DONALD SERVAIS v. OCEAN WHOLESALE NURSERY, LLC (DIVISION OF WORKERS' COMPENSATION)

• Court: New Jersey Superior Court Appellate Division
• Decided: July 14, 2022
• Docket: A-2988-20
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2988-20

DONALD SERVAIS,

Petitioner-Respondent,

v.

OCEAN WHOLESALE NURSERY, LLC,

Respondent-Appellant. _________________________

Argued June 8, 2022 – Decided July 14, 2022

Before Judges Gilson, Gooden Brown, and Gummer.

On appeal from the New Jersey Department of Labor and Workforce Development, Division of Workers' Compensation, Claim Petition No. 2018-28453.

John H. Geaney argued the cause for appellant (Capehart & Scatchard, PA, attorneys; John H. Geaney and Dana M. Gayeski, of counsel and on the briefs).

Victoria S. Kavanagh argued the cause for respondent (Kavanagh & Kavanagh, LLC, attorneys; Victoria S. Kavanagh, on the brief).

PER CURIAM Ocean Wholesale Nursery LLC (the Nursery) appeals from an order

denying its motion to dismiss Donald Servais's workers' compensation petition

and from a final judgment awarding petitioner Servais $75,516. Because the

compensation judge erred in denying the motion to dismiss, we reverse the order

denying the motion to dismiss and vacate the final judgment.

I.

The Nursery grows and sells landscaping materials. Petitioner worked for

the Nursery for approximately five years. He was a nursery manager. On

January 31, 2017, the parties entered into a "CONFIDENTIAL SETTLEMENT

AGREEMENT AND GENERAL RELEASE" (the Agreement). In the

Agreement, the parties stated they had "concluded their business relationship"

and "wish[ed] to amicably resolve any and all disputes between them, and [were]

entering into this Agreement for the purposes of settling, compromising and

resolving any and all claims that [petitioner] has or may have against the

[Nursery] . . . ."

In consideration of petitioner entering into the Agreement "and in full and

complete satisfaction of any and all of his actual and potential claims against the

[Nursery]," the Nursery agreed to pay him $5,000. In paragraph five of the

Agreement, petitioner agreed that consideration would "constitute the entire

A-2988-20 2 amount of consideration provided to him under this Agreement" and agreed he

would "not seek any further compensation for any other damages, costs,

disbursements or attorneys' fees in connection with any of the matters

encompassed by this Agreement, any aspect of his relationship with the

[Nursery], or otherwise." Petitioner also "acknowledge[d] and agree[d] that, as

of the date he sign[ed] this Agreement, he ha[d] been properly paid for all work

performed for or on behalf of the [Nursery] and ha[d] not sustained any work-

related illness or injuries for which he ha[d] not already filed a claim."

In paragraph six of the Agreement, petitioner released the Nursery from

"any and all actual or potential claims, charges, demands, actions or liabilities

of any kind, known or unknown, which have arisen, or which may arise, by any

reason whatsoever on or before the date upon which [petitioner] signs this

Agreement . . . ."

Paragraph seven of the Agreement is entitled in bold "Exceptions." It

provided:

The release contained in [p]aragraph [six] above does not affect or limit: (i) claims that may arise after the date [petitioner] signs this Agreement; (ii) [petitioner's] right to enforce this Agreement; (iii) [petitioner's] right to receive benefits for occupational injury or illness under the Workers' Compensation Law, or (iv) any other claims that, under controlling law, may not be released by private agreement.

A-2988-20 3 More than twenty months after he had signed the Agreement in which he

represented he had not sustained any work-related injury for which he had not

already filed a claim, petitioner on October 17, 2018, filed an employee claim

petition with the Division of Workers' Compensation. In the petition, petitioner

alleged he had experienced an injury of "right hand three finger amputati on"

while "cutting pallets" on January 26, 2016, more than two years and eight

months before he filed the petition. 1

On January 18, 2019, the Nursery moved to dismiss the petition with

prejudice for lack of jurisdiction, arguing petitioner had failed to file a claim

within the two-year statutory period under N.J.S.A. 34:15-51. The Nursery

included in its motion a copy of the Agreement. The Nursery contended the

Agreement "did not in any way limit petitioner's right to file a workers'

compensation claim against . . . [the] Nursery" and that even though the

"Agreement made clear to petitioner that he could bring a workers'

compensation claim against [the Nursery], petitioner failed to file any claim

petition within the statutory period under N.J.S.A. 34:15-51." The Nursery also

asserted petitioner was an independent contractor, not an employee.

1 In his initial petition, petitioner stated the accident had occurred on January 28, 2016. In an amended petition, he corrected the date to January 26, 2016. A-2988-20 4 Petitioner opposed the motion with a letter brief from his counsel.

Asserting he had been "misled into believing that he was receiving payment on

his workers' compensation claim which was executed on January 31, 2017,"

petitioner contended his claim was timely because he had filed it within two

years of executing the Agreement. Petitioner did not support that assertion with

an affidavit or certification regarding, for example, any misleading statement

made to him. Instead, his counsel relied exclusively on purportedly ambiguous

language in the Agreement, arguing paragraphs five and six of the Agreement

"would reasonably lead [p]etitioner into believing that the $5,000[] was also a

partial payment for his severe work related injury."

Instead of reviewing the Agreement and making a finding as to whether it

was ambiguous as petitioner had argued, the judge of compensation conducted

a four-day hearing, during which petitioner, the Nursery's owner, and the

Nursery's former general manager testified. At the outset, counsel for the

Nursery stated, "all issues remain in dispute including employment and arising

out of and during the course of employment," but that because the statute-of-

limitations issue was jurisdictional, the Nursery was prepared at that time to

proceed "solely on its [m]otion to [d]ismiss for [l]ack of [j]urisdiction."

Petitioner's counsel agreed to those stipulations and argued the payment made

A-2988-20 5 pursuant to the Agreement "represented an unlawful settlement as it was not

approved by a judge of compensation" and "would have tolled the statute for

another two years under our law if it is deemed a payment." The judge

confirmed questioning was limited to "the agreement and the date it was signed

and the date he got a payment."

After the four-day hearing ended, the compensation judge placed a

decision on the record denying the Nursery's motion. The judge recognized

filing a workers' compensation claim concerning a January 26, 2016 injury on

October 17, 2018, "under normal circumstances, would have exceeded the

[s]tatute of [l]imitations by almost nine months and would have resulted in this

[j]udge granting the [Nursery's] motion for dismissal."

The judge found that because the Nursery's attorney had prepared the

Agreement, "any ambiguity should be construed against the [Nursery] and for

the [p]etitioner." The judge posited section (i) of paragraph seven, which

excluded from the Agreement "claims that may arise after the date [petitioner]

signs this Agreement," might "lead . . . [p]etitioner to believe that any incidents

that arose before he signed this [A]greement were included therein." The judge

faulted section (iii) of paragraph seven, which excluded "[petitioner's] rights to

receive benefits for occupational injury or illness under the Workers'

A-2988-20 6 Compensation law," for "not mention[ing] a traumatic injury, which [p]etitioner

surely suffered." He found that omission to be "ambiguous and misleading."

The judge also stated the Agreement "[n]owhere . . . seek[s] to address the loss

of parts of three of the [p]etitioner's fingers," "[i]nform[] him of his right to file

a [w]orkers' [c]ompensation claim and his inability to waive same," or "specify

or address" the out-of-pocket expenses related to the use of his truck and

equipment for which petitioner was seeking reimbursement.

The judge concluded he could "only assume [the Agreement] included any

and all claims, including the loss of [petitioner's] fingers." The judge held the

$5,000 payment made pursuant to the Agreement "included the fingers, and

thereby extended the [s]tatute of [l]imitations." Even though the hearing had

been limited to the Agreement and the statute-of-limitations issue, the judge also

held petitioner was an employee of the Nursery and had lost his fingers at work

and not at home. The judge issued an order on February 18, 2020, denying the

Nursery's motion to dismiss and finding petitioner was an employee of the

Nursery and his injury had "ar[isen] out of and in the course of his employment."

Following the compensation judge's decision denying the motion to

dismiss, the parties proceeded to a trial regarding petitioner's injuries, the extent

A-2988-20 7 of any disability, and the permanency of his impairment. The trial was based on

petitioner's testimony and medical and expert reports.

In a decision placed on the record, the judge held the accident had caused

petitioner to suffer a permanent disability and awarded petitioner $75,516. The

judge found the $5,000 payment pursuant to the Agreement had included $1,000

for the loss of petitioner's fingers. When asked to explain his determination that

$1,000 of the $5,000 payment was for the loss of petitioner's fingers, the judge

stated: "In other words, of the $5,000 agreement, I have assigned $1,000 to the

fact that he lost his fingers. So that's a credit to the [Nursery]." The judge

provided no other explanation and no factual support for his finding. The judge

memorialized his decision in a final judgment, ordering, among other things,

that the Nursery was "entitled to a $1,000[] credit for the portion of the payment

petitioner received pursuant to the . . . Agreement . . . and which this court has

deemed a payment of compensation within the meaning of the Worker's

Compensation Act . . . ."

The Nursery moved for a stay of the judgment pending appeal. The

Nursery argued the judge had erred in extending the statute of limitations, in

deciding the employment and compensability issues based on the first limited

hearing, and in arbitrarily assessing $1,000 of the $5,000 payment "for a never

A-2988-20 8 discussed workers' compensation payment," for which "no evidence was entered

into the record regarding any apportionment and no testimony was elicited

regarding apportionment." In a decision denying the motion, the judge rejected

the Nursery's argument regarding the arbitrariness of his allocation of $1,000 to

the loss of petitioner's fingers, finding "[t]he [A]greement for $5,000 supposedly

just for separation of [p]etitioner from . . . [the] Nursery is against public policy

and [it] would be a tragedy to allow it to stand . . . ."

On appeal, the Nursery argues the compensation judge erred by (1)

misconstruing the $5,000 "employment separation payment" as a worker's

compensation payment; (2) violating the Nursery's due-process rights by

determining petitioner was an employee and that he had been injured in the

course of his employment without holding a proper trial on those issues; and (3)

arbitrarily apportioning the $5,000 payment into a $4,000 employment

separation payment and a $1,000 work injury payment.

II.

Settlement agreements are "governed by basic contract principles, . . .

and, 'absent a demonstration of "fraud or other compelling circumstances,"' a

court should enforce a settlement agreement as it would any other contract."

Capparelli v. Lopatin, 459 N.J. Super. 584, 603-04 (App. Div. 2019) (quoting

A-2988-20 9 Jennings v. Reed, 381 N.J. Super. 217, 227 (App. Div. 2005)). "'[C]ourts should

discern and implement the intentions of the parties[,]' and not 'rewrite or revise

an agreement when the intent of the parties is clear.'" Id. at 604 (quoting Quinn

v. Quinn, 225 N.J. 34, 45 (2016)). "Thus, when the intent of the parties is plain

and the language is clear and unambiguous, a court must enforce the agreement

as written, unless doing so would lead to an absurd result." Ibid. (quoting Quinn,

225 N.J. at 45).

A court should give the parties an "opportunity to illuminate the contract's

meaning through the submission of extrinsic evidence" only if the contractual

language is ambiguous. Ibid. "To the extent that there is any ambiguity in the

expression of the terms of a settlement agreement, a hearing may be necessary

to discern the intent of the parties at the time the agreement was entered and to

implement that intent." Ibid. (quoting Quinn, 225 N.J. at 45).

"Interpretation and construction of a contract is a matter of law for the

court subject to de novo review." Spring Creek Holding Co. v. Shinnihon U.S.A.

Co., 399 N.J. Super. 158, 190 (App. Div. 2008) (quoting Fastenberg v.

Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998)); see also

Capparelli, 459 N.J. Super. at 605. "[W]e accord no special deference to a trial

court's interpretation of an agreement entered into by the parties." Capparelli,

A-2988-20 10 459 N.J. Super. at 605; see also Hager v. M&K Constr., 246 N.J. 1, 13 (2021)

(holding in a workers'-compensation case, "we review the court's legal findings

and construction of statutory provisions de novo").

The Workers' Compensation Act (the Act), N.J.S.A. 34:15-1 to -147,

provides a time-bar for claims seeking compensation in connection with a work-

related accident. N.J.S.A. 34:15-51; see also Sheffield v. Schering Plough

Corp., 146 N.J. 442, 453 (1996). An employee seeking compensation under the

Act for injuries sustained in a work-related accident must submit a petition to

the Division of Workers' Compensation "within two years after the date on

which the accident occurred" unless the employee and employer already

"effected" a settlement of the employee's claim. N.J.S.A. 34:15-51. If "a part

of the compensation has been paid by the employer," the employee must file the

claim "within two years after the last payment of compensation . . . ." Ibid. The

two-year statute of limitations will toll if "the total pattern of conduct [of an

employer] would be likely to lull an injured employee into a false sense of

security which may cause him [or her] to fail to file a timely petition." Witty v.

Fortunoff, 286 N.J. Super. 280, 284 (App. Div. 1996).

In Sheffield, 146 N.J. at 453-55, the Court held an employer's provision

of medical treatment for a work-related injury or arrangement of payment for

A-2988-20 11 that treatment could be considered a "payment of compensation" that delays the

running of the statute of limitations. In Witty, 286 N.J. Super. at 282, after

several months of receiving medical treatment for a work-related injury paid by

his employer's workers' compensation carrier, the petitioner received a letter

from the carrier advising him his condition was not related to his work accident

and the carrier would no longer pay for his medical treatment. We held the

statute ran from the date of the letter, not the date of the accident. Id. at 284.

None of those circumstances was present here. None of them was even

alleged in petitioner's opposition to the Nursery's motion to dismiss. In fact,

petitioner concedes the Nursery did not provide or pay for any of his medical

treatment. His opposition was based entirely on his argument that the

Agreement was ambiguous. Reviewing the Agreement de novo, we perceive no

ambiguity. The plain language of the Agreement expressly excluded petitioner's

workers' compensation claim.

Because petitioner's opposition to the Nursery's motion to dismiss was

based entirely on the alleged ambiguity of the Agreement, the judge erred in

conducting a four-day hearing before deciding whether the Agreement was

ambiguous. After conducting that hearing, he erred in finding the Agreement

ambiguous.

A-2988-20 12 Contrary to petitioner's argument, paragraphs five and six of the

Agreement would not reasonably lead a person to believe that the $5,000

payment under the Agreement was also a partial payment for his work-related

injury because paragraph seven of the Agreement, clearly entitled in bold

"Exceptions," expressly stated that the release in the Agreement did not "affect

or limit" his right to receive benefits for occupational injury under the Workers'

Compensation Law. As alleged by petitioner, the loss of his fingers was an

occupational injury for which he seeks compensation under the Act. Thus, his

claim was clearly and unambiguously excluded under the Agreement. We also

perceive no inconsistency between the language of the Agreement and the

language of the Act, as argued by petitioner. Compare the Agreement

(excluding from the Agreement petitioner's "right to receive benefits for

occupational injury or illness under" the Act), with N.J.S.A. 34:15-7 (providing

an employee with a right to receive "compensation for personal injuries to . . .

[the] employee by accident arising out of and in the course of employment").

The judge's assumption the Agreement "included any and all claims,

including the loss of [petitioner's] fingers" is directly contrary to the express

language of the Agreement excluding certain claims, including workers'

compensation claims. A judge can't "assume" an agreement includes all claims

A-2988-20 13 when it expressly excludes some claims. That section (i) of paragraph seven

excluded from the Agreement "claims that may arise after the date [petitioner]

signs this Agreement" does not render meaningless the other expressly

enumerated exceptions for claims that arose before petitioner signed the

Agreement.

The judge's finding that $1,000 of the $5,000 payment of the agreement

was payment for petitioner's loss of fingers has no basis in the record evidence.

The judge faulted the agreement for not addressing petitioner's loss of his fingers

and for failing to inform petitioner of "his right to file a [w]orkers'

[c]ompensation claim and his inability to waive same." Yet, in the Agreement,

petitioner did not waive his right to file a workers' compensation claim. To the

contrary, in the Agreement, petitioner expressly reserved his right to file a

workers' compensation claim. He just didn't do so timely.

The Agreement was not ambiguous. It clearly excluded workers'

compensation claims and was not a resolution of any workers' compensation

claim. Thus, the $5,000 payment under the Agreement was not related to any

work-related injury and did not have the effect of tolling the two-year statute of

limitations under the Act. Accordingly, we reverse the order denying the motion

to dismiss and vacate the final judgment. Because we reverse the order denying

A-2988-20 14 the motion to dismiss and vacate the final judgment, we need not reach the

Nursery's remaining arguments.

Reversed and vacated. We do not retain jurisdiction.

A-2988-20 15