NOE TENTLE v. COLON CONSTRUCTION, INC., et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3568-02T23568-02T2

NOE TENTLE,

Petitioner,

v.

COLON CONSTRUCTION, INC.,

JOSE COLON, AND ARTEMIO COLON,

Respondents-Appellants,

and

UNINSURED EMPLOYER'S FUND,

Respondent-Respondent.

 

Submitted October 18, 2005 - Decided February 17, 2006

Before Judges Hoens, R.B. Coleman and Seltzer.

On appeal from the New Jersey Department of Labor Division of Workers' Compensation, Passaic County District.

Laurie W. Fielder, attorney for appellants.

Peter C. Harvey, Attorney General, attorney for respondent Uninsured Employer's Fund (Patrick DeAlmeida, Assistant Attorney General, of counsel, John C. Turi, Deputy Attorney General, on the brief).

PER CURIAM

Colon Construction, Inc., Artemio Colon and Jose Colon appeal from the February 14, 2003 judgment of the Workers' Compensation Court in favor of Petitioner Noe Tentle. We affirm.

The essential facts that gave rise to the petition for workers' compensation benefits are not in dispute. In short, Tentle, an illegal alien, was hired to work for Marcelo Ramirez on December 10, 2000. At the time, Ramirez was a subcontractor performing roofing work for Colon Construction, which was the general contractor on the job. Neither Colon Construction nor Ramirez carried workers' compensation insurance. While working at the Colon Construction job for Ramirez, Tentle fell from the roof. He fractured his spine and severed his spinal cord, as a result of which he is a paraplegic.

Tentle filed his petition on February 7, 2001, naming Colon Construction as the sole respondent. Jose Colon filed an answer on behalf of the corporation. On February 1, 2002, Tentle filed a motion seeking to join the Uninsured Employer's Fund (the Fund) as a respondent because he had learned that Colon Construction did not carry workers' compensation insurance. See N.J.A.C. 12:235-7.2(c). In addition, he sought leave to name Jose Colon, Artemio Colon and Marcos Boria, who were identified as the officers and directors of Colon Construction, as respondents. At the same time, Tentle sought leave to add his employer, Ramirez, individually. Tentle's second amended petition naming these respondents was filed on May 15, 2002. His motion to add the Fund as a party was granted on September 20, 2002.

According to the affidavit of the process server, the notice of motion and the second amended claim petition were served on Artemio Colon on April 4, 2002, by leaving a copy of the documents with Marylou Colon, his niece, at an address which official corporate registration records identify as both his home address and the corporate office address. The affidavit of a second process server attests that the same pleadings were served at the same address on Artemio Colon by delivering them to Jose Colon on May 4, 2002.

On September 20, 2002, the workers' compensation judge convened a hearing. She read the stipulated facts of Tentle's employment by Ramirez and the nature of his injury into the record. She found that neither Ramirez nor Colon Construction carried workers' compensation insurance and that Jose Colon, Artemio Colon and Marcos Boria were officers and directors of Colon Construction as of the date of the accident, rendering them personally liable for any award in compensation because of the failure to carry insurance. See N.J.S.A. 34:15-79. The judge specifically noted that these individuals objected to the finding that they were officers and directors of Colon Construction and she granted them leave to submit proofs to the contrary.

Because of the stipulated facts of the injury, the judge concluded that Tentle had sustained a compensable accident. She therefore determined that he was entitled to a temporary disability award for the eight and four-sevenths weeks that he had been in the hospital at a minimum rate of $151 per week for a total of $1,294.29. In addition, because of his injury, Tentle was 100% permanently and totally disabled and entitled to receive the same weekly sum for "450 weeks and continuing." Finally, the judge found that the respondents were liable for outstanding past and future medical bills related to the injury and she awarded counsel fees of $25,000 and a $75 stenographic fee. It is undisputed that Colon Construction paid Tentle the temporary disability benefits that the judge ordered be paid the same day.

During the hearing on September 20, 2002, Colon Construction and the three officers and directors of that corporation were all represented by a single attorney, Mr. Lautman. On or about September 25, 2002, Lautman filed a motion seeking to amend the judgment to remove both Artemio Colon and Marcos Boria, contending that neither was an officer or director of the corporation on the date of the accident. Shortly thereafter, a different attorney substituted into the matter as counsel for the corporation and for Jose Colon. The motion was scheduled to be heard on February 14, 2003.

At approximately 8:00 a.m. on the morning when the motion to amend the judgment was scheduled to be heard, the corporation filed a bankruptcy petition. Later the same day, the worker's compensation judge heard argument on the motion. During that argument, counsel for the corporation advised the judge about the bankruptcy petition and asserted that the judge was prohibited from entering judgment in accordance with her September 20, 2002 decision and award by virtue of the automatic stay provision of the Bankruptcy Code. See 11 U.S.C. 362(a). The attorney for the corporation also objected to the inclusion of Artemio Colon in the judgment notwithstanding the fact that she did not represent him.

The judge rejected the assertion that the automatic stay barred entry of the formal judgment, reasoning that the judgment only memorialized her earlier award. The judge also considered the evidence that had been produced and found that Artemio Colon was a principal of the corporation. She noted again that Tentle was an employee of Ramirez on the date of the accident and that he had sustained an injury for which he was entitled to an award in compensation. She then issued her final award. The Bankruptcy petition filed by Colon Construction was dismissed approximately one month later.

The judge thereafter amended her award and supplemented her decision. In relevant part, she amended the award to reflect an additional medical bill, to reflect that the Fund had reserved its lien rights and its right to compromise medical expenses, and to allocate attorneys' fees as between the temporary and the final award. She issued a supplemental written decision setting forth the reasons for her award and for her finding that Jose Colon, Artemio Colon and Marcos Boria were all officers and directors of Colon Construction.

While this appeal was pending, Colon Construction reached an agreement with Tentle concerning the amount of permanent disability that the corporation will pay to him. The Fund, however, paid Tentle's medical bills and the related award of attorneys' fees and it asserts that it is entitled to be reimbursed for those sums by Colon Construction. Because of the settlement and the payments, Tentle is no longer a party to these proceedings.

On appeal, Colon Construction, Jose Colon and Artemio Colon assert that the award entered against Artemio Colon is void for lack of sufficient service of process. They further argue that there can be no award against Artemio Colon because he was not a principal of the corporation subject to personal liability or, at a minimum, that he was not an active principal as against whom an award would be appropriate. They also assert that all of them were deprived of their rights because they were not afforded a hearing to determine who the principals of the corporation were. They contend that they are entitled to a new trial on the merits because they were represented by an attorney who had a conflict of interest. They argue that the record lacks sufficient evidence to support the award and that there was no evidence to support the finding that Tentle was an employee of any party on the date of his accident. They assert that Tentle "had no legal right to pick and choose which parties to proceed against." Finally, they argue that the workers' compensation judge lacked the power to enter an award against the corporation because of the operation of the automatic stay in bankruptcy.

We have considered these arguments in light of the record and the applicable legal principles and we have concluded that they are without sufficient merit to warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(E). We therefore affirm and add only the following observations.

We begin by noting that the scope of our review is limited. That is, where sufficient credible evidence present in the record supports the findings of the judge of compensation, we are bound by those findings. Close v. Kordulak Bros., 44 N.J. 589, 599 (1965). In reviewing these findings, we consider the proofs as a whole and recognize the opportunity of the judge to hear the witnesses and judge their credibility. However, where the focus of the dispute is not on credibility but, rather, alleged error in the trial judge's evaluation of the underlying facts and the implications to be drawn therefrom, our role is different. Where our review of the record "leaves us with the definite conviction that the judge went so wide of the mark that a mistake must have been made," we may "appraise the record as if we were deciding the matter at inception and make our own findings and conclusions." See Manzo v. Amalgamated Indus., 241 N.J. Super. 604, 609 (App. Div.), certif. denied, 122 N.J. 372 (1990)(quoting Snyder Realty v. BMW of N. Am., 233 N.J. Super. 65, 69 (App. Div. 1989)).

Similarly, as our Supreme Court has held, where an error of law is asserted, we defer to the expertise of the agency charged with interpretation of statutes and regulations within its area of expertise, although we are not bound by those decisions if we find them to be unreasonable or inconsistent with statutory policy. See, e.g., In re M.F., 169 N.J. 45, 56 (2001); Brock v. Pub. Serv. Elec. & Gas Co., 149 N.J. 378, 383 (1997). Applying these principles to the record on appeal, we find no ground on which to interfere with the findings or the conclusions of the judge of compensation.

First, although we owe no deference to the trial judge's analysis of legal questions, see Manalapan Realty Corp. v. Township Committee, 140 N.J. 366, 378 (1995), there is no merit in the arguments concerning service on Artemio Colon. His liability arose by operation of law because he was a principal in a corporation which had failed to maintain workers' compensation insurance. Service on him by means appropriate to his status as a corporate officer was therefore sufficient. The return of service demonstrates that service on Artemio Colon was accomplished by using the address that was reflected in the corporate documents as the business address for the corporation. Under the circumstances, there was no defect in service. See R. 4:4-4. Even if Artemio Colon was not properly served, the appearance in the action of an attorney who acted on his behalf operated as a waiver. See R. 4:4-6; Hill v. Warner, Berman & Spitz, 197 N.J. Super. 152, 167 (App. Div. 1984).

Second, we reject as meritless the assertion raised by Artemio Colon that he could not be liable for any part of the award because he was not an active principal in the corporation. Although we have previously held that the statute imputing personal liability to corporate officers could not impose liability on an unsalaried corporate secretary who was not involved in the conduct of the business, see Macysyn v. Hensler, 329 N.J. Super. 476, 486 (App. Div. 2000), Artemio Colon offered no factual evidence to support a like finding here, in spite of having been afforded the opportunity to do so. Although he presented some limited evidence about limits on his involvement with the corporation during the hearing on the motion to amend the judgment, the judge found it unconvincing and inadequate. We defer to her factual findings under the circumstances.

Similarly, we reject as meritless the assertion that the judge deprived these litigants of their rights or failed to afford them a hearing to determine who the principals of the corporation were. On September 20, 2002, when the judge first addressed the question of personal liability of the officers, counsel for these parties offered no evidence. Notwithstanding that, the judge afforded them an opportunity to produce such evidence as they might wish to offer in connection with her finding and they simply failed to do so. Indeed, the limited documents that they produced, largely in the form of revised corporate documents that had been filed after her finding, were so inadequate that no plenary hearing was needed.

Third, we reject the contention on appeal that Mr. Lautman, the attorney who first appeared for the corporation and its directors, had a conflict of interest that nullified the proceedings that resulted in the award in favor of Tentle. There is no evidence in the record to support any argument that his retainer was limited. Moreover, even if he were operating in a position of conflict, the remedy, potentially, would be a separate action against him rather than an attack on the award as to which there was, and could have been, no defense.

In addition, we find no merit in the argument, advanced for the first time on appeal, that Tentle was not entitled to an award in compensation because he was not an employee of any entity on the date of the accident. More particularly, relying on N.J.S.A. 34:15-36, Colon Construction and the Colons individually assert that Tentle was a casual employee for whom no benefits are available. The definition of casual employment requires a circumstance in which the employment is "not in connection with any business of the employer." Ibid. There is no evidence in the record that Tentle's work for Ramirez and, by extension, for Colon Construction, was not in connection with their business. On the contrary, the parties stipulated that Tentle's injury arose during the course of his employment. Nor is their assertion that they could not be Tentle's employer because they lacked the right to control his work relevant to the basis for the award. Tentle was entitled to a workers' compensation award against the Colon corporation and its principals by operation of law because he was employed by their uninsured subcontractor.

We also reject the assertion that there was insufficient evidence in the record to support the award. In particular, on appeal, Colon Construction and the Colons individually assert that there was no "full-fledged hearing" on the issue of the nature or scope of Tentle's injuries and that he should have been required to submit to an independent medical evaluation or to engage in discovery to determine "whether or not . . . [he] intentionally fell to get benefits." In light of the undisputed fact that Tentle suffered a severed spine, rendering him a paraplegic, his injuries met the test for total permanent disability. See N.J.S.A. 34:15-12c(20)("loss of . . . both feet, or both legs, . . . shall constitute total and permanent disability."). As for the need for discovery, there is nothing in the record that suggests that Tentle's fall from the roof was intentional. Moreover, the failure of respondents to seek an opportunity to explore such a defense during the proceedings is fatal to their argument on appeal. See Nieder v. Royal Indemnity Ins. Co., 62 N.J. 229, 234 (1973).

In addition, we conclude that the judge did not enter the award in violation of the automatic stay. See 11 U.S.C. 362(a). First, although the award was signed several hours after the corporation had filed its bankruptcy petition and although the workers' compensation judge was aware of the bankruptcy petition at the time when she signed the award, her decision had been made and the award announced on the record in the presence of all parties months earlier. The proceedings which led to the entry of the judgment were scheduled only to permit Artemio Colon to be heard on the motion to release him personally from that award. Under those circumstances, we conclude that the affixing of the judge's signature was a ministerial act not in violation of the automatic stay. See Pressler, Current N.J. Court Rules, comment on R. 4:47 (2006); Parker v. Parker, 128 N.J. Super. 230, 232 (App. Div. 1974). This is particularly true in light of the fact that the Bankruptcy Code's exceptions to the operation of the automatic stay, see 11 U.S.C. 362(b)(4), have been interpreted to permit states to administer workers' compensation claims as an exercise of their police and regulatory powers. See In re Mansfield Tire and Rubber Co., 660 F.2d 1108, 1114 (6th Cir. 1981); see also In re Garay, 89 N.J. 104, 119 (1982).

Finally, in their reply brief, respondents assert that the record on appeal demonstrates that the lawyer who originally represented them was deficient in his performance, entitling them to relief based upon ineffective assistance of counsel. See Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064, 80 L. Ed. 2d 674, 693 (1984); State v. Fritz, 105 N.J. 42, 58 (1987). Inclusion in a reply brief of new points is inappropriate and we need not consider this argument. See State v. Smith, 55 N.J. 476, 488, cert. denied, 400 U.S. 949, 91 S. Ct. 232, 22 L. Ed. 2d 256 (1970). Were we to do so, we would reject it in light of the fact that assertions relating to ineffective assistance of counsel relate only to criminal prosecutions, and not to civil disputes.

 
Affirmed.

Although counsel for Artemio Colon argues on appeal that the original attorney lacked authority to represent him, the repeated references on appeal to that attorney as his attorney of record suggest the contrary.

We further note that the parties are all represented by a single attorney for purposes of this appeal. Were these parties seriously suggesting that representation of all of them by one attorney is so inappropriate that the judgment cannot stand, at a minimum Artemio Colon should have retained separate counsel for purposes of the appeal.

Because only the corporation filed a bankruptcy petition, the automatic stay, under any circumstances, would not have prevented entry of judgment against Jose Colon and Artemio Colon individually. See National Westminister Bank v. Lomker, 277 N.J. Super. 491, 494 n.1 (App. Div. 1994), certif. denied, 142 N.J. 454 (1995); Citizens First Nat. Bank v. Marcus, 253 N.J. Super. 1, 3-5 (App. Div. 1991).

(continued)

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A-3568-02T2

February 17, 2006