Estate of Myroslava Kotsovska v. Saul Liebman (073861) , 221 N.J. 568 ( 2015 )

SYLLABUS
(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
interest of brevity, portions of any opinion may not have been summarized).
Estate of Myroslava Kotsovska v. Saul Liebman (A-89-13) (073861)
Argued March 16, 2015 -- Decided June 11, 2015
SOLOMON, J., writing for a unanimous Court.
In this appeal, the Court considers whether the Workers’ Compensation Act (Compensation Act) divests
the Superior Court of jurisdiction to adjudicate the issue of a worker’s employment status once a defendant raises
the exclusive remedy provision of the Compensation Act as an affirmative defense. The Court also considers
whether, in the circumstances presented here, the jury charge was so deficient as to require reversal.
In September 2008, after defendant’s daughter decided he needed a live-in assistant, she and defendant met
with decedent. Decedent agreed to move in with defendant and to work seven days a week in exchange for $100 per
day. Decedent’s duties included preparing three meals a day for defendant, doing laundry, housekeeping, and
accompanying him on errands. Neither of the parties prepared any documentation, nor did they discuss the duration
of the arrangement. A month after decedent began working for defendant, he asked her to accompany him to a
diner. When they arrived, defendant pulled over and let decedent out of his car. While attempting to park,
defendant accidentally drove onto the sidewalk where decedent was standing and pinned her against the wall,
severing her leg. Decedent died shortly thereafter from her injuries. Petitioner, the administrator of decedent’s
estate, filed a wrongful death action against defendant. Defendant conceded his negligence, but asserted that
decedent was his employee and that, therefore, petitioner was entitled to recovery only under the Compensation Act.
Defendant moved to dismiss the complaint and to transfer the matter to the Division of Workers’
Compensation (Division), arguing that the Superior Court lacked jurisdiction to resolve the dispute. The trial court
denied the motion. After discovery, defendant filed a motion for summary judgment raising the same argument.
The court rejected defendant’s argument and denied the motion and subsequent motion for reconsideration. Because
defendant conceded negligence, the sole contention at trial was the nature of decedent’s economic relationship with
defendant. At trial, the judge instructed the jury that it would need to decide by a preponderance of the evidence
whether decedent was an employee or an independent contractor and explained the factors that it should consider in
reaching that conclusion. The judge also informed the jury that it should give whatever weight it deemed
appropriate to the facts. The jury returned a verdict in favor of petitioner, found that decedent was an independent
contractor and awarded decedent’s estate a total of $525,000 in damages.
Defendant appealed and, in a published opinion, the Appellate Division reversed. Estate of Kotsovska v.
Liebman, 433 N.J. Super. 537, 541 (App. Div. 2013). Relying on this Court’s decisions in Kristiansen v. Morgan,
153 N.J. 298 (1998), and Wunschel v. City of Jersey City, 96 N.J. 651 (1984), the panel concluded that the Division
had primary jurisdiction over the dispute regarding decedent’s employment status. The panel rejected defendant’s
challenges to the damages award, reversed the judgment on liability only, and remanded the matter to the Division
for a determination of decedent’s employment status. This Court granted plaintiff’s petition for certification. 217
N.J. 587 (2014).
HELD: When there is a genuine dispute regarding a worker’s employment status, and the plaintiff elects to file a
complaint only in the Superior Court Law Division, the Superior Court has concurrent jurisdiction to resolve the
dispute.
1. Under the Compensation Act, when an employer and employee have, by express or implied agreement, accepted
the provisions thereof, employers must compensate employees for work-related injuries arising out of and in the
course of employment without regard to the negligence of the employer. N.J.S.A. 34:15-7. This provision is
intended to ensure that workers’ compensation provides the exclusive remedy for employees who sustain work-
related injuries. The Compensation Act defines an employee as a natural person who performs a service for an
employer for financial consideration. Independent contractors, which are not addressed in the Compensation Act,
are neither entitled to benefits nor subject to the limitations of the Compensation Act. Accordingly, parties cannot
be presumed to have accepted the provisions of the Compensation Act until a determination is made as to whether
the worker was an employee or an independent contractor. (pp. 13-18)
2. The Division has exclusive original jurisdiction of all claims for workers’ compensation benefits under this
chapter. N.J.S.A. 34:15-49(a). The Superior Court should resist the assertion of jurisdiction in cases where it is
evident the matter should be tried elsewhere, but where there is a genuine question of jurisdiction, this Court
perceives no statutory injunction against the trial of that issue in either forum. In contrast to the cases relied upon by
defendant and the Appellate Division, here there was a genuine dispute regarding decedent’s employment status.
Petitioner has never suggested that decedent was defendant’s employee, and in fact maintained that decedent was an
independent contractor after defendant raised the exclusive remedy defense under N.J.S.A. 34:15-8. Moreover,
petitioner did not file a petition for workers’ compensation with the Division. Thus, there was no claim pending
before the Division over which it could assert jurisdiction. The Court, therefore, concludes that the Superior Court
had jurisdiction to decide the question of decedent’s employment status. (pp. 18-20)
3. Having determined the Superior Court had jurisdiction, the Court considers whether the trial court erred in
declining to transfer plaintiff’s claim to the Division under the doctrine of primary jurisdiction. The decision to
invoke the doctrine of primary jurisdiction rests within the sound discretion of the trial court and should not be
disturbed on appeal unless the decision was made without a rational explication, inexplicably departed from
established practices, or rested on an impermissible basis. The trial court did not abuse its discretion in declining to
dismiss the matter pending a determination by the Division of decedent’s employment status. The forum best suited
to decide employment issues is the Compensation Court, but it is in no better position to make the threshold
determination of a worker’s employment status than the Superior Court. (pp. 20-22)
4. The Court disagrees with the Appellate Division’s conclusion that Wunschel and Kristiansen compel a different
conclusion. In both Wunschel and Kristiansen, the plaintiffs filed workers’ compensation petitions, thereby
acknowledging that the decedents were employees rather than independent contractors. Here, however, petitioner
elected to file only a wrongful death action in the Superior Court, and decedent’s employment status is vigorously
disputed. While the sole issue in dispute here is an employment issue, that issue falls well within the knowledge of
the Superior Court. Accordingly, this Court rejects the Appellate Division’s finding that the Division had primary
jurisdiction over the question of decedent’s employment status. (pp. 23-25)
5. Further, in the context of the jury charge at issue here, the Court notes that the first step in assessing the sufficiency
of a contested jury charge requires an understanding of the legal principles pertinent to the jury’s determination. Our
courts have utilized two different but related tests to distinguish employees from independent contractors: (1) the
control test, which is grounded in the common law master-servant relationship; and (2) the relative nature of the work
test, which is used in various situations in which the control test does not emerge as the dispositive factor. Under the
control test, the factfinder considers the extent of the employer’s right to control the work of the employee. By
contrast, the relative nature of the work test requires a court to examine the extent of the economic dependence of the
worker upon the business he serves and the relationship of the nature of his work to the operation of that business.
The Court has previously held that when social legislation must be applied in the setting of a professional person or
an individual otherwise providing specialized services allegedly as an independent contractor, the trial court should
consider: (1) employer control; (2) the worker’s economic dependence on the work relationship; and (3) the degree to
which there has been a functional integration of the employer’s business with that of the person doing the work at
issue. In assessing these factors, we approved of the hybrid test established by the Appellate Division in Pukowsky
v. Caruso, 312 N.J. Super. 171, 182-83 (App. Div. 1998). The Court hold that the test for determining those aspects
of a non-traditional work relationship set out in Pukowsky applies in the context of a dispute over the applicability of
the Compensation Statute. (pp. 25-31)
6. Next, the Court considers whether the jury charge here, which followed Model Jury Charge (Civil) § 5.10I(A),
warranted reversal. Here, the model charge was applied to aid the jury in its determination of decedent’s employment
status in the context of social legislation. Because the charge given here was used in a context different from the
specific purpose for which the charge was adopted, the presumption of propriety that attaches to a trial court’s reliance
on the model jury charge does not apply. A comparison between Model Jury Charge (Civil) § 5.10I(A) and the hybrid
approach shows that the trial court did not instruct the jury as to each factor. Nevertheless, to the extent such omissions
2
were error, under the unusual facts of this case, the charge was not so erroneous as to require reversal. (pp. 31-33)
7. Here, decedent entered into a loosely defined service contract, which was made terminable at will by either party.
Decedent, who was not a caretaker by trade, had no social security number, and was not permitted under the terms of
her visa to work in this country, agreed to provide general services on an as-needed basis, and retained the discretion
to determine the parameters of that service. The trial judge informed the jury that it is not important whether or not
defendant ever exercised control, but rather the extent to which the right to control existed. The jury charge failed to
instruct the jury with regard to the importance of whether decedent’s employment was supervised or unsupervised.
However, the record indicates that, apart from defendant’s daughter occasionally checking in on decedent and her
father, decedent’s work was entirely unsupervised. The jury charge also failed to instruct the jury on the importance
of whether there was an annual leave policy, whether decedent accrued retirement benefits, and whether defendant
paid social security taxes. However, each of these factors suggested that decedent was an independent contractor: no
retirement benefits were contemplated, defendant paid no social security taxes, and there was no indication of an
annual leave policy. Although the charge could have been more artfully drafted, it did not misinform the jury as to
the controlling law and was neither ambiguous nor misleading To the extent that it omitted relevant factors for
consideration under the approach the Court now endorses, those factors inured to the benefit of petitioner, and
therefore did not result in prejudice to defendant. As such, the Court concludes that the charge, though flawed, does
not warrant reversal. (pp. 33-38)
The judgment of the Appellate Division is REVERSED. The verdict of the jury is REINSTATED.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON and
FERNANDEZ-VINA join in JUSTICE SOLOMON’S opinion. JUDGE CUFF (temporarily assigned) did not
participate.
3
SUPREME COURT OF NEW JERSEY
A-89 September Term 2013
073861
ESTATE OF MYROSLAVA
KOTSOVSKA, by OLENA
KOTSOVSKA, Administratrix,
Plaintiff-Appellant,
v.
SAUL LIEBMAN,
Defendant-Respondent.
Argued March 16, 2015 – Decided June 11, 2015
On certification to the Superior Court,
Appellate Division, whose opinion is
reported at 433 N.J. Super. 537 (App. Div.
2013).
Gerald D. Wixted argued the cause for
appellant (Smith, Stratton, Wise, Heher &
Brennan, attorneys).
Robert F. Cox argued the cause for
respondent (McCreedy & Cox, attorneys).
JUSTICE SOLOMON delivered the opinion of the Court.
This case arises from the tragic death of Myroslava
Kotsovska (decedent), who was fatally injured when defendant
Saul Liebman, for whom decedent worked as a caretaker,
inadvertently struck her with his car. Petitioner Olena
Kotsovska, as administratrix of decedent’s estate, filed a
wrongful death action against Liebman.
1
Liebman did not dispute that decedent’s injuries were the
result of Liebman’s negligence. Instead, Liebman argued that,
because decedent was his employee, petitioner could recover only
under the Workers’ Compensation Act (Compensation Act), N.J.S.A.
34:15-1 to -142. If, as Liebman asserts, decedent was his
employee, under the Compensation Act petitioner is required to
file a workers’ compensation petition with the Division of
Workers’ Compensation (Division) and may not recover for
decedent’s work-related injuries in tort. Conversely, if
decedent was an independent contractor, as petitioner asserts,
the Compensation Act does not apply and petitioner properly
filed a claim against Liebman in the Superior Court.
In this appeal, we are called upon to determine whether the
Compensation Act divests the Superior Court of jurisdiction to
adjudicate the issue of a worker’s employment status once a
defendant raises as an affirmative defense the exclusive remedy
provision of the Compensation Act, N.J.S.A. 34:15-8. Although
the Superior Court determined that it had jurisdiction to
adjudicate the issue of decedent’s employment status, the
Appellate Division found that the doctrine of primary
jurisdiction required the trial judge to transfer the matter to
the Division as soon as the workers’ compensation defense was
raised. We conclude that when, as here, there is a genuine
dispute regarding the worker’s employment status, and the
2
plaintiff elects to file a complaint only in the Law Division of
the Superior Court, the Superior Court has concurrent
jurisdiction to resolve the dispute.
We must also determine whether, as the Appellate Division
found, the jury charge given was so deficient that reversal was
required. This Court in D’Annunzio v. Prudential Insurance Co.
of America, 192 N.J. 110, 122-24 (2007), adopted a framework for
assessing a worker’s employment status in the context of social
legislation. We now endorse that framework for use in
ascertaining a worker’s employment status for purposes of
determining whether the Compensation Act’s exclusive remedy
provision applies. Although the jury charge given here did not
fully reflect the considerations set forth in D’Annunzio, the
factors omitted either inured to the benefit of petitioner or
were irrelevant under the facts of this case. Thus, we cannot
conclude that the jury instruction had the capacity to confuse
or mislead the jury.
Consequently, we reverse the judgment of the Appellate
Division and reinstate the jury’s verdict.
I.
The undisputed facts of this case are briefly summarized as
follows. In September 2008, Liebman’s daughter Robin Ross
decided that Liebman, then eighty-nine years old and living
alone, was in need of a live-in assistant. Ross inquired among
3
her friends for a suitable candidate, and was introduced to
decedent through a mutual acquaintance.
Decedent met with Ross and Liebman. Because decedent was
not proficient in English, her son-in-law Oleh Baran accompanied
decedent and served as a translator. Decedent agreed to move in
with Liebman and work seven days a week in exchange for $100 per
day, to be paid in cash. The parties agreed to pay decedent in
cash because decedent did not have a social security number or a
bank account, and therefore could not cash a check. Decedent’s
duties included preparing three meals a day for Liebman, doing
Liebman’s laundry, performing “light housekeeping” duties “as
needed,” accompanying Liebman on errands, and assisting Liebman
generally in “getting around.”
No documentation regarding the work agreement was prepared,
exchanged, or requested. The parties did not discuss the
duration of the arrangement; nor did they discuss decedent’s
immigration status or whether she was authorized to work in the
United States.1 The parties agreed that decedent would have some
vacation time around the holidays, but did not discuss how long
the vacation time would be or if the vacation time would be
paid. Ross asked if decedent had health insurance, to which
1 According to Olena Kotsovska, decedent’s visa did not authorize
her to work in the United States. Olena testified that she did
not inform Ross or Liebman of this fact because they “didn’t ask
those questions.”
4
Baran replied that he and Olena would take care of decedent’s
medical bills “personally” if the need arose.
Decedent started work immediately. Ross testified that she
“checked in” on decedent “occasionally,” and that it was her
understanding that decedent had “a lot of independence” in how
she chose to perform her duties and when to take time off.
According to Ross, either party was free to terminate the
arrangement at any time.
Little more than one month after decedent began working for
Liebman, Liebman asked decedent to accompany him to a diner
because he needed help with errands. As they arrived at the
diner, Liebman pulled over and let decedent out of his car.
While attempting to park, Liebman accidentally drove over the
curb onto the sidewalk where decedent was standing and pinned
decedent against the wall of the diner, severing her leg below
the knee. Decedent died shortly thereafter from her injuries.
Petitioner filed a wrongful death action against Liebman,
alleging that decedent’s death was the result of Liebman’s
negligence. Liebman conceded negligence, but asserted that
decedent was his employee and that, therefore, petitioner was
entitled to recovery only under the Compensation Act.
Liebman filed a motion to dismiss the complaint and to
transfer the matter to the Division, arguing that the Superior
Court lacked jurisdiction to resolve employment status disputes
5
for purposes of determining whether the Compensation Act’s
exclusive remedy provision, N.J.S.A. 34:15-8, applies. The
trial court denied the motion. After discovery concluded,
Liebman filed a motion for summary judgment raising the same
argument. Noting that plaintiff had not filed a workers’
compensation petition and that therefore “there’s nothing
pending there for [the Division] to make a decision,” the court
rejected defendant’s argument and denied the motion and
subsequent motion for reconsideration. Because Liebman conceded
negligence, the sole contention at trial was the nature of
decedent’s economic relationship with Liebman.
After five days of trial, the judge instructed the jury
that it would need to decide by a preponderance of the evidence
whether decedent was an employee or an independent contractor.
The judge defined “employee” as “a person engaged to perform
services for another, the employer, and who is subject to the
employer’s control or right to control the physical conduct
required to perform such services.” The judge then defined
“independent contractor” as
a person who in carrying on an independent
business contracts, independent from the
employer, . . . to do a piece of work according
to h[er] own methods without being subject to
the control of the employer as to the means by
which the result is to be accomplished but
only as to the result of the work.
6
Next, the judge explained that “there are a number of
factors” to consider in determining whether decedent was an
employee or an independent contractor:
The first factor and probably the most
important factor is the extent of control the
person for whom the services are performed has
the right to . . . exercise over the details
of the services performed. If the worker is
only subject to the general control and
direction of the employer, then the worker is
more likely to be an independent contractor.
It is not important whether or not [Liebman]
in this case actually ever exercised control
but rather the extent to which the right to
control existed. The more the control, the
more likely an employer/employee relationship
exists. The less . . . control, the less
likely an employer/employee relationship
exists.
Another factor you can consider is whether the
parties believed they’re [sic] in a
relationship of employer/employee and number
three, the extent of the skill required in the
performance of the services. Number four, the
length of time anticipated for the performance
of the services. Number five, hiring, payment
of regularly weekly sum, provision of tools,
supplies of a workplace and being terminable
at will are factors that weigh in favor of the
employer/employee relationship. Lack of
payroll deductions, payment in cash are
factors that weigh against the
employer/employee relationship. Such other
factors as may be reasonably considered [to]
determine whether [Liebman] controlled or had
the right to control [decedent] in the
performance of her services provided.
. . . .
The conduct of the parties after they entered
into the relationship may be significant
7
evidence about what they believed the
relationship to be.
The judge explained that the jury should consider the “quality
of the factors” rather than the “quantity of factors” in
considering whether decedent was an employee or an independent
contractor, and that it was up to the jury to “give whatever
weight you deem appropriate to the fact[s] as you find to exist
to reach your decision[.]”
The jury returned a verdict in favor of petitioner, finding
that decedent was an independent contractor and awarding
decedent’s estate a total of $525,000 in damages. The trial
court denied Liebman’s motion for a new trial, and Liebman filed
a timely notice of appeal.
The Appellate Division reversed in a published opinion.
Estate of Kotsovska v. Liebman, 433 N.J. Super. 537, 541 (App.
Div. 2013). Relying on this Court’s decisions in Kristiansen v.
Morgan, 153 N.J. 298 (1998), and Wunschel v. City of Jersey
City, 96 N.J. 651 (1984), the panel concluded that the Division
had primary jurisdiction over the dispute regarding decedent’s
employment status “‘by virtue of its statutory status,
administrative competence and regulatory expertise.’” Liebman,
supra, 433 N.J. Super. at 543-44 (quoting Wunschel, supra, 96
N.J. at 664). Although the panel determined that the matter
“should have been transferred to the Division for a
8
determination of decedent’s employment status,” it held that
this error alone did not warrant reversal because the Superior
Court has concurrent jurisdiction to decide employment issues.
Id. at 543, 547.
Nevertheless, the panel reversed, finding the jury charge
addressing the distinctions between employees and independent
contractors “was clearly capable of producing an unjust result.”
Id. at 547, 549. Observing that New Jersey courts have
increasingly relied upon the “relative nature of the work” test
in compensation cases, the panel determined that the jury charge
should have accounted for the factors relevant to that test.
Id. at 547-48. Specifically, the panel determined that
decedent’s economic dependence upon Liebman was “highly relevant
here as decedent would appear to have been entirely economically
dependent on Liebman.” Id. at 548. The panel also stated that
including in the charge the method of payment and lack of
payroll deductions as factors weighing against a finding of an
employee-employer relationship, without more explanation, “was
incomplete and misleading” because of the reduced importance
accorded to those factors in previous cases. Id. at 548-59.
The panel rejected Liebman’s challenges to the damages
award and “reverse[d] the judgment on liability only,” remanding
the matter to the Division for a determination of decedent’s
employment status. Id. at 551.
9
We granted plaintiff’s petition for certification. 217
N.J. 587 (2014).
II.
A.
Addressing the Appellate Division’s determination that the
matter should have been transferred to the Division, petitioner
argues that the panel’s decision runs contrary to established
litigation practice and finds no support in either the language
of the Compensation Act or this State’s jurisprudence. Citing
one published Appellate Division case and numerous unpublished
Appellate Division cases, petitioner asserts that the Superior
Court “has long been understood” to have jurisdiction over the
issue of a worker’s employment status for purposes of
determining whether plaintiff’s exclusive remedy is under the
Compensation Act.
Petitioner acknowledges this Court’s holdings in Wunschel
and Kristiansen that the Division has expertise in employment
matters and primary jurisdiction over compensability disputes
under the Compensation Act. However, petitioner argues that
Wunschel and Kristiansen are inapposite because, in those cases,
it was undisputed that the workers were employees. By contrast,
here petitioner did not file a workers’ compensation petition
and has maintained that decedent was an independent contractor
rather than an employee.
10
Petitioner acknowledges that the Compensation Act confers
exclusive original jurisdiction upon the Division over claims
arising from an employee-employer relationship, N.J.S.A. 34:15-
49(a). However, petitioner argues, the statute does not confer
jurisdiction upon the Division to determine the threshold
question of a worker’s employment status. Rather, the
Compensation Act applies only to those who have accepted the
statute’s provisions by entering into an employee-employer
relationship. See N.J.S.A. 34:15-7, -8. Thus, petitioner
asserts, the appellate panel’s decision improperly expanded the
Division’s limited jurisdiction under the Compensation Act to
include the resolution of disputes regarding a worker’s consent
to the provisions of the statute.
Addressing the appellate panel’s finding that the jury
charge constituted plain error, petitioner notes that the trial
court’s instruction followed the Model Jury Charge on Agency,
Model Jury Charge (Civil) § 5.10I(A), “Employer/Employee”
(Revised 2011). According to petitioner, this jury charge
substantially incorporated factors relevant to the nature of the
work. Nevertheless, petitioner acknowledges that clarification
of the charge may be warranted.
B.
Regarding the trial court’s denial of his motion to
transfer petitioner’s claim to the Division, Liebman relies on
11
N.J.S.A. 34:15-9, which states that every employment contract
“shall be presumed to have been made with reference to the
provisions” of the Act. Based on this provision, Liebman argues
that, because decedent entered into a verbal employment contract
with Liebman and failed to exempt herself from the Compensation
Act, the Division had primary jurisdiction to adjudicate the
matter.
Liebman contends that the appellate panel’s decision
follows and clarifies our decisions in Wunschel and Kristiansen,
which he asserts were premised on the notion that a controversy
should be decided in the forum best suited to adjudicate the
matter. Liebman posits that the threshold issue of a
plaintiff’s employment status is an employment matter, and that
therefore under Wunschel and Kristiansen the issue should have
been decided by the Division, the agency with the regulatory
expertise necessary to address this complex employment question.
Regarding the jury charge, Liebman contends that Model Jury
Charge (Civil) 5.10(I) was designed to instruct the jury on the
issue of respondeat superior rather than to address disputes
over a worker’s employment status in the context of the
Compensation Act. Liebman also asserts that the Appellate
12
Division properly determined that the jury charge given here
suffered from a number of deficiencies that required reversal.2
III.
Although not the basis for the Appellate Division’s
disposition, we begin by addressing the panel’s conclusion that
the Division had primary jurisdiction to decide the threshold
issue of decedent’s employment status. In determining whether
the Division has such jurisdiction, “we must be faithful to the
legislative goals of the workers’ compensation system.”
Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161, 173
(1985). We therefore briefly review the Compensation Act and
interpretive case law to provide the context necessary for our
analysis.
A.
The legislature enacted the Compensation Act in 1911, L.
1911, c. 95, to address the variety of difficulties workers
encountered in attempting to recover in tort against their
employers for work-related injuries. See Millison, supra, 101
N.J. at 174 (citing W. Prosser & W. Keeton, The Law of Torts, §
2The Appellate Division did not consider Liebman’s additional
arguments here that the charge was erroneous because it
improperly applied the term “employer” to both the employee and
independent contractor contexts and never advised the jury on
how independent contractors were paid. We find no merit to
either argument.
13
80 at 569 (5th ed. 1984)).3 The legislature sought to accomplish
this by “establish[ing] a no fault system of compensation for
workers who are injured or contract a disease in the course of
employment.” Fitzgerald v. Tom Coddington Stables, 186 N.J. 21,
31 (2006) (quoting Brock v. Pub. Serv. Elec. & Gas Co., 325 N.J.
Super. 582, 588 (App. Div. 1999), certif. denied, 163 N.J. 77
(2000)) (internal quotation marks omitted). Thus, the
Compensation Act provides employees who have sustained work-
related injuries medical treatment and limited compensation
“without regard to the negligence of the employer.” N.J.S.A.
34:15-7; see also Stancil v. Ace USA, 211 N.J. 276, 296 (2012)
(Albin, J., dissenting). “In essence, the [Compensation] Act is
a social compact, ‘an historic trade-off whereby employees
relinquish their right to pursue common-law remedies in exchange
for prompt and automatic entitlement to benefits for work-
related injuries.’” Stancil, supra, 211 N.J. at 296 (Albin, J.,
dissenting) (quoting Charles Beseler Co. v. O’Gorman & Young,
3Prior to enactment of the Compensation Act, employer liability
was greatly minimized by “the ‘unholy trinity’ of employer
defenses -- contributory negligence, assumption of risk, and the
fellow servant rule -- which served to protect the employer from
legal liability even though he had failed in his duty as master
to protect his servants.” Ibid. Further, as Professor Larson
observed, an injured worker faced significant difficulties in
getting “the usual witnesses of the accident, usually
coemployees” to testify against their employers. 3 Arthur
Larson & Lex K. Larson, Larson’s Workers’ Compensation Law §
2.03 (2006).
14
Inc., 188 N.J. 542, 546 (2006)); see also Tlumac v. High Bridge
Stone, 187 N.J. 567, 573 (2006) (noting “the remedial purpose of
the Workers’ Compensation Act” is “to make benefits readily and
broadly available to injured workers through a non-complicated
process”).
“[W]e have long recognized that this system for the
compensation of injured workers is ‘remedial social legislation
and should be given liberal construction in order that its
beneficent purposes may be accomplished.’” Cruz v. Cent. Jersey
Landscaping, Inc., 195 N.J. 33, 42 (2008) (quoting Torres v.
Trenton Times Newspaper, 64 N.J. 458, 461 (1974)). Thus, the
statute is broadly construed in favor of coverage.
B.
Mindful of the legislative purpose and goals of the
Compensation Act, we turn to the language of the statute. Under
the Compensation Act, “[w]hen employer and employee shall by
agreement, either express or implied . . . accept the provisions
of” the Compensation Act, employers shall compensate employees
for work-related injuries “arising out of and in the course of
employment . . . without regard to the negligence of the
employer[.]” N.J.S.A. 34:15-7 (emphasis added). Absent an
express disclaimer to the contrary, all parties to every
employment contract made after July 1911 are “presumed [to] have
15
accepted the provisions of [the Compensation Act] and have
agreed to be bound thereby[.]” N.J.S.A. 34:15-9.
Once the employment contract is created and the employee-
employer relationship is established,
[s]uch agreement shall be a surrender by the
parties thereto of their rights to any other
method, form or amount of compensation or
determination thereof than as provided in this
article and an acceptance of all the
provisions of this article, and shall bind the
employee and for compensation for the
employee’s death shall bind the employee’s
personal representatives.
[N.J.S.A. 34:15-8.]
This provision is intended to ensure that workers’
compensation provides the exclusive remedy for employees who
sustain work-related injuries. Wunschel, supra, 96 N.J. at 659.
As a result, “although ‘the employer assumes an absolute
liability[,] [h]e gains immunity from common-law suit, even
though he be negligent, and is left with a limited and
determined liability in all cases of work-connected injury.’”
Whitfield v. Bonanno Real Estate Grp., 419 N.J. Super. 547, 553
(App. Div. 2011) (alterations in original) (quoting Dudley v.
Victor Lynn Lines, Inc., 32 N.J. 479, 489 (1960)); see also
Toland v. Atl. Gahagan Joint Venture Dredge, No. 1, 57 N.J. 205,
207 (1970) (“The elective provisions of [N.J.S.A. 34:15-8] were
16
only intended to deny employees their traditional common law
tort remedies.”).4
“[A]scrib[ing] to the statutory words their ordinary
meaning and significance,” DiProspero v. Penn, 183 N.J. 477, 492
(2005) (citations omitted), it is clear that the benefits and
the limitations of the Compensation Act apply only to
“employees” who, by virtue of their employment agreements, have
accepted its provisions. The Compensation Act defines the term
“employee” as “synonymous with servant,” to “include[] all
natural persons, including officers of corporations, who perform
a service for an employer for financial consideration[.]”
N.J.S.A. 34:15-36.5 By contrast, independent contractors, which
are not addressed in the Compensation Act, are neither entitled
4 The New Jersey workers’ compensation scheme also allows either
the employer or the employee to elect to “reject the ordinary
system of compensatory non-fault liability,” known as “Article
II coverage,” in favor of “Article I coverage” under N.J.S.A.
34:15-1 to -7. Naseef v. Cord, Inc., 48 N.J. 317, 322 (1966).
Article I coverage provides that the employee may recover
against the employer under common-law negligence, and that “the
employee’s claim may not be defeated by the defenses of ordinary
contributory negligence (see N.J.S.A. 34:15-1), assumption of
risk (see N.J.S.A. 34:15-2; McGrath v. American Cyanamid Co., 41
N.J. 272 (1963)), or negligence of a fellow-employee (see
N.J.S.A. 34:15-2).” Ibid.
5This provision contains exemptions for “(1) employees eligible
under the federal ‘Longshore and Harbor Workers’ Compensation
Act,’ for benefits payable with respect to accidental death or
injury, or occupational disease or infection; and (2) casual
employments.” Ibid. (citations omitted). Neither exemption
applies here.
17
to benefits nor subject to the limitations of the Compensation
Act. Auletta v. Bergen Ctr. for Child Dev., 338 N.J. Super.
464, 471 (App. Div.), certif. denied, 169 N.J. 611 (2001). As
our courts have explained, an “independent contractor” is “‘one
who, carrying on an independent business, contracts to do a
piece of work according to his own methods, and without being
subject to the control of his employer as to the means by which
the result is accomplished, but only as to the result of work.’”
Ibid. (quoting Lesniewski v. W.B. Furze Corp., 308 N.J. Super.
270, 280 (App. Div. 1998)).
Accordingly, parties cannot be presumed to have accepted
the provisions of the Compensation Act, including the exclusive
remedy provision, until a threshold determination is made as to
whether the worker was an employee or an independent contractor.
With these concepts in mind, we now turn to the question of
whether the Superior Court has jurisdiction to make this
threshold determination.
IV.
A.
As Liebman notes, the Division has “the exclusive original
jurisdiction of all claims for workers’ compensation benefits
under this chapter.” N.J.S.A. 34:15-49(a). Certainly, the
Superior Court “should be steadfast in [its] readiness to resist
the assertion of jurisdiction in cases where it is evident the
18
matter should be tried elsewhere.” Singer Shop-Rite, Inc. v.
Rangel, 174 N.J. Super. 442, 447 (App. Div.), certif. denied, 85
N.J. 148 (1980). On the other hand, “[w]here a genuine question
of jurisdiction, exclusive, primary or concurrent, is involved
we perceive no statutory injunction against the trial of that
issue in either forum[.]” Id. at 446. Indeed, as one
commentator has observed, “[d]espite the exclusivity of the
workers’ compensation remedy, the Superior Court has
jurisdiction to determine the existence of the employment
relationship and such other employment issues as are raised by
way of defense to the employee’s tort action.” Pressler &
Verniero, Current N.J. Court Rules, comment 42.1 on R. 4:5-4 at
1414 (2014).
In contrast to the cases relied upon by Liebman and the
Appellate Division, here there was a genuine dispute regarding
decedent’s employment status. Petitioner has never suggested
that decedent was Liebman’s employee, and in fact maintained
that decedent was an independent contractor after Liebman raised
the exclusive remedy defense under N.J.S.A. 34:15-8. Moreover,
petitioner did not file a petition for workers’ compensation
with the Division. Thus, as the trial court noted, there was no
claim pending before the Division over which it could assert
jurisdiction. Under these circumstances, we conclude that the
19
Superior Court had jurisdiction to decide the question of
decedent’s employment status.
B.
Having determined the Superior Court had jurisdiction, we
next consider whether, as the Appellate Division found, the
trial court erred in declining to transfer plaintiff’s claim to
the Division under the doctrine of primary jurisdiction. “The
doctrine of primary jurisdiction is applicable when a case is
properly filed in the Superior Court but the court declines
original jurisdiction, referring specific issues to the
appropriate administrative body.” Magic Petroleum Corp. v.
Exxon Mobil Corp., 218 N.J. 390, 405 (2014). Thus, “when
enforcement of a claim requires resolution of an issue within
the special competence of an administrative agency, a court may
defer to a decision of that agency.” Campione v. Adamar, Inc.,
155 N.J. 245, 263-64 (1998).
“The decision to invoke the doctrine of primary
jurisdiction rests within the sound discretion of the [trial]
court.” Nordstrom v. Lyon, 424 N.J. Super. 80, 99 (App. Div.
2012). Accordingly, the trial court’s decision here should not
be disturbed on appeal unless the decision was “made without a
rational explication, inexplicably departed from established
practices, or rested on an impermissible basis.” Flagg v. Essex
20
Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (citation and
internal quotation marks omitted).
“Although no formula exists to evaluate the applicability
of primary jurisdiction,” we recently stated that “our courts
have been guided by a four-part test,” in which the following
factors are considered:
1) whether the matter at issue is within the
conventional experience of judges; 2) whether
the matter is peculiarly within the agency’s
discretion, or requires agency expertise; 3)
whether inconsistent rulings might pose a
danger of disrupting the statutory scheme; and
4) whether prior application has been made to
the agency.
[Magic Petroleum Corp., supra, 218 N.J. at 407
(quoting Boldt v. Correspondence Mgmt., Inc.,
320 N.J. Super. 74, 85, (App. Div. 1999).]
Applying these factors to the facts before us, we conclude that
the trial court did not abuse its discretion in declining to
dismiss the matter pending a determination by the Division of
decedent’s employment status.
First, the question of a worker’s employment status is a
matter that is often determined by trial judges and juries.
See, e.g., Re/Max of N.J. v. Wausau Ins. Cos., 162 N.J. 282, 286
(2000) (affirming Chancery Division’s determination of real
estate agents as “employees” under Compensation Act); see also
Hargrove v. Sleepy’s, LLC, 220 N.J. 289, 295 (2015) (addressing
test for a plaintiff’s employment status for purposes of Wage
Payment Law and Wage and Hour Law); D’Annunzio, supra, 192 N.J.
21
at 120-25 (reaffirming criteria for trial court’s determination
of plaintiff’s employment status in claims arising under
Conscientious Employee Protection Act); Pukowsky v. Caruso, 312
N.J. Super. 171, 180-83 (App. Div. 1998) (addressing trial
court’s determination of a plaintiff’s employment status in the
context of the Law Against Discrimination). Indeed, as
Professor Larson has observed, in addition to workers’
compensation, “[t]he definition of the term ‘employee’ for
purposes of vicarious liability, employers’ liability, . . .
labor legislation, unemployment compensation, social security
and miscellaneous enactments applicable to employees, has
probably produced more reported cases than any definition of
status in the modern history of law.” 3 Larson, supra, § 60.01.
Second, while we acknowledge that “[t]he forum best suited
to decide employment issues is the Compensation Court,”
Wunschel, supra, 90 N.J. at 664, the Compensation Court is in no
better position to make the threshold determination of a
worker’s employment status than the Superior Court. As
discussed above, the Superior Court is often tasked with making
this determination in a variety of contexts. Thus, this
determination is not “peculiarly within the agency’s
discretion,” or one which “requires agency expertise,” Boldt,
supra, 320 N.J. Super. at 85.
22
Third, there is no risk of inconsistent rulings because
petitioner declined to file a petition with the Division.
Consequently, we find the doctrine of primary jurisdiction does
not apply to the facts of this case.
C.
Turning to the Appellate Division’s reliance on our
precedent, we disagree that Wunschel and Kristiansen compel a
different conclusion. In Wunschel, supra, the decedent-
employee, a police officer, arranged to have Sachs, his partner
in the Jersey City Police Department, pick him up for work after
completing a shift at a second job. 96 N.J. at 655. When Sachs
arrived to pick up Wunschel, Sachs accidentally shot and killed
Wunschel. Id. at 656. Wunschel’s widow filed a workers’
compensation petition with the Division naming both employers,
and a wrongful death complaint in the Superior Court naming both
employers and Sachs. Ibid.
The Division determined that Wunschel’s death occurred
during the course of his employment with the second employer,
while the jury determined that Wunschel’s death arose during the
course of his employment with the police department. Id. at
657. Thus, we were presented in that case with a situation in
which the Division and the Superior Court reached opposite
conclusions. Id. at 657-58. Noting that “[a]voiding
inconsistent results and duplication of litigation is an aim of
23
our law,” we held that “[t]he forum best suited to decide
employment issues is the Compensation Court.” Id. at 664.
In Kristiansen, supra, a bridge worker was struck and
killed by a car after his shift had ended while on his way to an
off-site parking lot. 153 N.J. at 302-04. As in Wunschel, the
decedent’s widow filed a workers’ compensation petition with the
Division and a wrongful death action in the Superior Court, and
the key issue was whether the employee-decedent was injured
during the course of his employment. Id. at 304, 306-07. In
addressing the employer’s argument that the Division had primary
jurisdiction to decide whether the decedent’s injuries were
compensable, we noted that, “[u]nlike the Wunschel case in which
a fellow servant was sued in the Superior Court, here, no issue
has been raised that the Division cannot decide in a manner that
is binding on all the interested parties.” Id. at 311.
Because, unlike in Wunschel, the Division had jurisdiction over
the parties necessary to determine compensability, we determined
that “the Division and not the Superior Court should have
decided the compensability issues.” Id. at 311, 313.
The distinctions between these cases and the case presently
before us are significant. In both Wunschel and Kristiansen,
the plaintiffs filed workers’ compensation petitions, thereby
acknowledging that the decedents were employees rather than
independent contractors. Here, by contrast, petitioner elected
24
to file only a wrongful death action in the Superior Court, and
decedent’s employment status is vigorously disputed. Unlike in
Wunschel and Kristiansen, where the only issue raised was
compensability, no compensability arguments have been raised
here. While the sole issue in dispute here -- decedent’s
employment status -- is an employment issue, that issue falls
well within the ken of the Superior Court. Thus, we cannot
agree that the trial court was required to abstain from
resolving a question that is so often before it.
Accordingly, we reject the Appellate Division’s finding
that the Division had primary jurisdiction over the question of
decedent’s employment status.
V.
A.
We turn next to the Appellate Division’s conclusion with
respect to the jury charge. Preliminarily, we note that “[a]
jury is entitled to an explanation of the applicable legal
principles and how they are to be applied in light of the
parties’ contentions and the evidence produced in the case.”
Viscik v. Fowler Equip. Co., 173 N.J. 1, 18 (2002) (citations
and internal quotation marks omitted). Thus, a proper “jury
charge must correctly state the applicable law, outline the
jury’s function and be clear in how the jury should apply the
legal principles charged to the facts of the case at hand.”
25
Ibid. To accomplish these goals, the jury charge should be
tailored to the specific facts of the case. Reynolds v.
Gonzalez, 172 N.J. 266, 289 (2002).
When a party objects to the jury charge at trial, the
“reviewing court should reverse on the basis of that challenged
error unless the error is harmless.” Toto v. Ensuar, 196 N.J.
134, 144 (2008) (citing R. 2:10-2). An error is harmful only
where that error is “clearly capable of producing an unjust
result.” R. 2:10-2. When presented with a contested jury
charge, “a court must examine the charge as a whole, rather than
focus on individual errors in isolation.” Ibid.
B.
The first step in assessing the sufficiency of a contested
jury charge, then, requires an understanding of the legal
principles pertinent to the jury’s determination. Our courts
have utilized two different but related tests to distinguish
employees from independent contractors: (1) the “control test,”
which “is grounded in the common law master-servant
relationship”; and (2) the “relative nature of the work test,”
which is used in “‘various situations in which the control test
does not emerge as the dispositive factor.’” Lowe v. Zarghami,
158 N.J. 606, 615-16 (1999) (quoting Marcus v. E. Agric. Ass’n,
26
58 N.J. Super. 584, 597 (App. Div. 1959) (Conford, J.A.D.,
dissenting), rev’d on dissent, 32 N.J. 460 (1960)).6
Under the control test, the factfinder considers the extent
of the employer’s right to control the work of the employee.
Ibid. (citing N.J. Prop.-Liability Ins. Guar. Ass’n v. State,
195 N.J. Super. 4, 8 (App. Div.), certif. denied, 99 N.J. 188
(1984)). This test takes into consideration a variety of
employment conditions, including “the degree of control
exercised by the employer over the means of completing the
work,” “the source of the worker’s compensation,” “the source of
the worker’s equipment and resources,” “the employer’s
termination rights,” id. at 616, as well as the “right of
termination” and the “method of payment,” Aetna Ins. Co. v.
Trans Am. Trucking Serv., Inc., 261 N.J. Super. 316, 326-27
(App. Div. 1993). “The greater the degree of control exercised
by the employer, the more likely the worker will be considered
an employee.” Lowe, supra, 158 N.J. at 616.
By contrast, the relative nature of the work test “requires
a court to examine ‘the extent of the economic dependence of the
worker upon the business he serves and the relationship of the
6 We note our recent approval of the “ABC” test, which is
“derived from the New Jersey Unemployment Compensation Act,” for
use in determining whether a worker is an employee or an
independent contractor for purposes of the Wage Payment Law and
the Wage and Hour Law. Hargrove, supra, 220 N.J. at 295. For
the reasons that follow, that test does not apply here.
27
nature of his work to the operation of that business.’” Lowe,
supra, 158 N.J. at 616 (quoting Marcus, supra, 58 N.J. Super. at
603 (Conford, J.A.D., dissenting)). Under this test, the
employer’s control is “a single, but not dispositive, factor.”
Wajner v. Newark Beth Israel Med. Ctr., 298 N.J. Super. 116, 120
(App. Div. 1997); accord Lowe, supra, 158 N.J. at 617. Instead,
it “focuses on whether there is ‘substantial economic
dependence’ upon the ‘employer’ by the ‘employee’ and whether
there has been a ‘functional integration of their respective
operations.’” Aetna Ins. Co., supra, 261 N.J. Super. at 327
(quoting Smith v. E.T.L. Enters., 155 N.J. Super. 343, 352, 382
(App. Div. 1978)). As Professor Larson notes, “the control test
is in practice giving way to the relative-nature-of-the-work
test” in part to address employers’ efforts to circumvent the
inconveniences created by the Compensation Act by, for example,
“subcontracting portions of the employer’s production and
distribution process.” 3 Larson, supra, § 62.01.
“Our courts have long recognized that, in certain settings,
exclusive reliance on a traditional right-to-control test to
identify who is an ‘employee’ does not necessarily result in the
identification of all those workers that social legislation
seeks to reach.” D’Annunzio, supra, 192 N.J. at 121. For
example,
28
where the type of work requires little
supervision over details for its proper
prosecution and the person performing it is so
experienced that instructions concerning such
details would be superfluous, . . . the factor
of control becomes inconclusive, and
reorientation toward a correct legal
conclusion must be sought by resort to more
realistically significant criteria.
[Id. at 122 (quoting Marcus, supra, 58 N.J.
Super. at 597 (Conford, J.A.D., dissenting).]
In D’Annunzio, we noted in the context of a claim under
Conscientious Employee Protection Act (CEPA), that “labels can
be illusory as opposed to illuminating” when taken out of
context. Ibid. We held that, when “social legislation must be
applied in the setting of a professional person or an individual
otherwise providing specialized services allegedly as an
independent contractor,” the trial court should consider three
factors: “(1) employer control; (2) the worker’s economic
dependence on the work relationship; and (3) the degree to which
there has been a functional integration of the employer’s
business with that of the person doing the work at issue.”
Ibid.
In assessing these factors, we noted with approval the
“hybrid” test established by the Appellate Division in Pukowsky
v. Caruso, 312 N.J. Super. 171, 182-83 (App. Div. 1998).
D’Annunzio, supra, 192 N.J. at 123. In Pukowsky, which was
decided in the context of a Law Against Discrimination (LAD)
29
claim, the appellate panel identified twelve factors for courts
to consider when determining a worker’s status:
(1) the employer’s right to control the means
and manner of the worker’s performance; (2)
the kind of occupation -- supervised or
unsupervised; (3) skill; (4) who furnishes the
equipment and workplace; (5) the length of
time in which the individual has worked; (6)
the method of payment; (7) the manner of
termination of the work relationship; (8)
whether there is annual leave; (9) whether the
work is an integral part of the business of
the “employer”; (10) whether the worker
accrues retirement benefits; (11) whether the
“employer” pays social security taxes; and
(12) the intention of the parties.
[Pukowski, supra, 312 N.J. Super. at 182-83
(quoting Franz v. Raymond Eisenhardt & Sons,
Inc., 732 F. Supp. 521, 528 (D.N.J. 1990)).]
“This test is a hybrid that reflects the common law right-to-
control test,” D’Annunzio, supra, 192 N.J. at 123 (citing
Restatement (Second) of Agency, § 220 (1957)), and the “economic
realities” aspect of the nature-of-the-work test, ibid.
The Compensation Act, like CEPA and LAD, is “remedial
social legislation.” Cruz, supra, 195 N.J. at 42 (citation and
internal quotation marks omitted). In disputes over a worker’s
status under the Compensation Act, as in other social
legislation, “what matters most is that an individual’s status
be measured in the light of the purpose to be served by the
applicable legislative program or social purpose to be served.”
D’Annunzio, supra, 192 N.J. at 122 n.7. Thus, we hold that “the
30
test for determining those aspects of a non-traditional work
relationship . . . set out in Pukowski” applies in the context
of a dispute over the applicability of the Compensation Statute.
See id. at 122.
We note that this hybrid approach, which we now endorse for
purposes of determining whether the Compensation Act applies, is
not reflected in the current Model Jury Charge on Agency. To
that end, we refer this issue to the Supreme Court Committee on
Model Civil Jury Charges for the development and adoption of a
standard charge concerning the employee-independent contractor
distinction in the context of social legislation, to incorporate
the hybrid test set forth above.
C.
With these principles in mind, we must consider whether the
jury charge given here warranted reversal. Initially, we note
that the jury charge given here followed Model Jury Charge
(Civil) § 5.10I(A). “Generally speaking, the language contained
in any model charge results from the considered discussion
amongst experienced jurists and practitioners.” Flood v. Aluri-
Vallabhaneni, 431 N.J. Super. 365, 383-84 (App. Div.) (quoting
State v. R.B., 183 N.J. 308, 325 (2005)), certif. denied, 216
N.J. 14 (2013).
However, a model jury charge applied to a dispute that was
not contemplated by this Court or the Model Civil Jury Charge
31
Committee when drafting that charge “does not necessarily
reflect the approved language” set forth by this Court. Id. at
384. In that situation, “only when the Court has occasion to
address the contents of an adopted charge can . . . the trial
court and practitioners[] rest assured that the language adopted
is consistent with the Court’s instructions.” Ibid.
Here, Model Jury Charge (Civil) § 5.10I(A) was applied to
aid the jury in its determination of decedent’s employment
status in the context of social legislation. However, except
for the addition of “such other factors as may be reasonably
considered in determining whether the employer has control or
right to control the person employed,” our Model Jury Charge
(Civil) § 5.10I(A) tracks the language of section 220 of the
Restatement (Second) of Agency. See Carter v. Reynolds, 175
N.J. 402, 410 (2003). Section 220 defines “servant” for
purposes of establishing a principal’s liability in tort under
the doctrine of respondeat superior. Restatement (Second) of
Agency § 220 (1958).
As this Court has acknowledged, “the test for an employer-
employee relationship differs when one examines for tort-based
vicarious liability purposes . . . or for social legislation
purposes such as for workers’ compensation coverage.”
D’Annunzio, supra, 192 N.J. at 122 n.7 (quoting 3 Larson, supra,
§ 60.04). Because the jury charge given here was used in a
32
context different from the specific purpose for which the charge
was adopted, the presumption of propriety that attaches to a
trial court’s reliance on the model jury charge does not apply.
The question, therefore, is whether Model Jury Charge
(Civil) § 5.10I(A) was appropriately molded to the facts of this
case, or, if not, whether “a different outcome might have
prevailed had the jury been correctly charged.” Reynolds,
supra, 172 N.J. at 289. A comparison between Model Jury Charge
(Civil) § 5.10I(A) and the hybrid approach we now endorse shows
that the trial court did not instruct the jury as to each factor
outlined in Pukowski and D’Annunzio. Nevertheless, to the
extent such omissions were error, under the unusual facts of
this case, we do not find the charge so erroneous as to require
reversal.
Here, decedent entered into a loosely defined service
contract, which was made terminable at will by either party.
Decedent, who was not a caretaker by trade, had no social
security number, and was not permitted under the terms of her
visa to work in this country, agreed to provide general services
on an as-needed basis, and retained the discretion to determine
the parameters of that service.
The trial judge correctly informed the jury that “it is not
important whether or not [Liebman] actually ever exercised
control but rather the extent to which the right to control
33
existed.” The judge then cited a number of factors relevant to
that determination, including (1) the parties’ belief regarding
the employment relationship, (2) the degree of skill necessary
for performance of the work, (3) the length of time anticipated
for the performance of the services, (4) the regularity and
method of payment, (5) the employer’s lack of payroll
deductions, (6) who provides the supplies necessary for the
work, and (7) whether the employment was terminable at will.
The judge also instructed the jury to consider “such other
factors as may be reasonably considered” to assess whether
Liebman “controlled or had the right to control” decedent. Not
including the catchall provision, these factors account for
seven of the twelve factors identified in Pukowski and adopted
for use in the context of social legislation in D’Annunzio.
The jury charge failed to instruct the jury with regard to
the importance of whether decedent’s employment was supervised
or unsupervised. However, the record indicates that, apart from
Ross “occasionally” checking in on decedent and her father,
decedent’s work as Liebman’s caretaker was entirely
unsupervised. Indeed, Ross testified that decedent maintained
“a lot of independence” in the performance of her duties.
The jury charge also failed to instruct the jury on the
importance of whether there was an annual leave policy, whether
decedent accrued retirement benefits, and whether Liebman paid
34
social security taxes. However, each of these factors suggested
that decedent was an independent contractor: no retirement
benefits were contemplated, Liebman paid no social security
taxes, and there was no indication of an annual leave policy.
Accordingly, inclusion of these factors in the jury charge would
have supported rather than undercut the jury’s determination.
Because the omission of these factors did not have the capacity
to change the jury’s determination, the error did not warrant
reversal. Viscik, supra, 173 N.J. at 18.
Additionally, the jury charge did not instruct the jury
regarding the importance of whether decedent’s work was an
integral part of Liebman’s business. This factor addresses a
situation where the employer, who runs a business composed of
two or more overlapping operations, subcontracts a portion of
the work in furtherance of his or her core business. See 3
Larson, supra, § 62.02. Because Liebman did not run a business,
let alone a complex business with multiple operations, this
consideration does not apply.
The Appellate Division held that the trial court’s failure
to instruct the jury on the relative importance of the worker’s
economic dependence upon the employer was fatal because
“decedent would appear to have been entirely economically
dependent on Liebman.” Kotsovska, supra, 433 N.J. Super. at
548. We agree that the degree of a worker’s economic dependence
35
upon an employer is an important consideration in workers’
compensation disputes. See, e.g., D’Annunzio, supra, 192 N.J.
at 122; Caicco v. Toto Bros., Inc., 62 N.J. 305, 309 (1973);
Hannigan v. Goldfarb, 53 N.J. Super. 190, 205 (App. Div. 1958).
However, this consideration was misapplied here.
A worker’s economic dependence upon an employer is a factor
to be considered when a worker performs a function that
constitutes a part of the employer’s business. See Re/Max of
N.J., supra, 162 N.J. at 286 (finding real-estate agents to be
employees of real-estate brokers in part because “it is only the
broker that can lawfully enforce a client’s obligation to pay
[the agent’s] commission”). This consideration looks to whether
the “decedent’s labor was a cog in the wheel of [the employer’s]
operation as a subcontractor of [the employer] in as realistic a
sense as the [work] being done by [the employer’s] regular
employees.” Caicco, supra, 62 N.J. at 310. Further, “[t]he
independence of [the worker] is not to be determined by looking
at the [worker] or job alone, but by judging how independent,
separate and public his [or her] business service is in relation
to a particular employer.” Dee v. Excel Wood Prods. Co., 86
N.J. Super. 453, 460 (App. Div.) (internal quotation marks and
citation omitted), certif. denied, 44 N.J. 586 (1965). Thus,
this assessment is considered together with the factor
addressing the integration of the employee’s business with that
36
of the employer’s. See D’Annunzio, supra, 192 N.J. at 122-23
(holding “the worker’s economic dependence on the work
relationship,” along with the other two considerations, is
assessed under the twelve-part Pukowski factor test).
Here, decedent lived with Liebman and drew most, if not all
of her income from her employment as Liebman’s caretaker.7
However, as previously noted, decedent’s employment was not in
furtherance of Liebman’s business. Thus, considering the nature
of decedent’s employment, it was not reversible error to fail to
include this consideration in the jury charge.
Finally, we address the Appellate Division’s conclusion
that the portion of the trial court’s instruction explaining
“that the lack of payroll deductions and payment in cash are
factors weighing against a finding of employment was incomplete
and misleading.” These factors have been “de-emphasized,” as
the appellate panel observed, see Brower v. Rossmy, 63 N.J.
Super. 395, 405-06 (App. Div. 1960), in the sense that our
courts have recognized the comparative value of the nature-of-
the-work test over the control test in the context of social
legislation, see D’Annunzio, supra, 192 N.J. at 121-22; Caicco,
supra, 62 N.J. at 310. However, no case has stated that the
7 As the record indicates, decedent’s daughter and son-in-law
agreed to provide for any of decedent’s healthcare costs, and
there is some indication that decedent may have been drawing a
pension.
37
control test no longer applies. To the contrary, we have
incorporated without reservation the control factors, including
the method of payment and whether the employer deducts payroll
taxes, into the hybrid analysis adopted in D’Annunzio, supra,
192 N.J. at 121-22. Moreover, after reciting the control
factors, the trial judge instructed the jury that it “may give
whatever weight you deem appropriate to the fact[s] as you find
to exist to reach your decision.” Considering the jury charge
as a whole, we disagree that it was incomplete or misleading
merely because it instructed the jury that lack of payroll
deductions and the method of payment are factors for the jury to
consider.
In conclusion, “[a]lthough the charge could have been more
artfully drafted,” Mogull v. CB Commercial Real Estate Grp.,
Inc., 162 N.J. 449, 466 (2000), the charge “did not misinform
the jury as to the controlling law and was neither ambiguous nor
misleading,” R.B., supra, 183 N.J. at 325. To the extent that
it omitted relevant factors for consideration under the
Pukowski-D’Annunzio approach we now endorse, those factors
inured to the benefit of petitioner, and therefore did not
result in prejudice to Liebman. As such, we find that the
charge, though flawed, does not warrant reversal.
VI.
38
Accordingly, we reverse the judgment of the Appellate
Division, and reinstate the jury’s verdict.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,
PATTERSON and FERNANDEZ-VINA join in JUSTICE SOLOMON’s opinion.
JUDGE CUFF (temporarily assigned) did not participate.
39
SUPREME COURT OF NEW JERSEY
NO. A-89 SEPTEMBER TERM 2013
ON CERTIFICATION TO Appellate Division, Superior Court
ESTATE OF MYROSLAVA
KOTSOVSKA, by OLENA
KOTSOVSKA, Administratrix,
Plaintiff-Appellant,
v.
SAUL LIEBMAN,
Defendant-Respondent.
DECIDED June 11, 2015
Chief Justice Rabner PRESIDING
OPINION BY Justice Solomon
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
REVERSE AND
CHECKLIST
REINSTATE
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE PATTERSON X
JUSTICE FERNANDEZ-VINA X
JUSTICE SOLOMON X
TOTALS 6