Estate of Myroslava Kotsovska, by Olena Kotsovska

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5512-11T4
ESTATE OF MYROSLAVA KOTSOVSKA,
by OLENA KOTSOVSKA, Administrator,
Plaintiff-Respondent, APPROVED FOR PUBLICATION
December 26, 2013
v.
APPELLATE DIVISION
SAUL LIEBMAN,
Defendant-Appellant.
_________________________________________
Argued March 20, 2013 - Decided December 26, 2013
Before Judges Grall, Simonelli and Accurso.
On appeal from Superior Court of New Jersey,
Law Division, Union County, Docket
No. L-4258-09.
Robert F. Cox argued the cause for appellant
(McCreedy and Cox, attorneys; Mr. Cox, on
the briefs).
George E. Spaneas of the New Hampshire bar,
admitted pro hac vice, argued the cause for
respondent (Smith, Stratton, Wise, Heher &
Brennan, LLP, and Mr. Spaneas, attorneys;
Gerald D. Wixted, and Mr. Spaneas, of
counsel and on the briefs).
The opinion of the court was delivered by
ACCURSO, J.A.D.
Defendant Saul Liebman appeals from a $565,806.37 final
judgment in this wrongful death action, following a jury verdict
in favor of plaintiff Estate of Myroslava Kotsovska (the
estate), and from the denial of his motion for a new trial.
Liebman contends that decedent was his employee, and thus the
Workers' Compensation Act's (the Act) exclusivity bar, N.J.S.A.
34:15-8, prohibits her estate from maintaining this action. The
central issue on appeal is whether the question of the
decedent's status as an employee or independent contractor,
which the jury determined adversely to Liebman, should have been
decided in the Division of Workers' Compensation (the Division).
We conclude that the Division was the proper forum for
resolution of that issue pursuant to Kristiansen v. Morgan, 153
N.J. 298 (1998), modified on other grounds, 158 N.J. 681 (1999).
Because the Superior Court has concurrent jurisdiction to decide
whether the decedent was an employee or independent contractor,
however, that error would not alone require the course of this
matter to be rerun. But as we also conclude that the jury
instructions on the issue were seriously flawed, reversal and
remand is required. Because we reject Liebman's remaining
points of error, however, we affirm the jury's damages verdict
and preserve it pending remand to the Division to determine
decedent's employment status.
2 A-5512-11T4
The basic facts of this tragic case are easily summarized.
In September 2008, Liebman, then eighty-one years old, was
living alone following the recent death of his wife. His
daughter, Robin Ross, was making inquiries among her friends for
someone who could move into her father's home, cook his meals
and assist him in his daily activities. Decedent, a 59-year-old
Ukrainian citizen on an extended visit with her daughter in New
Hampshire, was referred to Ross for the role.1
Ross initially communicated with decedent, who spoke almost
no English, through decedent's daughter. Decedent agreed to
come to New Jersey to meet Ross and her father and, if the
arrangements were suitable, to begin work immediately.
Decedent met with Ross and Liebman in Liebman's home,
accompanied by her son-in-law who served as a translator. The
parties agreed that decedent would move into Liebman's home and
work seven days a week for one hundred dollars a day, which she
would receive in cash. Decedent was responsible for preparing
three meals a day, doing the laundry, performing light
housekeeping, accompanying Liebman on errands, and assisting him
with whatever tasks he required. Liebman walked with a cane and
occasionally needed assistance on stairs or getting in or out of
1
Decedent had apparently provided similar services to a New
Jersey family on an earlier visit.
3 A-5512-11T4
the car. Decedent was to also accompany Liebman if he chose to
go out to eat, at his request.
The parties did not discuss whether decedent's visa
authorized her to work in this country, which it did not, or
whether decedent was to be Liebman's employee or considered an
independent contractor. There was also no discussion as to the
duration of the arrangement, although the parties did discuss
the decedent returning to her daughter's home for the Christmas
holiday. Decedent's son-in-law advised Ross that decedent was
without health insurance, and that he and his wife would pay her
medical bills if she got sick.
The parties met on October 21, 2008, and decedent began her
duties immediately thereafter. On December 8, 2008, Liebman and
decedent were running errands and stopped at the Millburn Diner
for lunch. Decedent got out of the car and stood on the
sidewalk while Liebman pulled into the parking space in front of
her. As decedent stood on the sidewalk in front of a low patio
wall, Liebman suddenly accelerated, driving the car over the
parking block and onto the sidewalk. Liebman crashed the car
into decedent, pinning her against the low wall. The accident
severed decedent's left leg below the knee, resulting in her
death nearly an hour later.
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The estate filed a wrongful death action against Liebman in
Superior Court. Liebman answered and asserted an affirmative
defense of lack of subject matter jurisdiction, contending that
exclusive jurisdiction was in the Division. Liebman
subsequently filed a motion to dismiss on the same grounds. The
court denied the motion and advised the parties that it would
entertain a motion for summary judgment after the completion of
discovery. If after hearing that motion the court concluded
that decedent was an employee, the matter would be transferred
to the Division.
Following discovery, Liebman filed a motion before another
judge to transfer the case to the Division. That judge denied
the motion because there was no claim pending in the Division
and the limitations period for filing a workers' compensation
petition had expired. Liebman's motion for reconsideration was
denied. Liebman moved again for reconsideration, this time
attaching a certification from his homeowner's insurance carrier
acknowledging the existence of workers' compensation coverage
and notice of the claim. The carrier conceded that the accident
arose out of the course of decedent's employment and agreed not
to raise a limitations defense to transfer of the claim. The
court again denied the motion. We denied Liebman's motion for
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leave to appeal. Liebman's subsequent motion for summary
judgment was also denied.
The case was tried over several days. The jury determined
that decedent was an independent contractor and awarded the
estate $300,000 for decedent's pain and suffering and $225,000
for her wrongful death. Liebman's motion for new trial was
denied. This appeal followed.
We conclude that this matter should have been transferred
to the Division for determination of decedent's employment
status. The Court in Kristiansen held that, although the
Superior Court and the Division have concurrent jurisdiction to
decide an exclusivity defense, primary jurisdiction is in the
Division where, as here, "no issue has been raised that the
Division cannot decide in a manner that is binding on all the
interested parties." Kristiansen, supra, 153 N.J. at 311.
The trial court rejected that Kristiansen controlled
because both it and Wunschel v. City of Jersey City, 96 N.J. 651(1984), on which Kristiansen relied, involved situations, unlike
this one, in which there was no dispute that the deceased worker
was an employee covered by the Act. It noted the Kristiansen
Court emphasized that the Legislature did not intend workers who
had accepted the provisions of the Act, pursuant to N.J.S.A.
34:15-7, to have an election as to whether to pursue common-law
6 A-5512-11T4
tort remedies. Kristiansen, supra, 153 N.J. at 311-12.
Reasoning that decedent could not be deemed to have accepted the
provisions of the Act if she were not defendant's employee, as
her estate maintained, the trial court determined that the
Division's jurisdiction could not be considered exclusive while
a dispute existed over decedent's employment status. The court
thus concluded that the Superior Court "must have jurisdiction
to determine whether plaintiff is an employee," at least when
the plaintiff has not also filed a workers' compensation
petition.
We think that Wunschel and Kristiansen compel a different
result. In Wunschel a city police officer, Wunschel, was
accidently shot and killed by his on-duty partner, who was
picking Wunschel up at his second job to start their tour.
Wunschel, supra, 96 N.J. at 655-56. Wunschel's widow filed a
petition for workers' compensation benefits against both of
Wunschel's employers, and a wrongful death suit against them as
well as against Wunschel's partner. Id. at 656. The central
issue in both actions was whether Wunschel was working for the
City or his second employer when he was shot. Id. at 657. When
the case reached the Supreme Court, the Wunschel Court was
confronted with a situation in which the Division and the
Superior Court had reached the opposite result on that same
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factual issue. Id. at 658. In order to avoid such "illogical
inconsistenc[ies]" in the future, the Court determined to
"design a procedure to 'assure that a controversy, or its most
critical facets, will be resolved by the forum or body which, on
a comparative scale, is in the best position by virtue of its
statutory status, administrative competence and regulatory
expertise to adjudicate the matter.'" Kristiansen, supra, 153
N.J. at 309 (quoting Wunschel, supra, 96 N.J. at 664).
The Court decided that the best forum for "employment
issues" is the Division. Wunschel, supra, 96 N.J. at 664. The
Wunschel Court acknowledged, however, that the Division's
limited jurisdiction would on occasion make it impossible for
the Compensation Court to exercise jurisdiction over a party
whose participation was necessary to resolve all aspects of the
controversy, such as when the fellow-servant defense is
implicated and the fellow servant declines to intervene in the
Division proceeding. Id. at 664, 665-67. In such cases, the
Court recognized concurrent jurisdiction in the Superior Court
to decide the employment issues related to the fellow-servant
defense. Id. at 666.
The Court revisited the question of the concurrent
jurisdiction of the Division and the Superior Court in these
matters in Kristiansen. Kristiansen was employed by the State
8 A-5512-11T4
as a bridge operator. Kristiansen, supra, 153 N.J. at 302. He
was struck and killed by a motorist as he was leaving the bridge
at the end of his shift. Id. at 304. His widow filed both a
claim petition in the Division and a wrongful death action
against the State and the driver. Ibid. The trial court
rejected the State's exclusivity defense, concluding that it had
concurrent jurisdiction to decide whether Kristiansen was still
within the scope of his employment when he was run over on the
bridge. Id. at 302.
Describing the issue as "different from, yet related to,
the employment issue raised in Wunschel," the Kristiansen Court
held that although the Superior Court had concurrent
jurisdiction to decide whether Kristiansen was within the scope
of his employment at the time of his death, primary jurisdiction
over that question was in the Division. Id. at 313-14(explaining that primary jurisdiction analysis requires
determining which of possible tribunals has predominant interest
in, and expertise to decide, disputed issue). The Court
determined that the Division's jurisdiction was primary because,
unlike in Wunschel, the Division could decide all aspects of the
controversy in a manner binding on all the interested parties,
and "[r]egardless of whether the employer admits or denies the
compensability of an accident, the Division is the forum best
9 A-5512-11T4
suited to decide whether the accident falls within the coverage
formula of the Act." Id. at 313.
Thus, although it is certainly true, as the trial court
noted, that both Wunschel and Kristiansen addressed the
compensability of the accidents that befell those workers and
not their status as employees,2 we think that distinction less
important than the Court's broader point that the Division is
"the forum best suited to decide employment issues," between the
Superior Court and the Division in a primary jurisdiction
analysis. Id. at 309, 313-14. Larson likewise questions the
soundness of hinging the primary jurisdiction of a compensation
board on the distinction between employment status and
compensability of the accident, 6 Lex K. Larson, Larson's
Workers' Compensation Law § 102.06 (Mathew Bender rev. ed. 2013)
(criticizing distinction on basis that employment status is more
"fundamental" than compensability as "very questionable"),
arguing that the Board is equally without jurisdiction to award
compensation in the absence of employment relation as injury in
the course of employment. Id. at § 130.07.
2
The precise question in Wunschel was whether the deceased
police officer was working as an employee of Jersey City's
police department or moonlighting for a private employer, or
both, at the time of his death. Wunschel, supra, 96 N.J. at
660. Accordingly, the question in that case is closely
analogous to the employment status issue presented in this
matter.
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While the presence of other parties could, depending on the
circumstances, counsel against transfer to the Division,
Wunschel, supra, 96 N.J. at 666, here, because there was no such
impediment, Kristiansen compelled the transfer, 153 N.J. at 313.
Accordingly, we hold that because Liebman's exclusivity defense
turned on whether decedent was his employee or an independent
contractor, an issue over which the Division could enter a
binding judgment, and one which the Division was best suited "by
virtue of its statutory status, administrative competence and
regulatory expertise to adjudicate," id. at 309 (quoting
Wunschel, supra, 96 N.J. at 664), the trial court should have
transferred the case to the Division.
Because the Law Division had concurrent jurisdiction to
decide whether the decedent was an employee or independent
contractor, the failure to recognize the Division's primary
jurisdiction would not, standing alone, require the case to be
reversed. Kristiansen, supra, 153 N.J. at 318. We agree with
Liebman, however, that the instructions to the jury were
seriously flawed and clearly capable of producing an unjust
result, thus requiring reversal. R. 2:10-2.
The court charged the jury generally regarding the
distinctions between an employee and a general contractor with
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reference to a lengthy list of factors. Specifically, and by
way of example, the judge instructed that
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.
Determining whether an individual is an employee or an
independent contractor is often difficult and a recitation of
factors organized into "pro-employee and pro-independent
contractor lists is not particularly helpful" in accomplishing
the task. Marcus v. E. Agric. Ass'n, 58 N.J. Super. 584, 600
(App. Div. 1959) (Conford, J.A.D. dissenting), rev'g on dissent,
32 N.J. 460 (1960). Moreover, because the Act is socially
remedial legislation, "[t]he term 'employee' is to be defined
liberally in order to bring as many cases as possible within the
scope of the Workers' Compensation Act," even when the employee
is attempting to have himself excluded from its coverage. Sloan
v. Luyando, 305 N.J. Super. 140, 147 (App. Div. 1997).
The trial court's instructions focused only on defining
whether decedent was an employee based on the control test,
which is grounded in traditional master-servant principles. New
Jersey Prop.-Liab. Ins. Guar. Ass'n v. State, 195 N.J. Super. 4,
14 (App. Div.), certif. denied, 99 N.J. 188 (1984) (explaining
12 A-5512-11T4
the control test's four factors as the degree of control the
employer has the right to exercise, the method of payment, who
furnishes the equipment, and the right of termination). In
compensation cases, however, the Supreme Court has adopted an
additional "economic and functional" test, of which the
determinative criteria are "'not the inconclusive details of the
arrangement between the parties, but rather 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.'" Id. at 10 (quoting Marcus, supra, 58 N.J.
Super. at 603 (Conford, J.A.D., dissenting)). The trial court
did not instruct the jury on this relative nature of the work
test, although highly relevant here as decedent would appear to
have been entirely economically dependent on Liebman.
In addition, the trial court's instruction that the lack of
payroll deductions and payment in cash are factors weighing
against a finding of employment was incomplete and misleading.
Although they are obvious factors suggesting independent
contractor status, we acknowledged their reduced importance in
this context more than fifty years ago. Brower v. Rossmy, 63
N.J. Super. 395, 405-06 (App. Div. 1960) (noting that factor of
lack of payroll deductions for withholding taxes was de-
emphasized in Congleton v. Pura-Tex Stone Corp., 53 N.J. Super.
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282, 290 (App. Div. 1958), certif. denied, 34 N.J. 65 (1961)).
We have cautioned that these factors, included in the control
test, must be viewed critically in light of Larson's
acknowledgment of the desire on the part of some "employers to
avoid both the financial cost and the bookkeeping and reporting
inconvenience that goes with workmen's compensation,
unemployment compensation, social security and the like."
Hannigan v. Goldfarb, 53 N.J. Super. 190, 205-06 (App. Div.
1958) (quoting Larson, supra, §§ 43.51, 45.10) (finding taxi
driver to be "employee" for purposes of the Act despite official
title of independent contractor).
Their inclusion by the trial judge without further
explanation, part of a larger failure to tailor the specifics of
the court's charge to the facts of the case, combined with the
absence of an instruction on the relative nature of the work
test, resulted in a charge that did not adequately convey the
law and was clearly capable of producing an unjust result. Sons
of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 418 (1997).3
3
Although Liebman lodged several objections to the court's
charge, the failure to include the relative nature of the work
test and the instruction on the effect of the cash payments and
lack of withholding were not among them. Nevertheless, we are
satisfied that they are appropriately noticed under the plain
error doctrine. Ewing v. Burke, 316 N.J. Super. 287, 293 (App.
Div. 1998) (explaining that under the plain error rule, even
when counsel fails to object to jury instructions, "a charge
(continued)
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Turning to the issue of damages, Liebman contends that the
court's improper judicial notice of decedent's conscious pain
and suffering resulted in an unjustified award on her survival
claim. He also contends that because the Division should have
decided whether decedent was an employee or independent
contractor, the jury's entire damages verdict must likewise be
set aside. We disagree.
The purpose of taking judicial notice is to save time and
promote judicial economy by dispensing with the necessity of
proving facts that cannot be seriously disputed and are
generally or universally known. State v. Silva, 394 N.J. Super.
270, 275 (App. Div. 2007). There is no dispute that decedent
did not die instantaneously. As counsel and the court were
discussing the court's introductory remarks to the jurors in
anticipation of voir dire, Liebman stipulated to negligence and
sought to preclude details of the accident being presented to
the jurors. Plaintiff objected as such details were relevant to
the estate's survival claim. That led to the following exchange
between defense counsel and the court.
[DEFENSE COUNSEL]: [The decedent] was
conscious before but as soon as the accident
occurred, we have no idea. That is an area
(continued)
which misleads the jury will require a reversal and a new
trial").
15 A-5512-11T4
for expertise unless the court can take
judicial notice of that. I don't believe
the court can.
THE COURT: I'll take judicial notice that
anybody who is conscious and gets their leg
traumatically amputated, suffered pain.
"[F]acts that can be reasonably questioned or disputed may
not be judicially noticed." Ibid. Accordingly, the trial judge
should not have taken judicial notice of decedent's conscious
pain and suffering as a result of the accident, which he did.
That error, however, was harmless as plaintiff developed ample
evidence from both Liebman, as well as a man who stopped to
help, that decedent appeared conscious for several minutes
following the accident, her eyes were open, she was breathing
laboriously, murmuring or groaning, and appeared to be trying to
respond to those speaking to her. Smith v. Whitaker, 160 N.J.
221, 236 (1999) (noting New Jersey allows recovery for pain and
suffering when it can be shown that decedent survived her
injuries, "however briefly"). Accordingly, we reject Liebman's
challenge to the jury's award for pain and suffering on that
ground.
At oral argument, we asked the parties to brief their
positions on whether the jury's verdict on damages could stand
were we to remand the question of decedent's employment status
to the Division and it were to conclude that decedent was an
16 A-5512-11T4
independent contractor. Liebman contends that the jury's
damages verdict must be set aside in that event because the
verdict "was tainted by evidence and testimony of witnesses
which the jury should never have been exposed to." In essence,
Liebman posits that the jury may have punished him for appearing
to have failed to provide decedent with the benefits of
employment during her life then seeking the shelter of the Act
once she was dead.
The proofs would certainly be somewhat different in a trial
limited to damages, but that alone is insufficient to set aside
the jury's damages verdict. Truchan v. Sayreville Bar & Rest.,
Inc., 323 N.J. Super. 40, 53 (App. Div. 1999) (preserving a
damages award pending a new trial on liability despite
reversible error because "the liability issues and the damages
issues were fairly separable"); Showalter v. Barilari, Inc., 312
N.J. Super. 494, 515-16 (App. Div. 1998) (remanding for a new
trial as to liability only as "none of the errors identified
impacted on the damage verdict"). Except with regard to the
claim as to judicial notice, which we have rejected, Liebman
does not claim that the damages verdict is excessive, and we do
not find it so. Jastram v. Kruse, 197 N.J. 216, 228 (2008)
(explaining that damages awards should be set aside only upon a
17 A-5512-11T4
finding of manifest miscarriage of justice). Accordingly, we
preserve it pending remand to the Division.
We have considered Liebman's remaining arguments and
determined that they are not of sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
To summarize, we reverse the judgment on liability only and
remand the matter to the Division to determine whether the
decedent was defendant's employee or performed services for him
as an independent contractor. The Division shall thereafter
transfer the matter to the Law Division, which shall, in
accordance with the Division's determination of decedent's
employment status, either reinstate the judgment in favor of the
estate or dismiss the matter with prejudice in accordance with
this opinion.
Affirmed in part, reversed in part, and remanded for
further proceedings. We do not retain jurisdiction.
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