealed a four foot, five inch mounted ladder, leading down to a small platform, and then an unmounted aluminum ladder3 extending another five feet, eight and one-half inches down from the platform to the cement floor of the basement. Thus, the total distance from the trap door opening to the cement basement floor exceeds ten feet.

Michael Gallucci, one of the owners of Hazel Rock, testified that employees typically used the hatch ladder system to access the basement because it was faster. The basement contained Gallucci’s office, a walk-in refrigerator, three ice machines, and storage of beer, wine, and liquor. Barbacks7 went down to the basement most often to retrieve ice or other items for the bar. The cooks only used the basement to meet with Gallucci.

Hudson acquired the building that includes the restaurant leased to Hazel Rock in 2003. When Hudson acquired the building, Hazel Rock was already a tenant, renting just one floor for its restaurant. In July 2004, Hazel Rock contacted Hudson, expressing interest in leasing the basement area below its restaurant space. While the record contains three letters exchanged on this issue, the record inexplicably fails to contain any letters or emails confirming the agreement reached between Hudson and Hazel Rock regarding the lease of the basement, nor any addendum or amended lease addressing this issue. At some point during the latter half of 2004, Hazel Rock began leasing the basement below its restaurant. Because the only way to access the basement from the restaurant was through an outside door, Gallucci wanted to install the hatch ladder system at issue. According to Gallucci, when he informed Hudson regarding the proposed installation, Hudson told him they had “permits out on the building,” since “they were doing a lot of work on the building.” As a result, Gallucci did not obtain a construction permit for the hatch ladder work since Hudson told him no permit was necessary. While Gallucci claimed he hired a contractor to install the hatch ladder system, he could not recall the name of the contractor. Regardless, the record clearly shows that Hazel Rock installed the hatch ladder system without a construction permit, without design plans, and without any inspections by any construction code officials.

According to Gallucci, Fini and Capiello were both aware of the hatch ladder system. In contrast, Fini and Capiello both deny knowledge of any Hudson representative granting permission for Hazel Rock to install the hatch ladder system or seeing it in place before decedent’s accident. Nevertheless, Capiello admitted he was present in the basement “when [Gallucci] took the space,” referring to the final negotiation which expanded the leased premises to include the basement. Of note, it appears from the record that, at all relevant times, Hudson had its offices on the seventh floor of the same building as the restaurant.

A May 19, 2010 lease8 between Hudson and Hazel Rock included a “BUILD-OUT ADDENDUM,” which placed strict conditions on all “tenant improvements or alterations.” In the addendum, Hudson required Hazel Rock to “comply with all of the laws, orders, rules, and regulations of all governmental authorities” and to procure all required “governmental permits and authorizations.” The addendum further required Hazel Rock to submit to Hudson “all plans and specifications” for “prior written approval” before commencing any work. The addendum also obligated Hazel Rock to use only “fully licensed and insured contractors.”

Workers compensation issue:  What is a Section 20 Settlement?

Shortly after decedent’s accident, plaintiff filed a workers’ compensation claim. In its answer, Hazel Rock admitted decedent was employed “on date alleged in petition,” but denied the accident “[a]rose out of and in the course of employment.” Hazel Rock and plaintiff eventually reached a $60,000 Section 209settlement. The settlement order states it is “pursuant to N.J.S.A. 34:15- 20[,] which has the effect of a dismissal with prejudice, being final as to all rights and benefits of the petitioner and is a complete and absolute surrender and release of all rights arising out of this/these claim petition(s).” On July 22, 2015, plaintiff filed a complaint against Hudson. Plaintiff later amended her complaint to add claims against Hazel Rock and defendant Houston Specialty Insurance Company (Houston Specialty), Hazel Rock’s insurer.

This court discussed in detail what exactly a Section 20 settlement is under New Jersey’s Workers Compensation Act.  Specifically as a foundational policy basis: “Workers’ compensation laws “provide an expeditious and certain remedy for employees who sustain work injuries by the statutory imposition of absolute but limited and determinate liability upon the employer.” Wilson v. Faull, 27 N.J. 105, 116 (1958) (citing Cardillo v. Liberty Mutual Ins. Co., 330 U.S. 469 (1947)). New Jersey’s “statutory scheme represents a compromise whereby “[t]he employee surrenders his right to seek damages in an action at law in return for swift recovery independent of proof of fault.” Ibid. Pursuant to N.J.S.A. 34:15-8: If an injury or death is compensable under this article, a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for intentional wrong.  In other words, as a matter of law, “while the statute grants absolute immunity to employers from common law negligence suits by employees, Cellucci v. Bronstein, 277 N.J. Super. 506, 518 (App. Div. 1994), it does not preclude an action based on intentional wrongful conduct.  Based on the conduct here, the illegal construction of a unauthorized and illegal trap door hatch in violation of OSHA and BOCA building code requirements, and without any local building department licenses, this is exactly what the deceased’s wife was arguing, intention acts on behalf of the owners and the employer.

Now, while plaintiff’s Law Division complaint alleged intentional wrongful conduct against Hazel Rock, in October 2016 plaintiff and Hazel Rock proceed to conclude her workers compensation case with  a Section 20 settlement pursuant to N.J.S.A. 34:15-20.  This specific section of the workers compensation act provides, in relevant part:       “[A] judge of compensation may with the consent of the parties, after considering the testimony of the petitioner and other witnesses, together with any stipulation of the parties, and after such judge of compensation has determined that such settlement is fair and just under all the circumstances, enter “an order approving settlement.” Such settlement, when so approved, notwithstanding any other provisions of this chapter, shall have the force and effect of a dismissal of the claim petition and shall be final and conclusive upon the employee and the employee’s dependents, and shall be a complete surrender of any right to compensation or other benefits arising out of such claim under the statute.”

Receipt of a lump sum settlement under N.J.S.A. 34:15-20 constitutes an implied acknowledgment that the claimant’s disability was work-related and compensable under the Workers’ Compensation Act.” Sperling v. Bd. of Review, 301 N.J. Super. 1, 5 (App. Div. 1997). In Hawksby v. DePietro, 165 N.J. 58, 66 (2000), our Supreme Court held that a Section 20 settlement barred a subsequent medical malpractice claim against a co-employee doctor. The Court reasoned it would be unfair to hold the employer liable for both common law damages and workers’ compensation liability. Id. at 66-67. A Section 20 settlement “is designed to achieve a complete settlement of all issues for all of the parties concerned.” Univ. of Mass. Mem’l Med. Ctr., Inc. v. Christodoulou, 360 N.J. Super. 313, 320 (App. Div. 2003), rev’d on other grounds, 180 N.J. 334, 349 (2004). We are satisfied that the trial court correctly determined that plaintiff’s Section 20 settlement bars plaintiff from seeking damages from Hazel Rock in an action at law.

Criminal Civil Lawyer

Jeffrey Hark is a New Jersey Civil and Criminal Lawyer.

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