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Previously, on a reopener of a permanent partial total disability case that turned into a permanent total disability case, there has always been a credit for the entire amount paid for the partial total award. This leads to some great results on reopener, especially when the Second Injury Fund is involved.
However, a recent division decision has ruled that on a reopener claim, where the petitioner is found to be totally and permanently disabled, that the respondent is not entitled to a credit for the prior partial total award.
In that case, the petitioner suffered a work related injury on September 30, 2005, and entered into an Order Approving Settlement on July 8, 2008 in the amount of 66 2/3% of partial total. Petitioner subsequently filed a reopener claim and as a result entered into an Order Approving Settlement on October 11, 2011, which increased his disability to 70% of partial total and the respondent received a reopener credit of 66 2/3% for the prior award. Petitioner then filed a second Application for Review on September 15, 2012 and following a trial, the court entered an order for total disability. However, the court concluded that the respondent was not entitled to a credit for the prior partial total award.
In its reasoning, the court heavily relied on the language in N.J.S.A. 34:15-12(b) whereby the statute clearly mandates that an award for permanent total disability “shall be paid for a period of 450 weeks”. The word “shall” means that payment for an award of total disability for a period other than 450 weeks is not an option. In addition, this section of the statute makes absolutely no reference to a credit for a prior award arising out of the same accident.
The court went on to point out the differences in the language governing partial total disability awards and total disability awards. Among the many differences, the court points out that the partial total disability awards are paid with a maximum of 600 weeks whereas total disability awards must be paid for 450 weeks, at which time the petitioner is subject to reevaluation with potential for lifetime benefits. Moreover, the court further points out that a credit for the prior partial total award could cause an absurd result that is contrary to both public policy and the intent of the legislature - that the most seriously injured workers get the greatest benefits. For example, if the petitioner’s prior partial total award was 75%, which gets paid over 450 weeks, and then it is determined to be totally and permanent disabled from the same work accident on a reopener, the petitioner would be awarded 450 weeks of compensation minus 450 weeks for the prior award, which equal 0 weeks of compensation.
While this case appears to rely heavily on getting the most serious injured workers the greatest awards, it fails to take into account the fact that the worker is not really getting any more here. While a total disability award is technically limited to 450 weeks, we all know that the threshold for lifetime benefits is loosely applied. What is significant, however, is the chilling effect that this case will have on other aspects of the workers’ compensation practice.
First, this will certainly burden settlement negotiations on seriously injured workers where the worker otherwise wants to continue to work and/or is capable of working. Why would respondent consider a high partial disability award on a seriously injured worker that may end up totally disabled later. Respondent would be better off considering total disability now, rendering the petitioner unemployable to avoid paying twice. On the other hand, petitioner attorneys are going to push for a partial total disability award on the claim petition so that it can be brought back on reopener, for a potential total award later. This is because they are now getting a double counsel fee – a fee on the partial total award, and a fee on the new 450 weeks for the total award. We end up pushing for greater disability and petitioner argues for lower disability. The parties are essentially reversing roles. This alone will likely create the need for more trials.
Second, when the Second Injury Fund is involved, one of the greatest tactics we have is being creative in facilitating a settlement in which the fund picks up a portion of the total disability claim on a reopener. Respondent then takes a credit for the prior award, minimizing the overall amount of money coming out of the respondent’s pocket on the reopener claim. Often times, this can be extremely favorable to the respondent. However, this will end. The respondent will essentially be forced to pay the award twice and the fund will not start paying until much later.
It is important to remember that this case is a division decision and as such, it is not binding. Additionally, it is unclear whether this case is being appealed. We will be monitoring same and updating you accordingly.
