JOSEPHINE LUCCIOLA v. HOME DEPOT

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

JOSEPHINE LUCCIOLA,

Petitioner-Appellant,

v.

HOME DEPOT,

Respondent-Respondent.

__________________________________

July 22, 2016

Submitted March 16, 2016 Decided

Before Judges Alvarez and Ostrer.

On appeal from the Division of Workers' Compensation, Department of Labor and Workforce Development, Case No. 2001-17050.

Josephine Lucciola, appellant pro se.

Cipriani & Werner, P.C., attorneys for respondent (Joseph D. Csipak and Melissa M. Csercsevits, on the brief).

PER CURIAM

Petitioner Josephine Lucciola appeals from a judge of compensation's January 14, 2015 order denying her request to vacate a February 23, 2012 order, which established her Social Security offset. Petitioner challenges the judge's finding that the 2012 offset rate that is, the amount of her workers' compensation benefit after accounting for her Social Security disability benefit was correctly determined. Having considered the parties' arguments in light of the record and applicable principles of law, we conclude that the offset rate was incorrectly calculated. We therefore reverse.

In 2000, while working at Home Depot, petitioner splashed deck stain into her eyes, causing serious injury to both eyes. In October 2006, she received an award of temporary and permanent disability benefits at the weekly rate of $308.55, which was based on a $440.79 average weekly wage. The award was based on the compensation judge's finding of permanent total disability. We affirmed the award. Lucciola v. Home Depot, No. A-2087-06 (App. Div. Mar. 11, 2008).

Because petitioner was also awarded Social Security disability benefits, the October 2006 order required petitioner to reimburse respondent Home Depot for any workers' compensation benefits she received "in excess of the statutory offset rate during the period of time Petitioner has received Social Security Disability benefits." The order also required petitioner to execute any necessary releases to allow respondent to obtain her Social Security initial entitlement, current earnings, and Medicare payments.

For reasons not clear from the record, the Social Security offset rate was not calculated for several years. In the meantime, respondent withheld a portion of payments pending receipt of Social Security information. In 2012, petitioner, who had previously represented herself, filed a motion through counsel to enforce the October 2006 order.

Following a hearing, on February 23, 2012 the judge entered an order setting petitioner's "offset rate" at $125.43. The order stated that, in accordance with the October 2006 order, respondent shall pay "total permanent disability at the rate of $125.43 per week since 11/11/04 to date." The order also noted that petitioner's average current monthly earnings (ACE) were $855.20, and her "initial entitlement" was $310.1 The order did not explain how the offset rate was calculated. The judge reserved decision on petitioner's request for a penalty for respondent's delay in making payments.

In November 2014, petitioner, again pro se, approved a consent order entered by a new compensation judge, which addressed issues of treatment, transportation, and required production of checks allegedly paid to her prior counsel.

Petitioner subsequently filed a motion to vacate parts of the February 23, 2012 and November 2014 orders. With respect to the former, she contended that no Social Security offset should have applied at all, stating, "the ACE only applies to the Second Injury Fund." She also contended that her prior attorney had agreed to entry of the February 2012 order without her consent. She renewed an argument, which we rejected in our 2008 opinion, that the $308.55 pre-offset rate was too low because it was based on an understatement of her weekly wage. She also claimed the counsel fee referenced in the November 2014 order should have been paid directly to her, not her prior counsel.

Following argument, on January 14, 2015 the judge denied petitioner's request to vacate the February 2012 order. Regarding the Social Security offset, the judge found, without explanation, that the $125.43 offset rate was correctly determined. The judge also rejected petitioner's challenge to the $308.55 amount, stating "the appellate division has already ruled." The accompanying order stated petitioner's "wage, rate, and offset rate are correct." The order also acknowledged that petitioner had withdrawn her claim regarding the counsel fee.

Petitioner filed another motion on January 30, 2015, the basis of which is unclear. On February 4, 2015, the compensation judge denied this motion, stating on the record that petitioner had withdrawn it. He also stated he would close the case, explaining there was "no longer any request by the petitioner with respect to her motion." That day, the judge entered an "Order Dismissing Motion and Closing Case," which stated petitioner had "abandoned" her motion.

Petitioner appeals from the January 14 and February 4, 2015 orders. Regarding the January order, she argues (1) her weekly disability benefit is incorrect; (2) she is entitled to a 25% additional payment pursuant to N.J.S.A. 34:15-28.1; (3) she is entitled to a 20% counsel fee pursuant to N.J.S.A. 34:15-64; and (4) her disability checks should be mailed directly to her, not her prior attorney. Petitioner's brief does not discuss the February 4 order, but in an amended notice of appeal dated April 1, 2015, she argued that her case should remain open until respondent offers proof that her medical condition has changed.

We apply a deferential standard of review to a compensation judge's fact-findings, but review de novo the judge's legal conclusions. Renner v. AT&T, 218 N.J. 435, 448 (2014). Deference "is premised on our confidence that there has been a careful consideration of the facts in issue and appropriate findings addressing the critical issues in dispute." Bailey v. Bd. of Review, 339 N.J. Super. 29, 33 (App. Div. 2001). Meaningful appellate review requires a reasonable factual record and a clear statement of reasons for the judge's decision. In re Issuance of Permit by Dep't of Envt'l Prot., 120 N.J. 164, 173 (1990).

Beginning with the offset rate, we conclude the compensation judge erred in determining that the February 2012 Social Security offset calculation was correct.2 Although petitioner is subject to an offset, the final offset rate substantially understated her entitlement.

The Social Security Act limits the amount a person may collect from the combination of Social Security disability benefits and state workers' compensation benefits. 42 U.S.C.A. 424a(a). If the total monthly benefits (i.e. the sum of the Social Security and workers' compensation benefit) exceed eighty percent of the individual's average current monthly earnings (ACE), then her Social Security benefit is to be reduced to the point where the combined monthly benefit does not exceed eighty percent of her average monthly earnings. Ibid.; see also Wood v. Jackson Tp., 383 N.J. Super. 250, 254 (App. Div. 2006). However, the Act provides an exception for states that have adopted laws that require instead a reduction in workers' compensation benefits to account for the Social Security benefits. 42 U.S.C.A. 424a(d); Wood, supra, 383 N.J. Super. at 254.3

New Jersey is such a state. N.J.S.A. 34:15-95.5 provides that for persons under the age of 62 receiving workers' compensation benefits,

such compensation benefits shall be reduced by an amount equal to the [Social Security disability benefit], 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 [workers' compensation benefit and Social Security disability benefit] is less than the total benefits to which the Federal reduction would apply, pursuant to 42 U.S.C. 424a.

In other words, a person's workers' compensation benefit is reduced by the amount of her Social Security benefit, but in no event will the resulting benefit be less than if the offset were calculated according to the Social Security Act. Ibid.

To calculate petitioner's Social Security offset under the New Jersey statute, we rely on a worksheet promulgated by the Division of Workers' Compensation (Division). See Division of Workers' Compensation, Office of Special Compensation Funds, Social Security Offset, http://lwd.dol.state.nj.us/labor/ wc/forms/forms_index.html$employee_forms (follow to "Social Security Offset Calculation").4

The worksheet compares two calculations. If the weekly equivalent of eighty-percent of the ACE (weekly 80%-ACE) is greater than the initial workers' compensation award, then the effective workers' compensation award is calculated by subtracting the weekly Social Security benefit from the weekly 80%-ACE. However, if the weekly 80%-ACE is less than the initial workers' compensation award, the effective award is calculated by subtracting the weekly Social Security benefit from the initial workers' compensation award.

Turning to petitioner's benefit, neither of the judges who calculated the $125.43 rate provided a statement of reasons supporting that figure. See In re Issuance, supra, 120 N.J. at 173. However, in support of the $125.43 offset, respondent offers the following arithmetic. First, respondent asserts, relying on the February 2012 order, that petitioner's "(80%) ACE" is $855.20.5 Respondent converts that to a weekly 80%-ACE of $196.82 (855.20 multiplied by 12 is 10,262.40; divided by 52.14 weeks equals 196.82). Using the same conversion, respondent derived a weekly Social Security benefit of $71.39 from her initial entitlement of $310.20. Respondent then subtracted the weekly Social Security benefit from the weekly 80%-ACE of $196.82, yielding an offset rate of $125.43.

This is incorrect. As noted above, the weekly Social Security benefit may be subtracted from the weekly 80%-ACE only if the weekly 80%-ACE is greater than the initial workers' compensation award. In this case, the weekly 80%-ACE, which is $157.88 (not $196.82, as respondent asserts), is less than the $308.55 initial workers' compensation award. Therefore, the effective workers' compensation award should be calculated by subtracting the weekly Social Security benefit ($71.58) from the initial award ($308.55). The result is a weekly benefit of $236.97. Because the January 2015 order incorrectly calculated the award as $125.43, we reverse that aspect of the order and remand to the Division to calculate the amount due petitioner because of the underpayment. On remand, the Division shall calculate the amount of the underpayment based on an effective workers' compensation weekly award of $236.97.

In light of this underpayment, we also remand for the Division to consider petitioner's claim under N.J.S.A. 34:15-28.1 for a twenty-five percent penalty for delay in payment of temporary disability benefits. We express no opinion as to the merits of such a claim.

Finally, petitioner contends that her benefit checks should be sent directly to her, not her attorney. We need not address her claim that her counsel, without her consent, approved of the February 2012 order that called for the benefit checks to be sent to her counsel. We see no reason why petitioner should not be able to alter that arrangement. The Division shall comply with her wishes in that regard.

Petitioner's remaining points on appeal, to the extent we can understand them, lack sufficient merit to warrant discussion in a written opinion. R.2:11-3(e)(1)(E).

Reversed and remanded. We do not retain jurisdiction.

1 According to a document from the Social Security Administration, the correct amount is $310.20.

2 We note that respondent argues petitioner is barred from litigating this issue on res judicata and law-of-the-case grounds. However, the compensation judge in 2015 expressly reopened the issue of the offset calculation and determined that $125.43 was correct. We therefore deem petitioner's argument as a challenge to the January 2015 order. Because respondent did not cross-appeal from that aspect of the judge's decision, we review the judge's decision that the calculation was correct.

3 The purpose of the offset is to "'preserve and protect a level of income for the disabled employee while avoiding a duplication of benefits irrespective of the cause of the disability.'" Ibid. (quoting Krysztoforski v. Chater, 55 F.3d 857, 860 (3d Cir. 1995)). This option allows the States, "to shift[] part of their compensation burden to the Social Security system." 14 Larson's Workers' Compensation Law 157.03[5][a] (2016).

4 The worksheet is also available in 39 New Jersey Practice, Workers' Compensation Law 18.3 (Jon L. Gelman) (3d ed. 2016 supp.).

5 However, the order states that $855.20 refers to the ACE, not 80% of the ACE.