GEORGE A. WILHELM VS. RYDER LOGISTICS & TRANSPORTATION SOLUTIONS (NEW JERSEY DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT) (CONSOLIDATED)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3770-18
A-3792-18
A-3797-18
A-3798-18
GEORGE A. WILHELM,
Petitioner-Appellant,
APPROVED FOR PUBLICATION
v. June 21, 2021
APPELLATE DIVISION
RYDER LOGISTICS &
TRANSPORTATION SOLUTIONS
and SECOND INJURY FUND,
Respondents-Respondents.
THOMAS H. BOZARTH, SR.,
Petitioner-Appellant,
v.
BURLINGTON COUNTY and
SECOND INJURY FUND,
Respondents-Respondents.
JOSEPH SCHIAZZA,
Petitioner-Appellant,
v.
WESTERN OILFIELD SUPPLY
and SECOND INJURY FUND,
Respondents-Respondents.
WILLIAM E. PIERCE, JR.,
Petitioner-Appellant,
v.
CBF TRUCKING and
SECOND INJURY FUND,
Respondents-Respondents.
Argued April 19, 2021 – Decided June 21, 2021
Before Judges Currier, Gooden Brown and
DeAlmeida.
On appeal from the New Jersey Department of Labor
and Workforce Development, Division of Workers'
Compensation, Claim Petition Nos. 1993-59037,
1994-11045, 2002-18766, 2003-23322, and 2006-
33823.
Robert A. Petruzzelli argued the cause for appellants
(Jacobs, Schwalbe and Petruzzelli, PC, attorneys;
Robert A. Petruzzelli, on the briefs).
Cheryl B. Kline, Deputy Attorney General, argued the
cause for respondent Second Injury Fund (Gurbir S.
Grewal, Attorney General, attorney; Melissa H. Raksa,
Assistant Attorney General, of counsel; Cheryl B.
Kline, on the briefs).
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Walter F. Kawalec, III, argued the cause for
respondent Ryder Logistics & Transportation
Solutions (Marshall Dennehey Warner Coleman &
Goggin, PC, attorneys, join in the brief of respondent
Second Injury Fund).
Kelly A. Grant argued the cause for respondent
Burlington County (Malamut and Associates, LLC,
attorneys; Kelly A. Grant, of counsel and on the brief).
Dominick Fiorello argued the cause for respondent
Western Oilfield Supply (Styliades & Jackson,
attorneys; Dominick Fiorello, on the brief).
Susan Stryker argued the cause for respondent CBF
Trucking (Bressler, Amery & Ross, PC, attorneys;
Susan Stryker and Michael J. Morris, of counsel and
on the brief).
The opinion of the court was delivered by
CURRIER, J.A.D.
In these four back-to-back appeals, we consider whether N.J.S.A. 34:15-
95.5 requires a triennial redetermination of petitioners' combined awards of
state workers' compensation disability benefits and social security disability
benefits (SSD). Because our Legislature did not include a cost-of-living
increase in the statute, and 42 U.S.C. § 424a(d) explicitly states a triennial
redetermination is not applicable in states that calculate their benefits in the
manner New Jersey does, we affirm. Petitioners are not entitled to a
redetermination of benefits.
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Petitioners each collect total and permanent disability workers'
compensation benefits and SSD. Pierce and Schiazza's applications for SSD
benefits were on appeal when they received their total disability orders.
Wilhelm's application for SSD benefits was pending. Each final order required
petitioner to "immediately notify the [r]espondent and Second Injury Fund" if
SSD is approved. And "[t]he petitioner shall reimburse the [r]espondent and
the Second Injury Fund for any workers' compensation benefits paid to
[p]etitioner in excess of the offset rate during the period of time [p]etitioner
has received [SSD] . . . ."
After Schiazza, Pierce, and Wilhelm were approved for SSD, the Second
Injury Fund (Fund) moved for reimbursement of the excess benefits pai d prior
to application of the statutory offset. Petitioners opposed reimbursement and
sought a recalculation of their benefit rates to include a triennial
redetermination of their average current monthly earnings (ACE). Bozarth
moved to reopen his case, also seeking a redetermination of his benefits. 1
The cases were consolidated and tried before the judge of compensation
over several dates in 2016 and 2017.
1
Unlike the other petitioners, Bozarth was approved for SSD prior to the entry
of the final order. Therefore, the order included the reduced rate according to
the reverse offset with benefits calculated until April 2022, when Bozarth turns
sixty-two.
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The Fund produced Larry Crider as its witness. At the time of trial in
2016, Crider had been the Administrator of Special Compensation Funds for
the New Jersey Department of Labor since 1990. The office administers both
the Fund and the Uninsured Employer's Fund, handles compliance enforcement
for workers' compensation insurance, and operates the discrimination
complaint division.
In 1980, Crider became involved in the processing of calculations for the
Fund under the Workers' Compensation Act in conjunction with the social
security offset under N.J.S.A. 34:15-95.5. At that time, he was working for
the controller's office as an assistant controller when he was tasked to assist
the Division of Workers' Compensation in "implementing . . . the special
adjustment benefits, which included the offsets." Crider worked with
compensation judges Alan Napier and Michael Cunningham.
Crider testified he and the judges agreed that the formula enunciated in
N.J.S.A. 34:15-95.5 requires an offset if the "total of the weekly worker's
compensation benefits and the weekly equivalent of the social security benefit
exceed[s] [eighty] percent of the ACE." The statute did not include any cost-
of-living increases. According to Crider, the legislative history did not reflect
any intent to include a triennial review associated with the offset calculation.
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Crider recalled that in 2004 or 2005, an attorney sent a letter to the
Office of Special Compensation Funds inquiring whether petitioners under the
age of sixty-two receiving total and permanent disability and SSD were
entitled to a triennial redetermination of ACE. After receiving the letter, the
Director of the Division of Workers' Compensation, Chief Judge Calderone ,
asked for Crider's input. Crider requested that Glenn Sklar, the Associate
Commissioner of Disability Programs at the Social Security Administration,
provide clarification whether a triennial redetermination of ACE was
applicable in reverse offset states. Crider also conducted his own research.
In Sklar's response to Crider's query, the Associate Commissioner
confirmed that Social Security was precluded from taking a reduction in SSD
in a reverse offset state. In addition, the Social Security operations manual
instructed that a reverse offset existed for permanent total disability and
subsequent Fund benefits in New Jersey.
Crider concluded that N.J.S.A. 34:15-95.5 did not support a triennial
redetermination. He also noted that 42 U.S.C. § 424a(d) specifically excluded
a reverse offset state from performing a triennial redetermination.
During his trial testimony, Crider also explained the method for
calculating the offset for each of the petitioners' awards and stated the
calculations were accurate and in compliance with N.J.S.A. 34:15-95.5.
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Petitioners presented Alan Polonsky as a witness – an attorney with
thirty years of experience handling Social Security benefits claims. Polonsky
was a staff attorney at the Social Security Administration Office of Hearing
and Appeals for approximately ten years, where he drafted decisions for an
administrative law judge determining whether individuals were disabled. He
left that position in 1987 and entered private practice where he began
representing social security claimants, primarily litigating disability
determinations, eligibility for benefits, and verifying whether the benefits are
being properly paid. Polonsky said he uses a computer application to calculate
benefits.
Polonsky agreed he had no experience drafting social security legislation
or promulgating rules for the Social Security Administration or in the workers'
compensation arena. He admitted he did not handle workers' compensation
cases and had limited involvement in the application of the workers'
compensation statutes.
Polonsky testified similarly to Crider regarding the calculation of
benefits when a petitioner is receiving both SSD and workers' compensation
benefits. He confirmed that if the total benefits exceed what the petitioner
earned before becoming disabled, the benefits award is capped at eighty
percent of the petitioner's earnings before they became disabled – the ACE.
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He explained the cap was in place to ensure petitioners were not making more
money than they did pre-disability so that petitioners would not be dissuaded
from returning to the workforce.
Polonsky likened the triennial redetermination of the ACE to a cost-of-
living adjustment. He also explained that reverse offset meant "that instead of
the Social Security Administration reducing the Social Security benefits, the
Social Security Administration pays the full benefit they would pay, and the
insurance carrier is the one that gets the benefit of the reduction in payment."
In a reverse offset state, the workers' compensation benefits are reduced, not
the SSD.
Polonsky conceded he had never seen a triennial redetermination applied
to a petitioner under age sixty-two who was receiving New Jersey total
disability and permanent workers' compensation benefits. And he agreed that
because New Jersey is a reverse offset state, triennial redetermination would
not be applicable.
In a comprehensive, well-reasoned oral decision issued December 13,
2018, the judge of compensation found N.J.S.A. 34:15-95.5 did not compel a
triennial redetermination of ACE to a person collecting permanent workers'
compensation benefits and SSD. The compensation court noted N.J.S.A.
34:15-95.5 did not mention a triennial redetermination of ACE. Nor did the
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legislative history accompanying the statute. Therefore, the judge of
compensation concluded the Legislature did not intend either a cost-of-living
increase or a triennial redetermination. The judge discerned no conflict
between federal and state law and stated that "N.J.S.A. 34:15-95.5 supersedes
and takes precedence over the manner that New Jersey is to interpret its own
statute."
The compensation court relied on several authorities in reaching its
determination. One of the authorities was the Social Security Administration's
program operations manual system, which contains the Social Security
Administration's policies. The manual advises that a reverse offset exists in
New Jersey for claimants receiving permanent total disability workers '
compensation benefits and SSD. In addition, the compensation court noted the
portion of Sklar's letter which stated: "[A] Triennial Redetermination of ACE
is unnecessary prior to the age of [sixty-two] because full disability insurance
benefits are already being paid due to the reverse offset provisions, therefore,
there is no offset applied."
The compensation court found petitioners did not present any controlling
authority to support their claim that 42 U.S.C. § 424a(f) mandated New Jersey
to conduct a triennial redetermination of ACE. To the contrary, the court
found petitioners disregarded the provision in 42 U.S.C. § 424a(d) stating that
A-3770-18
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triennial redetermination of ACE is not applicable in reverse offset states such
as New Jersey.
The compensation court denied petitioners' motions for a triennial
redetermination and granted respondents' and the Fund's motions for the SSD
offset and for reimbursement of any overpayments.
On appeal, petitioners renew their argument that they are entitled to a
triennial redetermination of ACE under N.J.S.A. 34:15-95.5 until they reach
the age of sixty-two. They contend the statute does not comply with 42 U.S.C.
§ 424a(f).
The Fund raises a procedural bar, contending petitioners are precluded
from asserting the triennial redetermination issue because it was not presented
prior to the entry of their total disability awards. In addition, respondents all
assert there is no support in the statutory language or legislative history of
N.J.S.A. 34:15-95.5 for a triennial redetermination of ACE.
Although counsel discussed the procedural bar with the judge of
compensation during oral argument, the court did not address the issue in its
decision.
An order approving settlement is final and bars "any subsequent action
or proceeding, unless reopened by the Division of Workers' Compensation or
appealed . . . ." N.J.S.A. 34:15-58. The right to reopen a matter is established
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in N.J.S.A. 34:15-27, which provides that "a formal award, determination,
judgment, or order approving settlement may be reviewed within two years
from the date when the injured person last received a payment on the ground
that the incapacity of the injured employee has subsequently increased." Ibid.
A judgment or award also may be re-opened "at any time on the ground that
the disability has diminished." Ibid.
Here, petitioners were awarded total and permanent disability benefits
through orders approving settlements. Bozarth and Wilhelm have collected
benefits since 2003 and 2004 respectively. Schiazza and Pierce began
collecting benefits in 2009 and 2010. None of the petitioners raised the
triennial redetermination issue prior to the entry of their total and permanent
disability awards. Nor have any of the petitioners argued their disability has
subsequently increased or diminished.
Although it is evident petitioners do not meet the statutory criteria to
reopen their cases, we nonetheless address the substantive issue petitioners
present as it is an issue of first impression in this state.
When reviewing a workers' compensation decision, we are required to
determine whether the "findings reasonably could have been reached on the
basis of sufficient credible evidence in the record, with due regard to the
agency's expertise." Wood v. Jackson Twp., 383 N.J. Super. 250, 253 (App.
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Div. 2006). We afford deference to an agency's expertise and knowledge in its
field but will not defer if the agency's statutory interpretation is inaccurate or
contrary to the legislature's intent. Caminiti v. Bd. of Trs., 431 N.J. Super. 1,
14 (App. Div. 2013). The party challenging the decision bears the burden to
prove the decision was not based on sufficient credible evidence. In re Protest
of Coastal Permit Program Rules, 354 N.J. Super. 293, 330 (App. Div. 2002).
When interpreting a statute, the primary purpose is to discern the
Legislature's intent. Kocanowski v. Twp. of Bridgewater, 237 N.J. 3, 9 (2019).
The best method to determine the intent is to consider the statute's plain
language, ascribing to the words their ordinary meaning when viewed as a
whole. DiProspero v. Penn, 183 N.J. 477, 492 (2005). The function of the
court is not to re-write the statute, presume the intent of the legislature, or add
qualifications, but rather "to construe and apply the statute as enacted." Ibid.(quoting In re Closing of Jamesburg High Sch., 83 N.J. 540, 548 (1980)). If
the statute is susceptible to more than one plausible interpretation, leads to an
absurd result, or is at odds with the plain language, courts may turn to extrinsic
aids such as "legislative history, committee reports, and contemporaneous
construction." Id. at 492-93 (quoting Cherry Hill Manor Assocs. v. Faugno,
182 N.J. 64, 75 (2004)).
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Under 42 U.S.C. § 424a, a petitioner is limited to the amount they can
simultaneously collect from SSD and state workers' compensation benefits. If
the combined total monthly amount of SSD and state workers' compensation
benefits exceeds eighty percent of the petitioner's pre-disability ACE earnings,
SSD is reduced. The reduction of SSD is known as the social security offset.
Social Security receives the benefit of the offset. Woods, 383 N.J. Super. at
254.
However, a handful of states, including New Jersey, enacted laws
authorizing the reduction of the workers' compensation award instead of SSD
when determining the simultaneous collectability of benefits. These states are
known as reverse offset states. Therefore, in New Jersey, the employer,
workers' compensation insurer, and Fund receive the benefit of the offset, not
Social Security.
The Omnibus Budget Reconciliation Act of 1981 prevented additional
states from enacting reverse offset legislation. 42 U.S.C. § 424a (1981).
However, it permitted states which had enacted reverse offset provisions on or
before February 18, 1981 to keep the reverse offset in effect. Ibid. New
Jersey was one such state.
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As stated, in 1980, the New Jersey Legislature amended the workers'
compensation statute and adopted the reverse offset provision. N.J.S.A. 34:15 -
95.5 states:
For persons under age [sixty-two] receiving benefits
as provided under R.S. 34:15-95.5, or R.S. 34:15-
12(b), and whose period of disability began after
December 31, 1979, such compensation benefits shall
be reduced by an amount equal to the disability
benefits under the Federal Old-Age, Survivors' and
Disability Insurance Act, as now or hereafter
amended, not to exceed the amount of the reduction
established pursuant to 42 U.S.C. 424a. However,
such reduction shall not apply when the combined
benefits provided under R.S. 34:15-95, or R.S. 34:15-
12(b), and the Federal Old-Age, Survivors' and
Disability Insurance Act is less than total benefits to
which the Federal reduction would apply, pursuant to
42 U.S.C. 424a.
As explained by Crider and Polonsky, under the statute, an individual in New
Jersey receiving permanent total disability or Fund benefits, whose disability
benefits began after December 31, 1979, is subject to the reverse offset until
the person reaches the age of sixty-two.2 The statute does not include a
triennial redetermination of benefits.
42 U.S.C. § 424a(f) provides for a redetermination of the social security
offset every three years. This triennial redetermination is akin to a cost -of-
2
After a petitioner turns sixty-two, Social Security takes the offset until the
petitioner is sixty-seven years old. Thereafter, the offset is no longer in effect
and a petitioner keeps the full amount of the benefits. 42 U.S.C. § 424a(a) .
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living adjustment to raise the eighty percent cap every three years using a ratio
established by the Commission of Social Security based on the national
average wage index.
Petitioners contend our Legislature intended to adopt the federal
triennial redetermination provision. However, the plain language of N.J.S.A.
34:15-95.5 does not include a redetermination of benefits. And the legislative
history is similarly silent. See Sponsor's & Lab. Comm. Statement to A. 1206
1-17 (L.1980, c. 83).
Moreover, the federal statute acknowledges the reverse offset states and
precludes a social security offset for those states. 42 U.S.C. § 424a(d) creates
an exception to the social security offset for reverse offset states. See Ries v.
Harry Kane, Inc., 195 N.J. Super. 185, 197 (App. Div. 1983).
Our Legislature did not include any redetermination of benefits or cost-
of-living provision in N.J.S.A. 34:15-95.5, nor has it amended the controlling
statute in the forty years since its enactment. It is not this court's province to
rewrite a statute contrary to its plain meaning. Perrelli v. Pastorelle, 206 N.J.
193, 200 (2011).
Moreover, Crider and Polonsky agreed the offset is in place to limit a
petitioner's benefits so a totally disabled petitioner cannot earn more than his
or her pre-injury income. This counters the argument that the Legislature
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intended to include a cost-of-living increase. In addition, as we have
previously noted, the Fund's resources are limited. We would not impose
additional financial obligations absent a legislative mandate to do so. See
McAllister v. Resorts Int'l Hotel & Casino, 299 N.J. Super. 199, 202-03 (App.
Div. 1997).
There is no conflict between federal and state law. Under the Omnibus
Budget Reconciliation Act of 1981, Congress and the Social Security
Administration confirmed that § 424a did not preempt a state's workers'
compensation act. 42 U.S.C. § 424a. In addition, the Supreme Court has
clarified that if there is any overlap between a federal disability insurance
program and a state workers' compensation program, "workmen's
compensation programs should take precedence in the area of overlap."
Richardson v. Belcher, 404 U.S. 78, 82 (1971).
In sum, it is clear from a review of the plain language of N.J.S.A. 34:15 -
95.5 and 42 U.S.C. § 424a that a triennial redetermination of ACE is not
applicable in New Jersey as a reverse offset state. As petitioners have not
presented this court with any concrete legal or legislative grounds upon which
to overturn the compensation judge's order, we affirm the order denying a
redetermination of benefits and for reimbursement of overpayment of benefits.
Affirmed.
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