(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
LODEAN SHEFFIELD V. SCHERING PLOUGH CORPORATION, ET AL. (A-84-95)
Argued January 30, 1996 -- Decided August 9, 1996
STEIN, J., writing for a majority of the Court.
This appeal arises from a workers' compensation case. Lodean Sheffield worked for Schering
Plough Corporation (Schering) for over twenty-three years in positions that required repeated bending and
lifting. In July 1983, Sheffield had to stop working because of a disabling back condition. She did not file a
claim for workers' compensation benefits until five and one-half years after her back injury rendered her
unable to work.
The Workers' Compensation Act (Act) establishes time limits for the filing of workers'
compensation claim petitions. In the case of occupational disease, the Act provides that the claimant must
file a petition for benefits within two years after the date of which the claimant first knew the nature of the
disability and its relation to the employment. The Act further provides that if part of a compensation has
been paid by the employer, the claim is barred unless filed within two years after the last payment of
compensation.
From 1983 through the start of this litigation, Sheffield received private-plan disability benefits and
private-plan medical benefits from Schering's insurers. In February 1989, Sheffield filed two workers'
compensation claim petitions alleging occupational injuries involving her back, lungs, stomach, internal
organs, and nervous system. The Division of Workers' Compensation (Division or workers' compensation
judge) found that Sheffield's back injuries were causally related to her employment at Schering and that she
was disabled as a result of those injuries. However, the Division dismissed her claim for back-related
disability because it was time-barred. The Division dismissed Sheffield's other claims as not compensable.
In dismissing her claims, the workers' compensation judge concluded that Sheffield was made aware, through
Schering's Benefits Department, of the distinction between workers' compensation benefits and long-term
disability benefits and that this was not a situation where the company was paying long-term disability and
medical benefits and lulling her into a false sense of security that she was receiving workers' compensation
benefits. Because all of Sheffield's claims for workers' compensation benefits had been dismissed, the
workers' compensation judge also dismissed Sheffield's claim for Second Injury Fund benefits.
The Appellate Division affirmed in an unpublished opinion. The Supreme Court granted Sheffield's
petition for certification.
HELD: The private plan disability and medical benefits provided to Lodean Sheffield pursuant to Schering
Plough Corporation's scheme of compensation for disabled employees constituted payments of
compensation within the meaning of the Workers' Compensation Act. Because Sheffield filed her
claim petitions within two years of receiving payments constituting payments of compensation under
the Act, the court erred in dismissing her petitions as time barred.
1. Where medical treatment that could have been required under the Act is actually furnished by the employer, such treatment is considered payment of compensation and a claim petition filed within two years of such payment is timely filed. Medical treatment need not be furnished directly by the employer to constitute compensation under the Act. A payment or agreement to pay by the employer's insurance carrier is deemed payment by the employer. A claim petitioner may not be barred from the benefits of the Act if
the conduct of the employer has created a situation designed to provide a false sense of security to the
injured employee. (pp. 12-18)
2. There was credible evidence in the record to support the determination by the Division that more than
two years prior to the filing of Sheffield's claim for workers' compensation benefits, she knew or should have
known the nature of her back injury and its relation to her employment. As such, Sheffield's claim petitions
were filed out of time. The statutory language contemplates actual knowledge of the nature of the disability
and its relation to the employment. Nevertheless, Sheffield's awareness of the nature of her injury and its
relationship to her employment is not dispositive of this appeal because the statutory limitations period was
tolled by the payment of compensation to Sheffield. (pp. 19-20)
3. The medical benefits Sheffield received from Schering's private plan insurers were in the nature of
payments of compensation for medical treatments that could have been required under the Act to treat and
cure her back injury. In respect of disability payments, the majority rule is that such payments also toll the
statutory limitations period if the employer is aware of the existence of the work-related injury and the
employee reasonably would have understood that the payments constituted, wholly or in part, compensation
for an injury compensable under the Act. The precise source of payment is irrelevant; because of Schering's
direct involvement in inducing its health-insurance carrier to pay for medical expenses incurred by Sheffield
for her work-related injuries, the fact that those payments were made by a health-insurance carrier rather
than a workers' compensation carrier is irrelevant. What is critical is that the payment to the injured
employee could have been compelled under the Act to compensate that employee for the work-related
injury. It need not be determined whether or to what extent employers assume an affirmative obligation to
inform their employees of the availability of workers' compensation benefits. (pp. 20-24)
4. The workers' compensation judge's determination in respect of Sheffield's pulmonary-disability claim was
based on sufficient credible evidence and must be upheld. Moreover, Sheffield's contention that the Division
should have required respondents to furnish her with the trial transcripts that she was obligated to provide
on appeal is without merit. (pp. 24-25)
5. Liberty Mutual contends that, as a prior insurance carrier, it is not liable on Sheffield's claims of
occupational disability, regardless of the disposition of this appeal. The Second Injury Fund also asserts that
it is not liable on those claims. Neither the Division nor the Appellate Division addressed either of those
contentions and respondents did not file cross-petitions for certification. Therefore, those contentions are
not properly before this Court. (p. 25)
Judgment of the Appellate Division is REVERSED in part and AFFIRMED in part. The matter is
REMANDED to the Division of Workers' Compensation for the imposition of an appropriate award of
workers' compensation benefits.
JUSTICE POLLOCK, dissenting, is of the view that, to reach its result, the majority ignores the
finding of the workers' compensation judge that Sheffield knew the difference between workers'
compensation benefits and the private plan benefits. It also ignores the judge's findings that Sheffield had
accepted payments under the private plans and that Schering did not mislead Sheffield regarding the
availability of workers' compensation benefits. The majority's opinion could discourage employers from
buying health insurance to pay medical and disability benefits for employees, and extends the employer's
exposure for liability in workers' compensation beyond the period contemplated by the Legislature.
JUSTICES HANDLER, O'HERN and COLEMAN join in JUSTICE STEIN's opinion. JUSTICE
POLLOCK filed a separate dissenting opinion. JUSTICE GARIBALDI did not participate.
SUPREME COURT OF NEW JERSEY
A-
84 September Term 1995
LODEAN SHEFFIELD,
Petitioner-Appellant,
v.
SCHERING PLOUGH CORPORATION,
TRAVELERS INSURANCE COMPANY,
LIBERTY MUTUAL INSURANCE CO., and
THE SECOND INJURY FUND,
Respondents-Respondents.
Argued January 30, 1996 -- Decided August 9, 1996
On certification to the Superior Court,
Appellate Division.
Samuel E. Bass argued the cause for appellant
(Freeman & Bass, attorneys).
Charles N. Martel argued the cause for
respondent Schering Plough Corporation
(Travelers Insurance Company) (Robert W.
Frieland, attorney).
Edward C. Denner, Jr., submitted a letter in
lieu of brief on behalf of respondent
Schering Plough Corporation (Liberty Mutual
Insurance Company) (Robert G. Bressler,
attorney).
Dolores M. McNamee, Deputy Attorney General,
submitted a letter in lieu of brief on behalf
of respondent Second Injury Fund (Deborah T.
Poritz, Attorney General of New Jersey,
attorney).
The opinion of the Court was delivered by
STEIN, J.
This is a workers' compensation case. Petitioner, Lodean
Sheffield, worked for respondent Schering Plough Corporation for
over twenty years in positions that required repeated bending and
lifting. In July 1983, Sheffield ceased work because of a
disabling back condition. She did not file a claim for workers'
compensation benefits until five and a half years after her back
injuries rendered her unable to work.
The Workers' Compensation Act (Act), N.J.S.A. 34:15-1 to -128, establishes time limits for the filing of workers'
compensation claim petitions. In cases of occupational disease,
the Act provides that
where a claimant knew the nature of the
disability and its relation to the
employment, all claims for compensation for
compensable occupational disease . . . shall
be barred unless a petition is filed . . .
within 2 years after the date on which the
claimant first knew the nature of the
disability and its relation to the
employment.
The Act further provides that if "a part of the compensation has
been paid by [the] employer," the claim is barred unless filed
"within 2 years after the last payment of compensation." Ibid.
From 1983 through the commencement of this litigation,
Sheffield received private-plan disability benefits and private-plan medical benefits from Schering Plough's insurers. In
February 1989, Sheffield filed two workers' compensation claim
petitions alleging occupational injuries involving her back,
lungs, stomach, internal organs, and nervous system. The
Division of Workers' Compensation (the Division) found that
Sheffield's back injuries were causally related to her employment
at Schering Plough and that she is disabled as a result of those
injuries, but dismissed her claim for back-related disability as
time-barred. The Division dismissed Sheffield's other claims as
not compensable. The Appellate Division affirmed in an
unpublished opinion. We granted Sheffield's petition for
certification,
142 N.J. 454 (1995), primarily to consider whether
Sheffield's claims were filed within time.
Lodean Sheffield worked for Schering Plough Corporation from the early 1960s until mid-1983. She first worked as a matron, cleaning bathrooms at the company's Union, New Jersey, facility. The work required frequent bending and stooping and involved the daily use of chemicals and cleaning agents such as ammonia. After five or six years, Sheffield became employed as a machine operator and chemical inspector in one of Schering's pharmaceutical laboratories. The inspector job entailed lifting heavy cartons of chemicals off the floor, carrying the cartons a distance of three to five feet, and then placing the cartons onto a bench for inspection. After inspecting each carton, Sheffield was required to lift it off the bench and set it down on the floor again. The cartons weighed approximately seventy-five to eighty pounds each, and Sheffield would lift and inspect fifteen or twenty of the cartons each day. At trial, Sheffield described
the work pace as "go, go, go, go, go. Just steady, steady,
steady, steady. You don't have time to do [anything] but pick it
up and keep going and keep moving." As a machine operator,
Sheffield put stoppers into medicine bottles as the bottles
passed through an automated machine and then placed the bottles
on trays stacked from the floor up to five feet high. That work,
also, involved repeated bending and lifting.
Sheffield began experiencing back problems in 1979, when she
was treated for a back sprain and displaced disc. She returned
to work with restrictions on lifting, pushing, and pulling. In
1980, Sheffield reported back pain to the company nurse. She
informed the nurse that she had injured her back lifting boxes on
the job. The nurse referred Sheffield to a chiropractor, who
treated Sheffield for a period of time. Because Sheffield's back
pain was not relieved, the chiropractor referred her to an
internist, who admitted her to a hospital and called in Dr.
Prada, a neurosurgeon, to consult on Sheffield's case. Dr. Prada
determined that Sheffield needed back surgery.
From March to June 1983, Sheffield was out of work on
temporary disability leave and received disability benefits from
Prudential Insurance Company, Schering's private-plan disability
insurer. Sheffield returned to work in mid-June, with
restrictions on lifting. She worked for approximately three
weeks and then went back on temporary disability leave in early
July. Dr. Prada operated on Sheffield in July, performing a
laminectomy and removing an extruded disc. Sheffield began
receiving short-term disability payments from Prudential in
September 1983 to supplement her temporary disability benefits.
In September 1983, Emily Androtti-Consone of Schering's
Benefits Department sent Sheffield a memorandum instructing her
to apply for long-term disability benefits from Travelers
Insurance Company, Schering's private-plan, long-term disability
insurer, and also to file for Social Security benefits.
Schering's policy was to provide disabled employees with short-term benefits for up to twenty-six weeks and then to provide
long-term benefits, offset by Social Security benefits.
Sheffield filed for long-term benefits in accordance with
company policy. In January 1984, Sheffield began receiving long-term disability coverage from Travelers. Sheffield also filed
for Social Security benefits, but her claim was denied. She
subsequently consulted an attorney and filed a second claim for
Social Security benefits, but that claim was denied as well.
In March 1984, Schering's Employee Relations Manager
informed Sheffield by letter that she was entitled to six months
of job protection and thereafter would be considered on
"conditional leave." The letter also stated that Sheffield would
"continue to receive disability benefits and have group insurance
coverage as long as [she was] disabled."
Sheffield received regular medical treatments from Dr. Prada
in 1984, 1985, 1986, and 1987. In July 1988, Dr. Prada
readmitted Sheffield to the hospital for additional surgery to
relieve recurrent, severe back pain and numbness and to remove
scar tissue from the 1983 surgery. Following the surgery, Dr.
Prada continued to treat Sheffield on a regular basis and was
still treating her in 1991 at the time of trial. Sheffield filed
a new application for Social Security benefits after her 1988
operation. That claim was approved and she received an award of
benefits. At Travelers' request, however, Sheffield remitted a
large portion of her Social Security award to the insurer to
reimburse it for the long-term disability payments it had made to
her.
In addition to receiving disability payments, Sheffield also
received medical benefits from Schering's insurers. Throughout
her course of treatment for her back condition and continuing
through the time of trial, Sheffield's medical expenses were paid
by Schering's health insurance carriers, first Prudential and
later John Hancock. Sheffield made the required co-payments.
Schering's personnel records reveal that, on a number of
occasions, Prudential delayed or denied payment of Sheffield's
claims for medical benefits on the ground that the claims should
have been submitted to a workers' compensation provider rather
than to Prudential, a health insurance provider. In August 1983,
Prudential informed Schering that it would not pay Sheffield's
claim for medical expenses for orthopedic services provided by a
Dr. Botwin, an orthopedic osteopath, because the claim form
indicated that the "[c]harges incurred [were] due to a work-related injury or illness." Prudential further informed Schering
that the claim "should be submitted to your Workers Compensation
carrier." In response, Schering's Employee Health Services
Department advised Schering's Benefits Department that Dr.
Botwin's medical bill was "not job related" and should be
resubmitted to Prudential with a letter stating that the claim
was not a workers' compensation claim and should be paid.
In late 1986, Sheffield's husband met with Androtti-Consone
and her supervisor, Karen Custack, to discuss Sheffield's medical
benefits, in part because Prudential by that time had denied
coverage on a large number of Sheffield's claims. Prior to the
meeting, Androtti-Consone had telephoned Prudential and learned
that the claims were not being paid because Sheffield had
indicated on the claim forms that her injuries were work-related.
At the meeting, Androtti-Consone explained to Mr. Sheffield that
Prudential would continue to deny the claims if Sheffield
persisted in describing the injuries as work-related. Following
their discussion, it was decided that Androtti-Consone would
contact Prudential to advise the insurer that Sheffield's back
condition was not work-related and that the medical claims should
be paid. Neither Androtti-Consone nor Custack discussed with Mr.
Sheffield the availability of workers' compensation benefits.
In February 1989, Sheffield filed two claim petitions
against Schering Plough for workers' compensation benefits. The
first petition alleged that Sheffield was afflicted with
occupational disabilities involving her "chest, lungs, nose,
throat, back, . . . stomach, . . . internal organs, [and] nervous
system, . . . and complications arising therefrom." The petition
also alleged that Sheffield's injuries were caused by
"[o]ccupational exposure to chemicals[,] dust, fumes, bending,
lifting, adverse environment, stress, [and] strain." The second
petition alleged that a workplace accident in June 1983 -- caused
by "[l]ifting heavy boxes from floor to conveyor" -- had resulted
in injury to Sheffield's back and nervous system. Both claim
petitions alleged that "Petitioner has received treatment from
the respondent within [two] years from this date." Schering's
workers' compensation carrier, Travelers, filed answers to the
claim petitions and invoked the affirmative defense of the
statute of limitations.
In October 1989, Sheffield filed an application for benefits
from the Second Injury Fund, see N.J.S.A. 34:15-94 to -95.5,
alleging that she was totally and permanently disabled "as a
result of a combination of [her] pre-existing conditions [and
her] last compensable conditions." The Workers' Compensation
judge joined the Second Injury Fund as a party respondent.
At trial, Sheffield indicated that she had injured her back
in a work-related accident in either 1980 or 1981, rather than in
1983 as originally alleged in her claim petition. She testified
that she did not recall specifically when the accident occurred,
but believed that it happened about two years before she stopped
working, while lifting boxes at work. Respondent Travelers
therefore moved to join Liberty Mutual Insurance Company as a
party respondent, as Schering's workers' compensation carrier at
the time that Sheffield first manifested a compensable
disability. Liberty Mutual had provided workers' compensation
coverage to Schering until June 1982, and Travelers provided the
coverage thereafter.
Eight medical experts testified at trial. It was undisputed
that Sheffield is disabled by her back condition and that that
disability is due at least in part to the repeated bending and
lifting she performed while employed by Schering.
In respect of Sheffield's pulmonary-disability claim,
however, although all the experts agreed that Sheffield's latest
lung function tests were consistent with partial pulmonary
disability, they did not agree that Sheffield's severe bronchitis
was causally related to her employment at Schering. Sheffield
testified that the air in the laboratory where she had worked had
been stuffy from the chemical fumes, dust, and lack of windows.
She further testified that the dust and fumes had made her cough
and caused her to be short of breath and that she continues to
have breathing difficulties and coughing episodes. Sheffield's
testimony was corroborated by Schering's personnel records, which
documented a history of recurrent bronchitis and upper
respiratory infections beginning in 1973 and continuing
throughout much of Sheffield's employment.
Sheffield's expert, Dr. Friedman, testified that, in his
medical opinion, Sheffield suffers from severe, chronic
occupational bronchitis attributable to her exposure to
chemicals, fumes, dust, and dirt while working at the Schering
plant. Schering's expert, Dr. Lewis, disagreed with that
characterization of Sheffield's condition. He testified that
Sheffield suffers from severe, chronic asthmatic bronchitis
unrelated to employment. Dr. Lewis based his opinion on the fact
that his examination of Sheffield in 1990 did not reveal any
pulmonary disease or disability, while his examination of
Sheffield in 1992 revealed severe asthma. He also testified that
he had reviewed the records of Sheffield's September 1991
hospitalization for shortness of breath, which indicated that
"[t]here was no previous history of asthma." Dr. Lewis concluded
that the onset of Sheffield's pulmonary disability occurred after
1990 and that the disability had "no conceivable relationship" to
Sheffield's prior employment at Schering.
The Division of Workers' Compensation issued an oral opinion
dismissing all of Sheffield's claims. In respect of Sheffield's
back-injury claim, the Division determined that although there
was insufficient evidence of a specific work-related accident,
sufficient evidence demonstrated that "if [Sheffield's] back
[condition] was not caused by her work, it could very well have
been accelerated, exacerbated or aggravated by her working
conditions." The Division concluded that Sheffield has a
"serious orthopedic and neurological disability arising out of
her employment with Schering Plough."
Nevertheless, the Division determined that Sheffield's back-injury claim was barred because Sheffield had failed to file for
workers' compensation benefits within two years after she first
"knew or should have known that she had an accident that occurred
out of employment." The Division further concluded that
Sheffield was "made aware [of] the distinction [between] Workers'
Compensation Benefits and long-term disability benefits," and
that "[t]his [was] not a situation where the company was paying
long-term disability and medical benefits, and therefore lulling
the petitioner into a false sense of security that she was
receiving Workers' Compensation Benefits."
In respect of Sheffield's claim of pulmonary disability, the
Division determined that Sheffield's condition was not causally
related to her employment with Schering Plough. The Division
noted that there was no evidence of significant pulmonary
problems in Sheffield's medical records from 1983 through 1990
and that Sheffield's severe pulmonary disability arose after
1990. The Division also dismissed Sheffield's claims for
gastrointestinal disease and hypertension, finding that,
concerning the former, Sheffield had failed to prove disability,
and concerning the latter, Sheffield had failed to prove
causation.
Because all of Sheffield's claims for workers' compensation
benefits had been dismissed, the Division also dismissed
Sheffield's claim for Second Injury Fund benefits.
The Appellate Division affirmed in an unpublished opinion,
substantially for the reasons expressed by the Division of
Workers' Compensation. The Appellate Division was satisfied that
the findings and conclusions of the Workers' Compensation judge
were supported by sufficient credible evidence in the record.
The Workers' Compensation Act provides that, in the case of
occupational disease claims,
there shall be no time limitation upon the
filing of claims for compensation . . . ;
provided, however, that where a claimant knew
the nature of the disability and its relation
to the employment, all claims for
compensation for compensable occupational
disease except as herein provided shall be
barred unless a petition is filed in
duplicate . . . within 2 years after the date
on which the claimant first knew the nature
of the disability and its relation to the
employment; provided further, that in case an
agreement of compensation for compensable
occupational disease has been made between
such employer and such claimant, then an
employee's claim for compensation shall be
barred unless a petition for compensation is
duly filed . . . within 2 years after the
failure of the employer to make payment
pursuant to the terms of such agreement; or
in case a part of the compensation has been
paid by such employer, then within 2 years
after the last payment of compensation. . . .
A payment or agreement to pay by the
insurance carrier shall, for the purpose of
this section, be deemed a payment or
agreement by the employer.
The Act establishes a similar time bar for claims that seek
compensation following a work-related accident:
Every claimant for compensation . . .
shall . . . file a petition . . . within 2
years after the date on which the accident
occurred, or in case an agreement for
compensation has been made between the
employer and the claimant, then within 2
years after the failure of the employer to
make payment pursuant to the terms of such
agreement; or in case a part of the
compensation has been paid by the employer,
then within 2 years after the last payment of
compensation . . . . A payment, or agreement
to pay by the insurance carrier, shall for
the purpose of this section be deemed payment
or agreement by the employer.
"It is manifest that a cogent object of
the provision [that permits the filing of a
claim within two years after the last payment
of compensation] is to prevent employers and
their insurers from lulling the injured
employee into a false assumption of security
and consequential inaction and tardiness by
means of voluntary assistance."
[De Asio v. City of Bayonne,
62 N.J. Super. 232, 236 (App. Div.) (quoting Riccioni v.
American Cyanamid Co.,
26 N.J. Super. 1, 6
(App. Div.), certif. denied,
13 N.J. 289
(1953)), certif. denied,
33 N.J. 386 (1960);
accord Schwarz v. Federal Shipbuilding & Dry
Dock Co.,
16 N.J. 243, 248, 250 (1954); Witty
v. Fortunoff,
286 N.J. Super. 280, 284 (App.
Div. 1996).
"The employee may well believe that he need not consult an
attorney or take any legal action so long as the employer is
voluntarily attempting to heal the injuries or otherwise
voluntarily paying compensation." Mangieri v. Spring Tool Co.,
68 N.J. Super. 211, 220 (Law Div. 1961).
Thus, "on the theory that the furnishing of any kind of
benefit required by compensation law indicates an acceptance of
liability and thus satisfies the policy of the 'last payment'
clause," the furnishing of medical benefits is generally held to
extend the time for filing a claim. 2B Arthur Larson, The Law of
Workmen's Compensation § 78.43(h), at 15-272.33 to .45 (1988)
(citing cases). Any other result would open the door "to
unscrupulous employers to lull injured employees into a sense of
security until their remedy under the Workmen's Compensation Act
has been lost to them by passage of time." Fischbein v. Real
Estate Management, Inc.,
131 N.J.L. 495, 498 (Sup. Ct. 1944),
aff'd o.b.,
132 N.J.L. 418 (E. & A. 1945).
We have often noted the well-established principle that "the
furnishing of medical treatment is in the nature of compensation
and constitutes a part 'payment' thereof." Sa v. H.L. Harrison &
Son, Inc.,
38 N.J. 203, 207 (1962); see Pfahler v. Eclipse
Pioneer Div. of Bendix Aviation Corp.,
21 N.J. 486, 488 (1956);
Schwarz, supra, 16 N.J. at 248; Sampson v. Thornton,
8 N.J. 415,
419-20 (1952); Oldfield v. New Jersey Realty Co.,
1 N.J. 63, 67
(1948); accord Milos v. Exxon Co., USA,
281 N.J. Super. 194, 198-99 (App. Div. 1995), aff'd o.b.,
143 N.J. 333 (1996); Riccioni,
supra, 26 N.J. Super. at 4-5. Thus, "[w]here medical treatment
which could have been required under the [workers' compensation]
statute is actually furnished by the employer, such treatment is
considered 'payment of compensation' and a claim petition filed
within two years of such 'payment' is within time." Schwarz,
supra, 16 N.J. at 248; accord Milos, supra, 281 N.J. Super. at
199. Just this term, we affirmed the Appellate Division's
holding in Milos v. Exxon Co., USA,
281 N.J. Super. 194, 199,
that "treatment need not be given pursuant to an award [of
workers' compensation benefits] in order to qualify as a 'payment
[of compensation]'; the test is whether the treatment is required
under the Act." See
143 N.J. 333 (1996); see also Fischbein,
supra, 131 N.J.L. at 498 ("'There seems no reason if a payment be
made, which could have been required under the [A]ct, to limit
the period in which a petition may be filed by a judicial
construction which defeats the interests of the [worker].'"
(quoting Betsy Ross Ice Cream Co. v. Greif,
127 N.J.L. 323, 325
(Sup. Ct. 1941))).
We look to the Act itself to ascertain the extent of the
employer's obligation to furnish medical treatment to employees
injured in the line of work. The Act provides in relevant part:
The employer shall furnish to the injured
worker such medical, surgical and other
treatment, and hospital service as shall be
necessary to cure and relieve the worker of
the effects of the injury and to restore the
functions of the injured member or organ
where such restoration is possible . . . .
We note that medical treatment need not be furnished directly by the employer to constitute compensation under the Act. "A payment or agreement to pay by the [employer's] insurance carrier shall . . . be deemed a payment or agreement by the employer." N.J.S.A. 34:15-34. Where the employer has expressly authorized or arranged for the provision of medical treatment or the payment of compensation therefor, the effect is the same as if the employer itself had furnished the treatment or compensation. See Mangieri, supra, 68 N.J. Super. at 217-18; Dunay v. International Smelting & Refining Co., 60 N.J. Super. 546, 551 (Middlesex County Ct. 1960); see also Lynch v. City of Newark, 43 N.J.
Super. 546, 550-51 (Essex County Ct.) (holding that silence of
city-employer over seven-year period following work-related
accident during which firefighter-employee received continuous
medical treatments supervised by city's fire surgeon but paid for
by private, independent Firemen's Relief Association constituted
implied authorization for employee to seek all treatment that
city was required to furnish by law and therefore rendered
employee's claim timely), aff'd,
46 N.J. Super. 335 (App. Div.
1957); Reilly v. City of Newark,
30 N.J. Super. 72, 76 (Essex
County Ct. 1954) ("[T]he city having accepted the benefits of
payment of [medical] bills properly chargeable to [it] for
services rendered to firemen injured in compensable accidents by
the Firemen's Relief Association, is estopped from denying that
treatments rendered . . . or that bills . . . paid . . . are the
act of the city.").
Thus, in Dunay, supra, the court held that the payment of
disability and medical benefits by an employee benefit
association constituted the payment of compensation by the
employer. 60 N.J. Super. at 551. The employee in Dunay, a
railroad brakeman, was injured in 1950 when he "felt a snap in
his back" while bending down to throw a switch on the railroad
track. Id. at 549. The plant doctor treated Dunay at home the
next day, and treatments continued for a number of weeks. After
Dunay returned to work, subsequent treatments were prescribed,
and in 1955 and 1956 Dunay underwent back surgery. Medical
treatment continued until 1957. Throughout the period of Dunay's
disability, he received temporary disability benefits from an
employee benefit association that was administered by the
employer's personnel department. In addition, Dunay's medical
bills were paid in part by the benefit association and in part by
Blue Cross and Blue Shield. The same doctors treated the
employees whether the payments ultimately were made by the
benefit association or workers' compensation insurance. Dunay
filed a petition for workers' compensation benefits within two
years of receiving medical treatment paid for by the benefit
association. Id. at 549-51. The court concluded that
the medical and surgical services and
payments received by the petitioner through
the employee benefit association must be
considered "a part of the compensation * * *
paid by the employer." Since the last
treatment provided for the petitioner
admittedly was within a two-year period
before the institution of the workmen's
compensation proceeding, the present action
is timely.
In the instant case respondent has
organized an employee benefit association
which appears to the workman as a company
project and not as an independent entity.
Petitioner testified that the company paid
the benefits. . . . [B]oth the workmen's
compensation and employee benefit programs
were administered by the same person in the
same office of the personnel department of
respondent. The same doctors provided
treatment whether the case came under the
employee benefit or workmen's compensation
program. This arrangement certainly has the
effect of lulling the employee into a false
assumption of security.
The obligation to furnish medical treatment for a compensable accident under the Workmen's Compensation Act is placed upon
the employer. . . . The employer, having
accepted the benefits of payment of bills by
the employee benefit association properly
chargeable to [it] for services to an
employee injured in a compensable accident,
may not deny that treatments rendered by
plant physicians were the act of the
[employer]. . . .
. . . . Petitioner may not be barred
from the benefits of the workmen's
compensation laws by the acts of his employer
in creating a situation designed to provide a
false sense of security to an injured
employee. Workmen, often uneducated and
foreign-speaking, cannot be required to
differentiate between employee benefit and
workmen's compensation programs administered
by the same plant officials and the same
plant doctors.
[Id. at 551-52 (quoting R.S. (N.J.S.A.) 34:15-51)
(citations omitted).]
Conversely, where the employee obtains medical treatment in
the absence of any authorization by the employer, the treatment
generally will not constitute payment of compensation extending
the limitations period. Mangieri, supra, 68 N.J. Super. at 218;
De Asio, supra, 62 N.J. Super. at 238-40. Thus, in De Asio the
Appellate Division held that there was no "payment of
compensation" extending the statutory limitations period where
the employer had furnished no medical treatment, the employee had
never requested the employer to furnish medical treatment, the
employee was treated by his own physicians, and the employee paid
the premiums on his own health insurance policies. 62 N.J.
Super. at 240.
The Division of Workers' Compensation determined that, more than two years prior to the filing of her claim petitions for workers' compensation benefits, Sheffield knew or should have known the nature of her back injury and its relation to her employment. The Division therefore ruled that Sheffield's claim petitions were filed out-of-time, and the Appellate Division affirmed. We are satisfied that there is sufficient credible evidence in the record to support that determination, although we note that the statutory language contemplates actual knowledge of the nature of the disability and its relation to the employment. See N.J.S.A. 34:15-34 (providing that two-year limitations period begins to run when "claimant first knew the nature of the disability and its relation to the employment"); Panzino v. Continental Can Co., 71 N.J. 298, 302-03 (1976) (discussing legislative history of N.J.S.A. 34:15-34). We conclude, however, that Sheffield's awareness of the nature of her injury and its relationship to her employment is not dispositive of this appeal, because we find that the statutory limitations period was tolled by the "payment of compensation" to Sheffield. See N.J.S.A. 34:15-34.
We hold that the private-plan disability and medical benefits provided to Sheffield pursuant to Schering's scheme of compensation for disabled employees constituted payments of compensation within the meaning of N.J.S.A. 34:15-34. See 2B Larson, supra, § 78.43(c), at 15-272.17 ("When payment of either
income or medical benefits has been made by a private employer-employee benefit association or insurance plan, this has usually . . . been held to toll the statute."); see also Dunay, supra, 60 N.J. Super. at 551 (holding that injured employee's receipt of medical payments and weekly benefits from employee benefit association constituted compensation by employer tolling the statutory period). The record reveals that Schering's private-plan insurers were providing medical and disability benefits to Sheffield up to the time of trial. There can be no question that the medical benefits Sheffield received were in the nature of payments of compensation for medical treatments that could have been required under the Act as "necessary to cure and relieve . . . the effects of the injury" to her back. N.J.S.A. 34:15-15; see Milos, supra, 281 N.J. Super. at 199. With respect to the disability payments, the majority rule would appear to be that such payments also toll the statutory period if the employer is aware of the existence of a work-related injury and the employee reasonably would have understood that the payments constituted, wholly or in part, compensation for an injury compensable under the Act. See 2B Larson, supra, § 78.43(l), at 15-279 to -294; Savina v. Litton Indus./Litton Medical Sys., 330 N.W.2d 456, 457-58 (Minn. 1983) (holding that employer's action in arranging for payment through its group-insurance plan of wage and disability benefits to injured employee who had notified employer of work-related injury tolled limitations period of workers' compensation act); Frost v. Anaconda Co., 645 P.2d 419, 422-23 (Mont. 1982)
(holding that benefits paid to injured employee pursuant to
employer's benefit program for salaried employees unable to work
due to disability, whether work-related or not, tolled
limitations period of workers' compensation act where employer
was on notice that injury was work-related and benefits paid to
employee were substantially comparable to workers' compensation
benefits); Lusk v. Consolidated Aluminum Corp.,
655 S.W.2d 917,
920-21 (Tenn. 1983) (holding that payments made pursuant to
employer's "accident and sickness" group-insurance policy tolled
limitations period of workers' compensation act where injured
employee reasonably believed that such payments, which were
designated as "disability" and "lost time" payments on check
stubs, constituted workers' compensation benefits); see also
N.J.S.A. 34:15-12 (providing for payment of disability
compensation to injured workers). Consequently, because
Sheffield filed her claim petitions within two years of receiving
payments constituting payments of compensation under the Act, the
Division erred in dismissing her petitions as time-barred.
Contrary to the view expressed by our dissenting colleague,
see post at ___ (slip op. at 8), it is widely accepted that a
payment made to compensate for medical expenses incurred as a
result of a work-related injury constitutes a payment of
compensation that tolls the statutory period if the payment could
have been required under the workers' compensation statute,
regardless of whether that payment was made by a workers'
compensation carrier, directly by the employer, or through the
employer's private-plan health or accident insurer. See 2B
Larson, supra, § 78.43(c), at 15-272.17 to .25 (discussing cases
involving "[p]ayment of benefits by private employer or union
sickness and accident insurance or pension plan"); cf. Milos,
supra, 281 N.J. Super. at 199 ("[Medical] treatment need not be
given pursuant to an award [of workers' compensation] in order to
qualify as a "payment"; the test is whether the treatment is
required under the Act."). See also discussion, supra, at ___-___ (slip op. at 15-18).
Thus, the precise source of the payment is irrelevant. What
is critical is that the payment to the injured employee could
have been compelled under the Act to compensate that employee for
the work-related injury. See Milos, supra, 281 N.J. Super. at
200 ("[T]he [medical] treatment need not have been actually
awarded [under the Act], it need only be statutorily required.
It is irrelevant that other employees, who [are] not suffering
from [work-related injury], also receive[] [like treatment].
Because such persons are not 'injured workers,' the [treatments],
as applied to them, are not treatment[s] required by statute. In
those specific instances the [medical treatments] are a voluntary
benefit."). We also acknowledge that health-insurance carriers
and workers' compensation carriers generally assume the cost of
different health-related obligations of their insureds. However,
because of Schering's direct involvement in inducing its health-insurance carrier to pay for medical expenses incurred by
Sheffield for her work-related injuries, the fact that those
payments were made by a health-insurance carrier rather than a
workers' compensation carrier obviously is irrelevant. The
decisive facts are that the payments were for a work-related
injury and could have been compelled under the Act.
We need not determine whether or to what extent employers
assume an affirmative obligation to inform their employees of the
availability of workers' compensation benefits. In our view,
however, when an employer undertakes to advise an injured
employee to apply for certain disability or medical benefits that
are authorized by the employer, the employer necessarily assumes
a further obligation not to divert the employee from the remedies
available under the Act. The advice to Sheffield by Schering's
Benefits Department that she disclaim the work-related nature of
her back injury when submitting claims for medical benefits
arguably could support the conclusion that the company would be
precluded from asserting the statutory bar by reason of its
conduct, a question we need not reach and do not decide. We have
previously observed that because the Act is remedial in nature,
"care should be taken by the courts to guard against the employer
lulling an employee into the belief he would be compensated
either by the payment of compensation or the furnishing of
medical attention or both." Schwarz, supra, 16 N.J. at 250. The
result we reach today is consistent with the purposes of the Act:
"to shoulder on industry the expense incident to the hazards of
industry; to lift from the public the burden to support those
incapacitated by industry and to ultimately pass on to the
consumers of the products of industry such expense." Morris v.
Hermann Forwarding Co.,
18 N.J. 195, 197-98 (1955) (internal
quotations omitted); accord Milos, supra, 281 N.J. Super. at 200
(quoting Morris, supra).
We also address Sheffield's contention that the Division
erred in dismissing her pulmonary-disability claim on the ground
that that disability was not causally related to her employment.
Our limited scope of review on appeal is
"whether the findings made could reasonably
have been reached on sufficient credible
evidence present in the record," considering
"the proofs as a whole," with due regard to
the opportunity of the one who heard the
witnesses to judge their credibility and[,]
in the case of agency review, with due regard
also to the agency's expertise where such
expertise is a pertinent factor.
[Close v. Kordulak Bros.,
44 N.J. 589, 599
(1965) (citation omitted) (quoting State v.
Johnson,
42 N.J. 146, 162 (1964)); accord
Bradley v. Henry Townsend Moving & Storage
Co.,
78 N.J. 532, 534 (1979).]
Our review of the record persuades us that the Division's
determination in respect of Sheffield's pulmonary-disability
claim was based on sufficient credible evidence and must be
upheld. See Paul v. Baltimore Upholstering Co.,
66 N.J. 111, 121
(1974) (noting that it is within compensation judge's province to
accept or reject opinions of expert physicians concerning
causation).
Sheffield also contends that the Division should have
required respondents to furnish her with the trial transcript
that she was obligated to provide on appeal. That contention is
without merit. See R. 2:6-12(a) (requiring appellant to furnish
copy of trial transcript to respondent).
Respondent Liberty Mutual contends that as a prior insurance
carrier it is not liable on Sheffield's claims of occupational
disability, regardless of the disposition of this appeal.
Respondent Second Injury Fund asserts that it, too, is not liable
on the claims. Neither the Division of Workers' Compensation nor
the Appellate Division addressed either of those contentions, and
respondents did not file cross-petitions for certification in
response to Sheffield's petition for certification. Therefore,
respondents' contentions are not properly before the Court. R.
2:2-1(a)(2), (b).
The judgment of the Appellate Division is reversed in part
and affirmed in part. We remand to the Division of Workers'
Compensation for the imposition of an appropriate award of
workers' compensation benefits.
JUSTICES HANDLER, O'HERN and COLEMAN join in JUSTICE STEIN's
opinion. JUSTICE POLLOCK filed a separate dissenting opinion.
JUSTICE GARIBALDI did not participate.
SUPREME COURT OF NEW JERSEY
A-
84 September Term 1995
LODEAN SHEFFIELD,
Petitioner-Appellant,
v.
SCHERING PLOUGH CORPORATION,
TRAVELERS INSURANCE COMPANY,
LIBERTY MUTUAL INSURANCE CO., and
THE SECOND INJURY FUND,
Respondents-Respondents.
POLLOCK, J., dissenting.
The Division of Workers' Compensation (the Division)
dismissed the petition of petitioner, Lodean Sheffield, because
she had failed to file for workers' compensation benefits within
two years after she first "knew of the disability and its
relation to the employment." N.J.S.A. 34:15-34. In affirming the
dismissal, the Appellate Division succinctly summarized the
findings of the Division.
The Division judge held that petitioner sustained orthopedic
and neurological disabilities arising out of her employment
with Schering, but that her claims for such injuries and
disabilities were barred by the two-year statute of
limitations. N.J.S.A. 34:14-41; N.J.S.A. 34:15-51 and
N.J.S.A. 34:15-34. The judge found that petitioner had
"sufficient awareness to have known or should have known
that she had a compensable condition that may have arisen
out of her employment" in 1983 and that since the claim
petitions were not filed until February 1989, more than two
years thereafter, they were time-barred. The judge further
held that petitioner's alleged gastrointestinal problems
were not compensable because no real disability existed and
that even if there were a gastrointestinal disability, it
would not be compensable because it flowed from petitioner's
back injury, which was barred by the two-year statute of
limitations. Finally, the judge held that petitioner's
hypertension was not related to her employment with Schering
and that she failed to sustain her burden of proving that
her pulmonary and internal conditions and disabilities were
causally related to her employment. The judge, therefore,
dismissed petitioner's claim petitions against Schering and
its workers' compensation carriers, respondents Travelers
Insurance Company (Travelers) and Liberty Mutual Insurance
Company, and her petition for Second Injury Fund Benefits.
After carefully considering the record, the Appellate
Division concluded that the judge's findings were supported by
substantial credible evidence in the record. Bradley v. Henry
Townsend Moving & Storage Co.,
78 N.J. 532, 534 (1979). I
agree.
Because of the importance of the judge's findings, I
include the part that pertains to the timeliness of the filing of
petitioner's claim:
A very serious issue involved is the affirmative defense of
Statute of Limitations. Petitioner has two years under the
Workers' Compensation Statute to file from when she knew or
should have known she had a compensable accident related to
her employment.
The files indicate that Petitioner had been treated for
her lower back since 1979. The petitioner testified in
around 1980 [that] she actively lifted and felt pain in her
lower back. The petitioner testified that her back was
aching and causing her problems when she was bending and
lifting packages.
In the 1983 hospital record, the petitioner
specifically stated or gave the history of her back problem
caused by her work at Schering Plough. Petitioner also
complained to Prudential Insurance Company, the company's
private plan, that her back condition was caused by her
work. As a result of that, Prudential sent her a letter
indicating that they were not going to pay any further
benefits, and she would have to look to Workers'
Compensation. Mrs. Androtti, of the long-term disability
department, told her that if she had intended to get
benefits from Prudential, she should not push the idea to
Prudential that she was hurt at work.
Now, all this showed a definite distinction between
Workers' Compensation and other benefits. This is not a
situation where the company was paying long-term disability
and medical benefits, and therefore lulling the petitioner
into a false sense of security that she was receiving
Workers' Compensation Benefits.
Petitioner was aware she hurt herself at work. She
took the position that she could not say that she hurt
herself at work if she continued to receive her current
benefits, she was thus made aware between the distinction of
Workers' Compensation Benefits and long-term disability
benefits. . . .
It is petitioner's position that she was not aware of
Workers' Compensation and she was lulled in the false sense
of security. Petitioner's attorney alleges that respondent
took a step to advise her on her right and did not inform
her of Workers' Compensation benefits.
The respondent has [a] long-term disability benefits
department and the petitioner has been receiving long-term
disability benefits to the present. The payment of her
long-term disability benefits, which she would be entitled
to under her employment contract, and by making sure she
received the medical benefits she was entitled to, does not
put the respondent in the position of being her legal
advisor or her representative. It is clear from Ms.
Androtti's testimony that she advised [petitioner] as far as
long-term disability, it was not her business to advise her
of Workers' Compensation.
The decision of whether [sic] petitioner is entitled to
by the company of [sic] Workers' Compensation resided in the
Health Benefits Department. The decision made by the Health
Benefits Department was that petitioner was not entitled to
Workers' Compensation. Her benefits fell under long-term
disability.
Whether or not that turns out to be a correct
assessment is really immaterial. They made a conscious
effort to decide about Workers' Compensation, they did not
mislead petitioner. I do not think that they have an
affirmative duty to sit her down and talk to her about the
possibilities of Workers' Compensation. They are not her
lawyers and the fact that they sit her down and advise her
of other benefits and private benefits she's entitled to
does not make them her overall Counselors for any possible
suits against the company.
Furthermore, I don't see any attempt to defraud the
petitioner. The respondent, based on the information that
[s]he had, could very well have come to the conclusion that
there was no compensation case and there was no particular
accident. Petitioner was complaining about her back at
least since 1979 and had definite diagnosis of a lower back
condition in 1980.
The petitioner did say, in her hospitalization in 1983,
that it happened at work and they were aware that there were
problems in bending and lifting. That, in and of itself,
did not make clear that there was a Workers' Compensation
suit. An attorney [Jacob Balk] who saw her [regarding]
Social Security and had a good percent of his practice
dealing with Workers' Compensation had all her medical
records to send in to the Social Security Division.
Apparently, based on his file, he did not see a connection
of Workers' Compensation Benefits or work-related injury.
Again, whether that was a correct assessment or
incorrect assessment, it certainly could have been a
reasonable assessment under the circumstances.
Based on the testimony of the petitioner in 1991, the
court could take the position that her back condition was
aggravated, accelerated and exacerbated by her work, this
was after a trial with doctors testifying in which this
assessment could be made. The company's position was not,
therefore, unreasonable.
Furthermore, it is really not what is in the company's
mind as to knowledge and notice of a possible work-connected
accident. The statute of limitations begins to run when the
petitioner knew or should have known of a work-related
accident occurring or a compensable condition occurring out
of her employment.
Petitioner gave a history in the hospital record of
1983 that the work was related to her back problems. She
was told by the company that if she persisted in stating her
back problems occurred out of the work, that she would not
be able to receive money from Prudential Insurance Company.
There was a distinction being made there.
It is clear to me that she had a sufficient awareness
to have known or should have known that she had a
compensable condition that may have risen out of the
employment.
As the record reveals, petitioner elected to receive payments from respondent's private-plan medical insurers, Prudential and John Hancock. Respondent's long-term disability insurer, Travelers, paid her disability benefits. Respondent's workers' compensation carriers, originally Liberty Mutual and later Travelers, made no payments. The reason is that petitioner
did not seek to recover workers compensation from respondent
until after she had already received the medical and disability
benefits under other policies.
On these facts, the majority holds "that the private-plan
disability and medical benefits provided to Sheffield pursuant to
Schering's scheme of compensation of disabled employees
constituted payments of compensation within the meaning of
N.J.S.A. 34:15-34." Ante at __ (slip op. at 19). To reach that
result, the majority ignores the finding of the workers'
compensation judge that Sheffield knew the difference between
workers' compensation benefits and the private plan benefits. It
also ignores the judge's findings that Sheffield accepted
payments under the latter plans and that Schering did not mislead
Sheffield regarding the availability of workers' compensation
benefits.
The essential facts are that the employer subscribed to private medical and disability plans, and that the employee knew the differences between recovery under those plans and under workers' compensation. Further, the employee decided to pursue payments under the private plans, not under workers' compensation. Nonetheless, the majority states that "the precise source of the payment is irrelevant. What is critical is that the payment to the injured employee could have been compelled under the Act to compensate that employee for the work-related
injury." Ante at -- (slip op. at 22). In so finding, the
majority has transformed payments under private health and
disability plans into payments under a workers' compensation
plan, with the result that the payments under the private plans
toll the time of an employee to file a workers'compensation
claim, notwithstanding the employee's original decision not to
seek workers' compensation.
The majority relies on Dunay v. International Smelting and
Refining Co.,
60 N.J. Super. 546 (App. Div. 1960), to support its
broad ruling that payment of private medical benefits tolls the
statute of limitations on a workers' compensation claim. Dunay
is distinguishable on its facts. The claimant in that case did
not know whether his benefits came from the employer's workers'
compensation insurance carrier or a private employee benefit
association, "which appeared to the workman as a company project
and not as an independent entity." Id. at 551. The court found
that "[t]his arrangement certainly has the effect of lulling the
employee into a false assumption of security." Id. at 552.
Thus, Dunay stands as an exception to the two-year statute of
limitations, because the employer mislead the employee to believe
he was receiving compensation. The case hardly supports such a
broad ruling as the majority contends.
By contrast, in this case, petitioner knew that she was receiving medical benefits under respondent's private plan to
which she made co-payments, and not under respondent's workers'
compensation plan.
To support its new rule, the majority also overreads our recent affirmance of the Appellate Division decision in Milos v. Exxon, Co., USA, 143 N.J. 333 (1996), aff'g p.c.o.b. 281 N.J. Super. 194 (App. Div. 1995). In that case, Exxon instituted the Exxon Surveillance Program pursuant to a collective bargaining agreement with the employee's union, 281 N.J. Super. at 197, to counter the unique problems with diagnosing and tracking asbestos-related diseases, which often do not develop or progress until years after exposure. The employee previously had received payments under workers' compensation for disability due to asbestos exposure. Id. To the extent that the employee was already diagnosed with a work-related pulmonary disability and had received benefits, his annual monitoring examinations under the program constituted continued compensation by the e