State News : New Jersey

          Saul Liebman was living alone after the recent death of his wife in September 2008.  At the time he was 81 years old.  His daughter made inquiries to find someone who could move into her father’s home and take care of him, including cooking meals and assisting in daily activities. Myroslava Kotsovska, a 59-year-old Ukrainian woman, was referred to Liebman.  She had performed similar services to a New Jersey family in the past.

            Kotsovska met with Liebman and the parties agreed that she would move in and work seven days a week for $100 per day in cash doing laundry, cooking, light housekeeping, and assisting with general tasks.  There was no formal discussion of her employment status, specifically whether she would be considered an independent contractor.  The working arrangement began on October 21, 2008. 

            On December 8, 2008, Liebman and Kotsovska ran some errands and stopped at the Millburn Diner for lunch. Kotsovska exited the car and stood on the sidewalk while Liebman pulled into the parking space in front of her.  Liebman then accidentally pressed the accelerator and the car drove over the parking block and onto the sidewalk, crashing into Kotsovska, and pinning her against a low wall.  The car severed her leg below the knee, leading to her death within an hour.

            The estate of Kotsovska filed a wrongful death action against Liebman in Superior Court.  Liebman answered and contended that the exclusive jurisdiction was in the Division of Workers’ Compensation since Kotsovska was his employee.  The Estate argued that the decedent was an independent contractor.  The homeowner’s carrier acknowledged the existence of workers’ compensation coverage and notice of the claim and agreed that the accident arose from the decedent’s employment.  It also agreed not to raise a statute of limitations defense although no workers’ compensation claim had been timely filed. 

            The trial judge refused to send the case to the Division of Workers’ Compensation, and a jury determined that the decedent was an independent contractor, awarding the estate $300,000 for decedent’s pain and suffering and $225,000 for her wrongful death.  Liebman appealed and the Appellate Division reversed in a published decision atEstate of Myroslava Kotsovska v. Saul Liebman, A-5512-11T4, (App. Div. December 26, 2013).   The court held, “We conclude that this matter should have been transferred to the Division (Workers’ Compensation) for determination of decedent’s employment status.  The Court in Kristiansen held that, although the Superior Court and the Division have concurrent jurisdiction to decide an exclusivity defense, primary jurisdiction is in the Division where, as here, ‘no issue has been raised that the Division cannot decide in a manner that is binding on all the interested parties.’” (citingKristiansen v. Morgan, 153 N.J. 298 (1998) modified on other grounds, 158N.J. 681 (1999).

             The Appellate Division made clear that the Division of Workers’ Compensation hasprimary jurisdiction, not merely concurrent jurisdiction.  It said that the Division of Workers’ Compensation is the best forum to decide employment issues and compensability issues.  The court said,“Accordingly, we hold that because Liebman’s exclusivity defense turned on whether decedent was his employee or an independent contractor, an issue over which the Division could enter a binding judgment, and one which the Division was best suited ‘by virtue of its statutory status, administrative competence and regulatory expertise to adjudicate,’. . . (citations omitted) the trial court should have transferred the case to the Division.”

            The next question the court focused on was whether it should reverse the finding of liability on the part of Liebman or allow the jury verdict to stand given that the Superior Court was acknowledged to have concurrent jurisdiction.   In this case, the court found that the instructions to the jury on the factors that determine employee status were vague and insufficient.  The court reversed the judgment on liability only and remanded the matter to the Division of Workers’ Compensation to determine whether the decedent was Liebman’s employee or performed services for him as an independent contractor.  If the Division of Workers’ Compensation should find Kotsovska to be an employee, the verdict would be thrown out completely.

            Practitioners should study this case.  First, it is a published decision and will be cited by other courts.  Secondly, it is really the first reported decision in New Jersey to emphasize that not only does the Division of Workers’ Compensation have concurrent jurisdiction with the Superior Court in matters of compensability and employment, but it hasprimary jurisdiction.