GEORGE A. WILHELM VS. RYDER LOGISTICS & TRANSPORTATION SOLUTIONS (NEW JERSEY DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT) (CONSOLIDATED)

• Court: New Jersey Superior Court Appellate Division
• Decided: June 21, 2021
• Docket: A-3770-18/A-3792-18/A-3797-18/A-3798-18
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3770-18 A-3792-18 A-3797-18 A-3798-18

GEORGE A. WILHELM,

Petitioner-Appellant, APPROVED FOR PUBLICATION v. June 21, 2021 APPELLATE DIVISION RYDER LOGISTICS & TRANSPORTATION SOLUTIONS and SECOND INJURY FUND,

Respondents-Respondents.

THOMAS H. BOZARTH, SR.,

Petitioner-Appellant,

v.

BURLINGTON COUNTY and SECOND INJURY FUND,

JOSEPH SCHIAZZA,

v. WESTERN OILFIELD SUPPLY and SECOND INJURY FUND,

WILLIAM E. PIERCE, JR.,

CBF TRUCKING and SECOND INJURY FUND,

Argued April 19, 2021 – Decided June 21, 2021

Before Judges Currier, Gooden Brown and DeAlmeida.

On appeal from the New Jersey Department of Labor and Workforce Development, Division of Workers' Compensation, Claim Petition Nos. 1993-59037, 1994-11045, 2002-18766, 2003-23322, and 2006- 33823.

Robert A. Petruzzelli argued the cause for appellants (Jacobs, Schwalbe and Petruzzelli, PC, attorneys; Robert A. Petruzzelli, on the briefs).

Cheryl B. Kline, Deputy Attorney General, argued the cause for respondent Second Injury Fund (Gurbir S. Grewal, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Cheryl B. Kline, on the briefs).

A-3770-18 2 Walter F. Kawalec, III, argued the cause for respondent Ryder Logistics & Transportation Solutions (Marshall Dennehey Warner Coleman & Goggin, PC, attorneys, join in the brief of respondent Second Injury Fund).

Kelly A. Grant argued the cause for respondent Burlington County (Malamut and Associates, LLC, attorneys; Kelly A. Grant, of counsel and on the brief).

Dominick Fiorello argued the cause for respondent Western Oilfield Supply (Styliades & Jackson, attorneys; Dominick Fiorello, on the brief).

Susan Stryker argued the cause for respondent CBF Trucking (Bressler, Amery & Ross, PC, attorneys; Susan Stryker and Michael J. Morris, of counsel and on the brief).

The opinion of the court was delivered by

CURRIER, J.A.D.

In these four back-to-back appeals, we consider whether N.J.S.A. 34:15-

95.5 requires a triennial redetermination of petitioners' combined awards of

state workers' compensation disability benefits and social security disability

benefits (SSD). Because our Legislature did not include a cost-of-living

increase in the statute, and 42 U.S.C. § 424a(d) explicitly states a triennial

redetermination is not applicable in states that calculate their benefits in the

manner New Jersey does, we affirm. Petitioners are not entitled to a

redetermination of benefits.

A-3770-18 3 Petitioners each collect total and permanent disability workers'

compensation benefits and SSD. Pierce and Schiazza's applications for SSD

benefits were on appeal when they received their total disability orders.

Wilhelm's application for SSD benefits was pending. Each final order required

petitioner to "immediately notify the [r]espondent and Second Injury Fund" if

SSD is approved. And "[t]he petitioner shall reimburse the [r]espondent and

the Second Injury Fund for any workers' compensation benefits paid to

[p]etitioner in excess of the offset rate during the period of time [p]etitioner

has received [SSD] . . . ."

After Schiazza, Pierce, and Wilhelm were approved for SSD, the Second

Injury Fund (Fund) moved for reimbursement of the excess benefits pai d prior

to application of the statutory offset. Petitioners opposed reimbursement and

sought a recalculation of their benefit rates to include a triennial

redetermination of their average current monthly earnings (ACE). Bozarth

moved to reopen his case, also seeking a redetermination of his benefits. 1

The cases were consolidated and tried before the judge of compensation

over several dates in 2016 and 2017.

1 Unlike the other petitioners, Bozarth was approved for SSD prior to the entry of the final order. Therefore, the order included the reduced rate according to the reverse offset with benefits calculated until April 2022, when Bozarth turns sixty-two.

A-3770-18 4 The Fund produced Larry Crider as its witness. At the time of trial in

2016, Crider had been the Administrator of Special Compensation Funds for

the New Jersey Department of Labor since 1990. The office administers both

the Fund and the Uninsured Employer's Fund, handles compliance enforcement

for workers' compensation insurance, and operates the discrimination

complaint division.

In 1980, Crider became involved in the processing of calculations for the

Fund under the Workers' Compensation Act in conjunction with the social

security offset under N.J.S.A. 34:15-95.5. At that time, he was working for

the controller's office as an assistant controller when he was tasked to assist

the Division of Workers' Compensation in "implementing . . . the special

adjustment benefits, which included the offsets." Crider worked with

compensation judges Alan Napier and Michael Cunningham.

Crider testified he and the judges agreed that the formula enunciated in

N.J.S.A. 34:15-95.5 requires an offset if the "total of the weekly worker's

compensation benefits and the weekly equivalent of the social security benefit

exceed[s] [eighty] percent of the ACE." The statute did not include any cost-

of-living increases. According to Crider, the legislative history did not reflect

any intent to include a triennial review associated with the offset calculation.

A-3770-18 5 Crider recalled that in 2004 or 2005, an attorney sent a letter to the

Office of Special Compensation Funds inquiring whether petitioners under the

age of sixty-two receiving total and permanent disability and SSD were

entitled to a triennial redetermination of ACE. After receiving the letter, the

Director of the Division of Workers' Compensation, Chief Judge Calderone ,

asked for Crider's input. Crider requested that Glenn Sklar, the Associate

Commissioner of Disability Programs at the Social Security Administration,

provide clarification whether a triennial redetermination of ACE was

applicable in reverse offset states. Crider also conducted his own research.

In Sklar's response to Crider's query, the Associate Commissioner

confirmed that Social Security was precluded from taking a reduction in SSD

in a reverse offset state. In addition, the Social Security operations manual

instructed that a reverse offset existed for permanent total disability and

subsequent Fund benefits in New Jersey.

Crider concluded that N.J.S.A. 34:15-95.5 did not support a triennial

redetermination. He also noted that 42 U.S.C. § 424a(d) specifically excluded

a reverse offset state from performing a triennial redetermination.

During his trial testimony, Crider also explained the method for

calculating the offset for each of the petitioners' awards and stated the

calculations were accurate and in compliance with N.J.S.A. 34:15-95.5.

A-3770-18 6 Petitioners presented Alan Polonsky as a witness – an attorney with

thirty years of experience handling Social Security benefits claims. Polonsky

was a staff attorney at the Social Security Administration Office of Hearing

and Appeals for approximately ten years, where he drafted decisions for an

administrative law judge determining whether individuals were disabled. He

left that position in 1987 and entered private practice where he began

representing social security claimants, primarily litigating disability

determinations, eligibility for benefits, and verifying whether the benefits are

being properly paid. Polonsky said he uses a computer application to calculate

benefits.

Polonsky agreed he had no experience drafting social security legislation

or promulgating rules for the Social Security Administration or in the workers'

compensation arena. He admitted he did not handle workers' compensation

cases and had limited involvement in the application of the workers'

compensation statutes.

Polonsky testified similarly to Crider regarding the calculation of

benefits when a petitioner is receiving both SSD and workers' compensation

benefits. He confirmed that if the total benefits exceed what the petitioner

earned before becoming disabled, the benefits award is capped at eighty

percent of the petitioner's earnings before they became disabled – the ACE.

A-3770-18 7 He explained the cap was in place to ensure petitioners were not making more

money than they did pre-disability so that petitioners would not be dissuaded

from returning to the workforce.

Polonsky likened the triennial redetermination of the ACE to a cost-of-

living adjustment. He also explained that reverse offset meant "that instead of

the Social Security Administration reducing the Social Security benefits, the

Social Security Administration pays the full benefit they would pay, and the

insurance carrier is the one that gets the benefit of the reduction in payment."

In a reverse offset state, the workers' compensation benefits are reduced, not

the SSD.

Polonsky conceded he had never seen a triennial redetermination applied

to a petitioner under age sixty-two who was receiving New Jersey total

disability and permanent workers' compensation benefits. And he agreed that

because New Jersey is a reverse offset state, triennial redetermination would

not be applicable.

In a comprehensive, well-reasoned oral decision issued December 13,

2018, the judge of compensation found N.J.S.A. 34:15-95.5 did not compel a

triennial redetermination of ACE to a person collecting permanent workers'

compensation benefits and SSD. The compensation court noted N.J.S.A.

34:15-95.5 did not mention a triennial redetermination of ACE. Nor did the

A-3770-18 8 legislative history accompanying the statute. Therefore, the judge of

compensation concluded the Legislature did not intend either a cost-of-living

increase or a triennial redetermination. The judge discerned no conflict

between federal and state law and stated that "N.J.S.A. 34:15-95.5 supersedes

and takes precedence over the manner that New Jersey is to interpret its own

statute."

The compensation court relied on several authorities in reaching its

determination. One of the authorities was the Social Security Administration's

program operations manual system, which contains the Social Security

Administration's policies. The manual advises that a reverse offset exists in

New Jersey for claimants receiving permanent total disability workers '

compensation benefits and SSD. In addition, the compensation court noted the

portion of Sklar's letter which stated: "[A] Triennial Redetermination of ACE

is unnecessary prior to the age of [sixty-two] because full disability insurance

benefits are already being paid due to the reverse offset provisions, therefore,

there is no offset applied."

The compensation court found petitioners did not present any controlling

authority to support their claim that 42 U.S.C. § 424a(f) mandated New Jersey

to conduct a triennial redetermination of ACE. To the contrary, the court

found petitioners disregarded the provision in 42 U.S.C. § 424a(d) stating that

A-3770-18 9 triennial redetermination of ACE is not applicable in reverse offset states such

as New Jersey.

The compensation court denied petitioners' motions for a triennial

redetermination and granted respondents' and the Fund's motions for the SSD

offset and for reimbursement of any overpayments.

On appeal, petitioners renew their argument that they are entitled to a

triennial redetermination of ACE under N.J.S.A. 34:15-95.5 until they reach

the age of sixty-two. They contend the statute does not comply with 42 U.S.C.

§ 424a(f).

The Fund raises a procedural bar, contending petitioners are precluded

from asserting the triennial redetermination issue because it was not presented

prior to the entry of their total disability awards. In addition, respondents all

assert there is no support in the statutory language or legislative history of

N.J.S.A. 34:15-95.5 for a triennial redetermination of ACE.

Although counsel discussed the procedural bar with the judge of

compensation during oral argument, the court did not address the issue in its

decision.

An order approving settlement is final and bars "any subsequent action

or proceeding, unless reopened by the Division of Workers' Compensation or

appealed . . . ." N.J.S.A. 34:15-58. The right to reopen a matter is established

A-3770-18 10 in N.J.S.A. 34:15-27, which provides that "a formal award, determination,

judgment, or order approving settlement may be reviewed within two years

from the date when the injured person last received a payment on the ground

that the incapacity of the injured employee has subsequently increased." Ibid.

A judgment or award also may be re-opened "at any time on the ground that

the disability has diminished." Ibid.

Here, petitioners were awarded total and permanent disability benefits

through orders approving settlements. Bozarth and Wilhelm have collected

benefits since 2003 and 2004 respectively. Schiazza and Pierce began

collecting benefits in 2009 and 2010. None of the petitioners raised the

triennial redetermination issue prior to the entry of their total and permanent

disability awards. Nor have any of the petitioners argued their disability has

subsequently increased or diminished.

Although it is evident petitioners do not meet the statutory criteria to

reopen their cases, we nonetheless address the substantive issue petitioners

present as it is an issue of first impression in this state.

When reviewing a workers' compensation decision, we are required to

determine whether the "findings reasonably could have been reached on the

basis of sufficient credible evidence in the record, with due regard to the

agency's expertise." Wood v. Jackson Twp., 383 N.J. Super. 250, 253 (App.

A-3770-18 11 Div. 2006). We afford deference to an agency's expertise and knowledge in its

field but will not defer if the agency's statutory interpretation is inaccurate or

contrary to the legislature's intent. Caminiti v. Bd. of Trs., 431 N.J. Super. 1,

14 (App. Div. 2013). The party challenging the decision bears the burden to

prove the decision was not based on sufficient credible evidence. In re Protest

of Coastal Permit Program Rules, 354 N.J. Super. 293, 330 (App. Div. 2002).

When interpreting a statute, the primary purpose is to discern the

Legislature's intent. Kocanowski v. Twp. of Bridgewater, 237 N.J. 3, 9 (2019).

The best method to determine the intent is to consider the statute's plain

language, ascribing to the words their ordinary meaning when viewed as a

whole. DiProspero v. Penn, 183 N.J. 477, 492 (2005). The function of the

court is not to re-write the statute, presume the intent of the legislature, or add

qualifications, but rather "to construe and apply the statute as enacted." Ibid.

(quoting In re Closing of Jamesburg High Sch., 83 N.J. 540, 548 (1980)). If

the statute is susceptible to more than one plausible interpretation, leads to an

absurd result, or is at odds with the plain language, courts may turn to extrinsic

aids such as "legislative history, committee reports, and contemporaneous

construction." Id. at 492-93 (quoting Cherry Hill Manor Assocs. v. Faugno,

182 N.J. 64, 75 (2004)).

A-3770-18 12 Under 42 U.S.C. § 424a, a petitioner is limited to the amount they can

simultaneously collect from SSD and state workers' compensation benefits. If

the combined total monthly amount of SSD and state workers' compensation

benefits exceeds eighty percent of the petitioner's pre-disability ACE earnings,

SSD is reduced. The reduction of SSD is known as the social security offset.

Social Security receives the benefit of the offset. Woods, 383 N.J. Super. at

254.

However, a handful of states, including New Jersey, enacted laws

authorizing the reduction of the workers' compensation award instead of SSD

when determining the simultaneous collectability of benefits. These states are

known as reverse offset states. Therefore, in New Jersey, the employer,

workers' compensation insurer, and Fund receive the benefit of the offset, not

Social Security.

The Omnibus Budget Reconciliation Act of 1981 prevented additional

states from enacting reverse offset legislation. 42 U.S.C. § 424a (1981).

However, it permitted states which had enacted reverse offset provisions on or

before February 18, 1981 to keep the reverse offset in effect. Ibid. New

Jersey was one such state.

A-3770-18 13 As stated, in 1980, the New Jersey Legislature amended the workers'

compensation statute and adopted the reverse offset provision. N.J.S.A. 34:15 -

95.5 states:

For persons under age [sixty-two] receiving benefits as provided under R.S. 34:15-95.5, or R.S. 34:15- 12(b), and whose period of disability began after December 31, 1979, such compensation benefits shall be reduced by an amount equal to the disability benefits under the Federal Old-Age, Survivors' and Disability Insurance Act, as now or hereafter amended, not to exceed the amount of the reduction established pursuant to 42 U.S.C. 424a. However, such reduction shall not apply when the combined benefits provided under R.S. 34:15-95, or R.S. 34:15- 12(b), and the Federal Old-Age, Survivors' and Disability Insurance Act is less than total benefits to which the Federal reduction would apply, pursuant to 42 U.S.C. 424a.

As explained by Crider and Polonsky, under the statute, an individual in New

Jersey receiving permanent total disability or Fund benefits, whose disability

benefits began after December 31, 1979, is subject to the reverse offset until

the person reaches the age of sixty-two.2 The statute does not include a

triennial redetermination of benefits.

42 U.S.C. § 424a(f) provides for a redetermination of the social security

offset every three years. This triennial redetermination is akin to a cost -of-

2 After a petitioner turns sixty-two, Social Security takes the offset until the petitioner is sixty-seven years old. Thereafter, the offset is no longer in effect and a petitioner keeps the full amount of the benefits. 42 U.S.C. § 424a(a) . A-3770-18 14 living adjustment to raise the eighty percent cap every three years using a ratio

established by the Commission of Social Security based on the national

average wage index.

Petitioners contend our Legislature intended to adopt the federal

triennial redetermination provision. However, the plain language of N.J.S.A.

34:15-95.5 does not include a redetermination of benefits. And the legislative

history is similarly silent. See Sponsor's & Lab. Comm. Statement to A. 1206

1-17 (L.1980, c. 83).

Moreover, the federal statute acknowledges the reverse offset states and

precludes a social security offset for those states. 42 U.S.C. § 424a(d) creates

an exception to the social security offset for reverse offset states. See Ries v.

Harry Kane, Inc., 195 N.J. Super. 185, 197 (App. Div. 1983).

Our Legislature did not include any redetermination of benefits or cost-

of-living provision in N.J.S.A. 34:15-95.5, nor has it amended the controlling

statute in the forty years since its enactment. It is not this court's province to

rewrite a statute contrary to its plain meaning. Perrelli v. Pastorelle, 206 N.J.

193, 200 (2011).

Moreover, Crider and Polonsky agreed the offset is in place to limit a

petitioner's benefits so a totally disabled petitioner cannot earn more than his

or her pre-injury income. This counters the argument that the Legislature

A-3770-18 15 intended to include a cost-of-living increase. In addition, as we have

previously noted, the Fund's resources are limited. We would not impose

additional financial obligations absent a legislative mandate to do so. See

McAllister v. Resorts Int'l Hotel & Casino, 299 N.J. Super. 199, 202-03 (App.

Div. 1997).

There is no conflict between federal and state law. Under the Omnibus

Budget Reconciliation Act of 1981, Congress and the Social Security

Administration confirmed that § 424a did not preempt a state's workers'

compensation act. 42 U.S.C. § 424a. In addition, the Supreme Court has

clarified that if there is any overlap between a federal disability insurance

program and a state workers' compensation program, "workmen's

compensation programs should take precedence in the area of overlap."

Richardson v. Belcher, 404 U.S. 78, 82 (1971).

In sum, it is clear from a review of the plain language of N.J.S.A. 34:15 -

95.5 and 42 U.S.C. § 424a that a triennial redetermination of ACE is not

applicable in New Jersey as a reverse offset state. As petitioners have not

presented this court with any concrete legal or legislative grounds upon which

to overturn the compensation judge's order, we affirm the order denying a

redetermination of benefits and for reimbursement of overpayment of benefits.

Affirmed.

A-3770-18 16