DONALD SERVAIS v. OCEAN WHOLESALE NURSERY, LLC (DIVISION OF WORKERS' COMPENSATION) ( 2022 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2988-20
DONALD SERVAIS,
Petitioner-Respondent,
v.
OCEAN WHOLESALE
NURSERY, LLC,
Respondent-Appellant.
_________________________
Argued June 8, 2022 – Decided July 14, 2022
Before Judges Gilson, Gooden Brown, and Gummer.
On appeal from the New Jersey Department of Labor
and Workforce Development, Division of Workers'
Compensation, Claim Petition No. 2018-28453.
John H. Geaney argued the cause for appellant
(Capehart & Scatchard, PA, attorneys; John H. Geaney
and Dana M. Gayeski, of counsel and on the briefs).
Victoria S. Kavanagh argued the cause for respondent
(Kavanagh & Kavanagh, LLC, attorneys; Victoria S.
Kavanagh, on the brief).
PER CURIAM
Ocean Wholesale Nursery LLC (the Nursery) appeals from an order
denying its motion to dismiss Donald Servais's workers' compensation petition
and from a final judgment awarding petitioner Servais $75,516. Because the
compensation judge erred in denying the motion to dismiss, we reverse the order
denying the motion to dismiss and vacate the final judgment.
I.
The Nursery grows and sells landscaping materials. Petitioner worked for
the Nursery for approximately five years. He was a nursery manager. On
January 31, 2017, the parties entered into a "CONFIDENTIAL SETTLEMENT
AGREEMENT AND GENERAL RELEASE" (the Agreement). In the
Agreement, the parties stated they had "concluded their business relationship"
and "wish[ed] to amicably resolve any and all disputes between them, and [were]
entering into this Agreement for the purposes of settling, compromising and
resolving any and all claims that [petitioner] has or may have against the
[Nursery] . . . ."
In consideration of petitioner entering into the Agreement "and in full and
complete satisfaction of any and all of his actual and potential claims against the
[Nursery]," the Nursery agreed to pay him $5,000. In paragraph five of the
Agreement, petitioner agreed that consideration would "constitute the entire
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amount of consideration provided to him under this Agreement" and agreed he
would "not seek any further compensation for any other damages, costs,
disbursements or attorneys' fees in connection with any of the matters
encompassed by this Agreement, any aspect of his relationship with the
[Nursery], or otherwise." Petitioner also "acknowledge[d] and agree[d] that, as
of the date he sign[ed] this Agreement, he ha[d] been properly paid for all work
performed for or on behalf of the [Nursery] and ha[d] not sustained any work-
related illness or injuries for which he ha[d] not already filed a claim."
In paragraph six of the Agreement, petitioner released the Nursery from
"any and all actual or potential claims, charges, demands, actions or liabilities
of any kind, known or unknown, which have arisen, or which may arise, by any
reason whatsoever on or before the date upon which [petitioner] signs this
Agreement . . . ."
Paragraph seven of the Agreement is entitled in bold "Exceptions." It
provided:
The release contained in [p]aragraph [six] above does
not affect or limit: (i) claims that may arise after the
date [petitioner] signs this Agreement; (ii) [petitioner's]
right to enforce this Agreement; (iii) [petitioner's] right
to receive benefits for occupational injury or illness
under the Workers' Compensation Law, or (iv) any
other claims that, under controlling law, may not be
released by private agreement.
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More than twenty months after he had signed the Agreement in which he
represented he had not sustained any work-related injury for which he had not
already filed a claim, petitioner on October 17, 2018, filed an employee claim
petition with the Division of Workers' Compensation. In the petition, petitioner
alleged he had experienced an injury of "right hand three finger amputati on"
while "cutting pallets" on January 26, 2016, more than two years and eight
months before he filed the petition. 1
On January 18, 2019, the Nursery moved to dismiss the petition with
prejudice for lack of jurisdiction, arguing petitioner had failed to file a claim
within the two-year statutory period under N.J.S.A. 34:15-51. The Nursery
included in its motion a copy of the Agreement. The Nursery contended the
Agreement "did not in any way limit petitioner's right to file a workers'
compensation claim against . . . [the] Nursery" and that even though the
"Agreement made clear to petitioner that he could bring a workers'
compensation claim against [the Nursery], petitioner failed to file any claim
petition within the statutory period under N.J.S.A. 34:15-51." The Nursery also
asserted petitioner was an independent contractor, not an employee.
1
In his initial petition, petitioner stated the accident had occurred on January
28, 2016. In an amended petition, he corrected the date to January 26, 2016.
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Petitioner opposed the motion with a letter brief from his counsel.
Asserting he had been "misled into believing that he was receiving payment on
his workers' compensation claim which was executed on January 31, 2017,"
petitioner contended his claim was timely because he had filed it within two
years of executing the Agreement. Petitioner did not support that assertion with
an affidavit or certification regarding, for example, any misleading statement
made to him. Instead, his counsel relied exclusively on purportedly ambiguous
language in the Agreement, arguing paragraphs five and six of the Agreement
"would reasonably lead [p]etitioner into believing that the $5,000[] was also a
partial payment for his severe work related injury."
Instead of reviewing the Agreement and making a finding as to whether it
was ambiguous as petitioner had argued, the judge of compensation conducted
a four-day hearing, during which petitioner, the Nursery's owner, and the
Nursery's former general manager testified. At the outset, counsel for the
Nursery stated, "all issues remain in dispute including employment and arising
out of and during the course of employment," but that because the statute-of-
limitations issue was jurisdictional, the Nursery was prepared at that time to
proceed "solely on its [m]otion to [d]ismiss for [l]ack of [j]urisdiction."
Petitioner's counsel agreed to those stipulations and argued the payment made
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pursuant to the Agreement "represented an unlawful settlement as it was not
approved by a judge of compensation" and "would have tolled the statute for
another two years under our law if it is deemed a payment." The judge
confirmed questioning was limited to "the agreement and the date it was signed
and the date he got a payment."
After the four-day hearing ended, the compensation judge placed a
decision on the record denying the Nursery's motion. The judge recognized
filing a workers' compensation claim concerning a January 26, 2016 injury on
October 17, 2018, "under normal circumstances, would have exceeded the
[s]tatute of [l]imitations by almost nine months and would have resulted in this
[j]udge granting the [Nursery's] motion for dismissal."
The judge found that because the Nursery's attorney had prepared the
Agreement, "any ambiguity should be construed against the [Nursery] and for
the [p]etitioner." The judge posited section (i) of paragraph seven, which
excluded from the Agreement "claims that may arise after the date [petitioner]
signs this Agreement," might "lead . . . [p]etitioner to believe that any incidents
that arose before he signed this [A]greement were included therein." The judge
faulted section (iii) of paragraph seven, which excluded "[petitioner's] rights to
receive benefits for occupational injury or illness under the Workers'
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Compensation law," for "not mention[ing] a traumatic injury, which [p]etitioner
surely suffered." He found that omission to be "ambiguous and misleading."
The judge also stated the Agreement "[n]owhere . . . seek[s] to address the loss
of parts of three of the [p]etitioner's fingers," "[i]nform[] him of his right to file
a [w]orkers' [c]ompensation claim and his inability to waive same," or "specify
or address" the out-of-pocket expenses related to the use of his truck and
equipment for which petitioner was seeking reimbursement.
The judge concluded he could "only assume [the Agreement] included any
and all claims, including the loss of [petitioner's] fingers." The judge held the
$5,000 payment made pursuant to the Agreement "included the fingers, and
thereby extended the [s]tatute of [l]imitations." Even though the hearing had
been limited to the Agreement and the statute-of-limitations issue, the judge also
held petitioner was an employee of the Nursery and had lost his fingers at work
and not at home. The judge issued an order on February 18, 2020, denying the
Nursery's motion to dismiss and finding petitioner was an employee of the
Nursery and his injury had "ar[isen] out of and in the course of his employment."
Following the compensation judge's decision denying the motion to
dismiss, the parties proceeded to a trial regarding petitioner's injuries, the extent
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of any disability, and the permanency of his impairment. The trial was based on
petitioner's testimony and medical and expert reports.
In a decision placed on the record, the judge held the accident had caused
petitioner to suffer a permanent disability and awarded petitioner $75,516. The
judge found the $5,000 payment pursuant to the Agreement had included $1,000
for the loss of petitioner's fingers. When asked to explain his determination that
$1,000 of the $5,000 payment was for the loss of petitioner's fingers, the judge
stated: "In other words, of the $5,000 agreement, I have assigned $1,000 to the
fact that he lost his fingers. So that's a credit to the [Nursery]." The judge
provided no other explanation and no factual support for his finding. The judge
memorialized his decision in a final judgment, ordering, among other things,
that the Nursery was "entitled to a $1,000[] credit for the portion of the payment
petitioner received pursuant to the . . . Agreement . . . and which this court has
deemed a payment of compensation within the meaning of the Worker's
Compensation Act . . . ."
The Nursery moved for a stay of the judgment pending appeal. The
Nursery argued the judge had erred in extending the statute of limitations, in
deciding the employment and compensability issues based on the first limited
hearing, and in arbitrarily assessing $1,000 of the $5,000 payment "for a never
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discussed workers' compensation payment," for which "no evidence was entered
into the record regarding any apportionment and no testimony was elicited
regarding apportionment." In a decision denying the motion, the judge rejected
the Nursery's argument regarding the arbitrariness of his allocation of $1,000 to
the loss of petitioner's fingers, finding "[t]he [A]greement for $5,000 supposedly
just for separation of [p]etitioner from . . . [the] Nursery is against public policy
and [it] would be a tragedy to allow it to stand . . . ."
On appeal, the Nursery argues the compensation judge erred by (1)
misconstruing the $5,000 "employment separation payment" as a worker's
compensation payment; (2) violating the Nursery's due-process rights by
determining petitioner was an employee and that he had been injured in the
course of his employment without holding a proper trial on those issues; and (3)
arbitrarily apportioning the $5,000 payment into a $4,000 employment
separation payment and a $1,000 work injury payment.
II.
Settlement agreements are "governed by basic contract principles, . . .
and, 'absent a demonstration of "fraud or other compelling circumstances,"' a
court should enforce a settlement agreement as it would any other contract."
Capparelli v. Lopatin, 459 N.J. Super. 584, 603-04 (App. Div. 2019) (quoting
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Jennings v. Reed, 381 N.J. Super. 217, 227 (App. Div. 2005)). "'[C]ourts should
discern and implement the intentions of the parties[,]' and not 'rewrite or revise
an agreement when the intent of the parties is clear.'" Id. at 604 (quoting Quinn
v. Quinn, 225 N.J. 34, 45 (2016)). "Thus, when the intent of the parties is plain
and the language is clear and unambiguous, a court must enforce the agreement
as written, unless doing so would lead to an absurd result." Ibid. (quoting Quinn,
225 N.J. at 45).
A court should give the parties an "opportunity to illuminate the contract's
meaning through the submission of extrinsic evidence" only if the contractual
language is ambiguous. Ibid. "To the extent that there is any ambiguity in the
expression of the terms of a settlement agreement, a hearing may be necessary
to discern the intent of the parties at the time the agreement was entered and to
implement that intent." Ibid. (quoting Quinn, 225 N.J. at 45).
"Interpretation and construction of a contract is a matter of law for the
court subject to de novo review." Spring Creek Holding Co. v. Shinnihon U.S.A.
Co., 399 N.J. Super. 158, 190 (App. Div. 2008) (quoting Fastenberg v.
Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998)); see also
Capparelli, 459 N.J. Super. at 605. "[W]e accord no special deference to a trial
court's interpretation of an agreement entered into by the parties." Capparelli,
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459 N.J. Super. at 605; see also Hager v. M&K Constr., 246 N.J. 1, 13 (2021)
(holding in a workers'-compensation case, "we review the court's legal findings
and construction of statutory provisions de novo").
The Workers' Compensation Act (the Act), N.J.S.A. 34:15-1 to -147,
provides a time-bar for claims seeking compensation in connection with a work-
related accident. N.J.S.A. 34:15-51; see also Sheffield v. Schering Plough
Corp., 146 N.J. 442, 453 (1996). An employee seeking compensation under the
Act for injuries sustained in a work-related accident must submit a petition to
the Division of Workers' Compensation "within two years after the date on
which the accident occurred" unless the employee and employer already
"effected" a settlement of the employee's claim. N.J.S.A. 34:15-51. If "a part
of the compensation has been paid by the employer," the employee must file the
claim "within two years after the last payment of compensation . . . ." Ibid. The
two-year statute of limitations will toll if "the total pattern of conduct [of an
employer] would be likely to lull an injured employee into a false sense of
security which may cause him [or her] to fail to file a timely petition." Witty v.
Fortunoff, 286 N.J. Super. 280, 284 (App. Div. 1996).
In Sheffield, 146 N.J. at 453-55, the Court held an employer's provision
of medical treatment for a work-related injury or arrangement of payment for
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that treatment could be considered a "payment of compensation" that delays the
running of the statute of limitations. In Witty, 286 N.J. Super. at 282, after
several months of receiving medical treatment for a work-related injury paid by
his employer's workers' compensation carrier, the petitioner received a letter
from the carrier advising him his condition was not related to his work accident
and the carrier would no longer pay for his medical treatment. We held the
statute ran from the date of the letter, not the date of the accident. Id. at 284.
None of those circumstances was present here. None of them was even
alleged in petitioner's opposition to the Nursery's motion to dismiss. In fact,
petitioner concedes the Nursery did not provide or pay for any of his medical
treatment. His opposition was based entirely on his argument that the
Agreement was ambiguous. Reviewing the Agreement de novo, we perceive no
ambiguity. The plain language of the Agreement expressly excluded petitioner's
workers' compensation claim.
Because petitioner's opposition to the Nursery's motion to dismiss was
based entirely on the alleged ambiguity of the Agreement, the judge erred in
conducting a four-day hearing before deciding whether the Agreement was
ambiguous. After conducting that hearing, he erred in finding the Agreement
ambiguous.
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Contrary to petitioner's argument, paragraphs five and six of the
Agreement would not reasonably lead a person to believe that the $5,000
payment under the Agreement was also a partial payment for his work-related
injury because paragraph seven of the Agreement, clearly entitled in bold
"Exceptions," expressly stated that the release in the Agreement did not "affect
or limit" his right to receive benefits for occupational injury under the Workers'
Compensation Law. As alleged by petitioner, the loss of his fingers was an
occupational injury for which he seeks compensation under the Act. Thus, his
claim was clearly and unambiguously excluded under the Agreement. We also
perceive no inconsistency between the language of the Agreement and the
language of the Act, as argued by petitioner. Compare the Agreement
(excluding from the Agreement petitioner's "right to receive benefits for
occupational injury or illness under" the Act), with N.J.S.A. 34:15-7 (providing
an employee with a right to receive "compensation for personal injuries to . . .
[the] employee by accident arising out of and in the course of employment").
The judge's assumption the Agreement "included any and all claims,
including the loss of [petitioner's] fingers" is directly contrary to the express
language of the Agreement excluding certain claims, including workers'
compensation claims. A judge can't "assume" an agreement includes all claims
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when it expressly excludes some claims. That section (i) of paragraph seven
excluded from the Agreement "claims that may arise after the date [petitioner]
signs this Agreement" does not render meaningless the other expressly
enumerated exceptions for claims that arose before petitioner signed the
Agreement.
The judge's finding that $1,000 of the $5,000 payment of the agreement
was payment for petitioner's loss of fingers has no basis in the record evidence.
The judge faulted the agreement for not addressing petitioner's loss of his fingers
and for failing to inform petitioner of "his right to file a [w]orkers'
[c]ompensation claim and his inability to waive same." Yet, in the Agreement,
petitioner did not waive his right to file a workers' compensation claim. To the
contrary, in the Agreement, petitioner expressly reserved his right to file a
workers' compensation claim. He just didn't do so timely.
The Agreement was not ambiguous. It clearly excluded workers'
compensation claims and was not a resolution of any workers' compensation
claim. Thus, the $5,000 payment under the Agreement was not related to any
work-related injury and did not have the effect of tolling the two-year statute of
limitations under the Act. Accordingly, we reverse the order denying the motion
to dismiss and vacate the final judgment. Because we reverse the order denying
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the motion to dismiss and vacate the final judgment, we need not reach the
Nursery's remaining arguments.
Reversed and vacated. We do not retain jurisdiction.
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