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In Saiti v. Garden Homes, No. A-1328-20 (App. Div. October 11, 2022), the petitioner received an award for $66,074 on September 3, 2020. The terms of the settlement were memorialized in an order signed by the Judge of Compensation and both parties. Petitioner’s attorney made numerous phone calls in the ensuing 60 days regarding non-payment of the order. After 60 days, petitioner moved to enforce the Order since payments still had not been made. Over 90 days after the Order was entered, a telephone conference occurred on December 7, 2020 regarding the late payment. There was no record of the conversation and no record of any oral argument by the parties, although there is mention that the parties appeared.
On December 7, 2020, the Judge of Compensation issued an oral decision on petitioner’s motion, noting that the payments were now due over 90 days. The Judge of Compensation ordered:
1. Costs and interest on the settlement payments;
2. An additional assessment of 25% of the monies due for the unreasonable payment delay to the petitioner with $16,287 payable to Saiti;
3. $4,000 in attorneys’ fees payable to counsel for Saiti;
4. $5,000 in penalties payable to the Second Injury Fund;
5. Additional legal fees of $2,188 to counsel for Saiti in relation to enforcement efforts.
Respondent appealed the December 7, 2020 Order and argued that the Judge of Compensation abused his discretion in awarding penalties and sanctions without affording counsel the opportunity to be heard.
The Appellate Division observed, “The Workers’ Compensation Act does not establish a specific timeframe for payment of workers’ compensation settlement proceeds.” That statement is puzzling because N.J.S.A. 34:15-28 states as follows: “Whenever lawful compensation shall have been withheld from an injured employee or dependents for a term of 60 or more days following entry of a judgment or order, simple interest on each weekly payment for the period of delay of each payment may, at the discretion of the division, be added to the amount due at the time of settlement.” While this statute gives the Judge of Compensation some discretion, it also clearly refers to a 60-day time period.
The Appellate Division held, “Having reviewed the parties’ arguments in light of the record and the applicable legal principles, we are unable to determine whether the imposition of penalties and assessments under the December 7, 2020 order was reasonable.”
The Court held, “We are satisfied that it was a mistaken abuse of discretion to enter an order awarding sanctions without permitting counsel to be heard and without findings as to why the payment delay was unreasonable.”
The Court directed that the Judge of Workers’ Compensation “shall conduct a hearing and consider the steps taken by Saiti’s counsel to secure payment within sixty days of the entry of the September 7, 2020 order.” The Order was vacated pending a new hearing. The case seems to turn on procedural due process, namely the need for the Judge of Compensation to hear oral arguments on the reasonableness of the delay, specifically whether the delay in payment had some justification.
This decision provides no comfort for respondents. It is true that the December 7, 2020 Order was vacated, but a new hearing will be held in which the Judge of Compensation will hear oral arguments from defense counsel explaining the reason, if any, for delays in paying the Order of September 3, 2020. The best advice to employers remains this: all orders need to be paid within 60 days. That is the clear import of the relevant statute.
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John H. Geaney, Esq., is a Shareholder and Co-Chair in Capehart Scatchard's Workers’ Compensation Group. Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.