NOT FOR PUBLICATION WITHOUT THE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
DOCKET NO. A-3838-17T3
MORALES AUTO REPAIR
& JUNIOR MORALES,
Submitted October 15, 2019 – Decided February 14, 2020
Before Judges Rothstadt and Mitterhoff.
On appeal from the New Jersey Department of Labor &
Workforce Development, Division of Workers'
Compensation, Passaic County, Claim Petition No.
Harkavy Goldman Goldman & Gerstein, attorneys for
appellant (Martin S. Goldman, on the brief).
Wegner Wegner & Ward, PC, attorneys for respondent
(Peter F. Ward, on the brief).
Charlotte Cherie Kelley, attorney for respondent
Uninsured Employer's Fund.
In this appeal from a judge of compensation's award to an employee, the
employer, Morales Auto Repair (MAR) and its owner, Junior Morales, challenge
the judge's determination that the employee, Pedro Liranzo, was employed by
Morales or his business when Liranzo sustained injuries, entitling Liranzo to
benefits under the Workers' Compensation Act, N.J.S.A. 34:15-1 to 34:15-146.
We vacate the award and remand for reconsideration because we conclude the
judge's findings, and his failure to articulate any legal basis for his determination
undermines our ability to perform a meaningful appellate review.
The facts derived from the record are summarized as follows. Liranzo
filed a 2012 petition for workers' compensation benefits against Morales after
he injured his right hand falling off a ladder while working on MAR's sign. In
his answer, Morales denied Liranzo's request for compensation and claimed that
Liranzo was not a MAR employee.
The parties' dispute was tried by the judge of compensation over two days
in 2017. At trial, both parties appeared and testified as to the nature of Liranzo's
relationship with MAR.
According to Liranzo's testimony, in November 2011, he was introduced
to Morales by a friend. At that time, Liranzo had just been laid off by his former
employer, Frost King, and was looking for work. The friend introduced Liranzo
to Morales because Liranzo had prior experience working on automobile tires.
Liranzo met with Morales at MAR's Bridge Street location in Paterson.
Liranzo stated Morales hired him and told him his pay would be $350 a week.
According to Liranzo, he and two others were to perform "general mechanic
work" for MAR, including balancing tires, performing tune-ups, and
maintaining transmissions. Liranzo also stated he was given a blue uniform with
the name of the business on the left-side chest pocket.
Addressing his injury, Liranzo testified that on Thursday of his first week
of employment, Morales asked him to install the sign. As he was installing the
sign, using a ladder given to him by Morales, he fell, injuring his right hand,
after something struck the ladder and caused him to fall. Liranzo was then taken
to a hospital where he received an injection for the pain and had surgery the
following day. According to Liranzo, he later underwent physical therapy
through August 10, 2012 and testified that he has lost some functionality in his
After his fall, Morales paid Liranzo $350 in cash for the days he worked.
Liranzo later received unemployment benefits for approximately the next two
years. His benefits, however, were based upon his prior employment with Frost
King, which Liranzo identified as his last employer when applying for those
benefits. According to Liranzo, he listed Frost King because Morales paid him
in cash and for that reason, he did not believe he would be able to collect benefits
based on his employment with MAR. Later, Liranzo found work at a furniture
factory and at a clothing company.
Morales testified to a different version of his hiring of Liranzo. According
to Morales, MAR had two locations: one on Market Street in Paterson and the
other was the Bridge Street location. Morales had just recently leased the Bridge
Street property but did not begin any operations there because the premises were
covered with garbage. He hired Liranzo for the sole purpose of cleaning up that
site in exchange for a one-time payment of $1,000.
According to Morales, Liranzo worked at the Bridge Street location alone.
He stated that Liranzo was never given a uniform. Morales also testified that
Liranzo brought his own tools to clean the premises. Morales knew Liranzo did
not have a car but did not know how Liranzo brought his tools to the premises.
Although Morales was seldom on site, he would open the location for Liranzo
in the morning and return in the evening to close the premises.
Addressing Liranzo's injury, Morales stated he never asked Liranzo to
install a sign and only instructed him on cleaning up the property. He learned
about Liranzo's fall from another individual, who called him and informed him
that Liranzo fell from the ladder and was injured, at which point Morales drove
to the Bridge Street location to see Liranzo. After observing Liranzo's injur y,
Morales told the individual who had called him to drive Liranzo to the hospital.
When Morales asked Liranzo what he was doing on the ladder, Liranzo
told him he was placing a plastic protector onto the bottom of the sign.
According to Morales, Liranzo performed this action on his own, without
After Liranzo could no longer clean the premises, Morales hired another
individual to finish the job. Morales, however, would periodically call Liranzo
to see how he was doing and gave Liranzo approximately $500 to pay for pain
medication, spread out over four separate payments.
After considering the parties' testimony the judge of compensation issued
an oral decision on March 22, 2018, which he placed on the record. That same
day, the judge entered an order for judgment awarding Liranzo $120,428.75 for
permanent disability, temporary disability, medical fees, hospital expenses,
attorney fees, and legal reimbursements.
In his oral decision, the judge of compensation explained the basis for his
finding that Liranzo was an employee and that he was injured during the course
and scope of his employment with Morales. Explaining his reasons, the judge
stated the following:
In the present matter, although I find [Liranzo]'s
testimony at times to be somewhat at odds to which
work he was actually doing, [Morales] did admit that
he hired [Liranzo] to work for him. Furthermore, he
saw [Liranzo] on the date and place of accident,
actually paid [Liranzo] in cash for part of the agreed
upon weekly salary and subsequently gave [Liranzo]
cash to pay for medicines. As such, I find that
employment has been established by a preponderance
of the credible evidence that [Liranzo] suffered an
injury to his right hand on November 18, 2011 out of
and in the course of his employment; thereby making
his injury compensable.
This appeal followed.
"Appellate review of [factual findings in] workers' compensation cases is
'limited to whether the findings made could have been reached on sufficient
credible evidence present in the record . . . with due regard also to the agency's
expertise[.]'" Hersh v. Cty. of Morris, 217 N.J. 236, 242 (2014) (second and
third alterations in original) (quoting Sager v. O.A. Peterson Constr., Co., 182
6 N.J. 156, 164 (2004)). We also defer to the judge's opportunity to observe and
hear the witnesses, to evaluate their credibility, and to the judge's expertise in
the field of workers' compensation. Close v. Kordulak Bros., 44 N.J. 589, 599
(1965). However, "the judge of compensation's legal findings are not entitled
to any deference and, thus, are reviewed de novo." Hersh, 217 N.J. at 243.
The Workers' Compensation Act provides an exclusive remedy for
injuries sustained in an "accident arising out of and in the course of
employment." N.J.S.A. 34:15-7. "We have long recognized that [the Workers'
Compensation Act] is remedial legislation and should be given liberal
construction in order that its beneficent purposes may be accomplished."
Kocanowski v. Twp. of Bridgewater, 237 N.J. 3, 10 (2019) (alteration in
original) (quoting Estate of Kotsovska v. Liebman, 221 N.J. 568, 584 (2015)).
"For more than a century, the Workers' Compensation Act has provided
employees injured in the workplace 'medical treatment and limited
compensation "without regard to the negligence of the employer."'" Vitale v.
Schering-Plough Corp., 231 N.J. 234, 250 (2017) (quoting Estate of Kotsovska,
221 N.J. at 584). The employer "assumes an absolute liability[,] [but] gains
immunity from common-law suit, even though he [may] be negligent, and is left
with a limited and determined liability in all cases of work-connected injury."
Ibid. (first alteration in original).
Employees are the express beneficiaries of the Workers' Compensation
Act. Employees are defined by N.J.S.A. 34:15-36, as "all natural persons,
including officers of corporations, who perform service for an employer for
financial consideration." Independent contractors are not included in this
definition and are not entitled to benefits under the Act. Auletta v. Bergen Ctr.
for Child Dev., 338 N.J. Super. 464, 471 (App. Div. 2001).
When assessing a worker's employment status in the context of social
legislation, D'Annunzio v. Prudential Ins. Co. of Am., 192 N.J. 110, 122-24
(2007), "for purposes of determining whether the Compensation Act applies ,"
Estate of Kotsovska, 221 N.J. at 595, a court of compensation is to apply these
twelve factors to determine whether an injured party is an employee under the
(1) the employer's right to control the means and
manner of the worker's performance; (2) the kind of
occupation—supervised or unsupervised; (3) skill; (4)
who furnishes the equipment and workplace; (5) the
length of time in which the individual has worked; (6)
the method of payment; (7) the manner of termination
of the work relationship; (8) whether there is annual
leave; (9) whether the work is an integral part of the
business of the "employer"; (10) whether the worker
accrues retirement benefits; (11) whether the
"employer" pays social security taxes; and (12) the
intention of the parties.
[Id. at 594 (quoting Pukowsky v. Caruso, 312 N.J.
Super. 171, 182-83 (App. Div. 1998)).]
In addition, a court should consider "the worker's economic dependence
on the work relationship," D'Annunzio, 192 N.J. at 122, when determining a
person's employment status. Estate of Kotsovska, 221 N.J. at 595. This
consideration looks to whether the worker's "labor was a cog in the wheel of [the
employer's] operation as a subcontractor of [the employer] in as realistic a sense
as the [work] being done by [the employer's] regular employees." Caicco v.
Toto Bros., Inc., 62 N.J. 305, 310 (1973). Further, "[t]he independence of [the
worker] is not to be determined by looking at the [worker] or job alone, but by
judging how independent, separate and public his [or her] business service is in
relation to a particular employer." Dee v. Excel Wood Prods. Co., 86 N.J. Super.
453, 460 (App. Div. 1965). Thus, this assessment is considered together with
the factor addressing the integration of the employee's business with that of the
employer's. See D'Annunzio, 192 N.J. at 122-23 (holding "the worker's
economic dependence on the work relationship," along with the other two
considerations, is assessed under the twelve-part test).
Applying the above factors to the case under review, we cannot determine
whether the record supports the judge of compensation's conclusions that
Liranzo was an employee of MAR at the time of the accident and, thus, the
injuries he sustained were compensable. In this contested matter in which the
two witnesses told completely different stories about Liranzo's employment
status, the judge of compensation made no credibility findings, other than stating
Morales confirmed some aspects of Liranzo's testimony, such as that he was
hired and paid in cash. The judge also failed to make any effort to apply
whatever facts he found to the applicable law.
Under these circumstances, we conclude the judge did not satisfy his
obligations under Rule 1:7-4. See R. 1:7-4(a) ("The court shall, by an opinion
or memorandum decision, either written or oral, find the facts and state its
conclusions of law thereon . . . ."). "Naked conclusions do not satisfy the
purpose of [Rule 1:7-4(a)]. Rather, the trial court must state clearly its factual
findings and correlate them with the relevant legal conclusions." Curtis v.
Finneran, 83 N.J. 563, 570 (1980); accord Gnall v. Gnall, 222 N.J. 414, 428
(2015). "Meaningful appellate review is inhibited unless the judge sets forth the
reasons for his or her opinion." Giarusso v. Giarusso, 455 N.J. Super. 42, 53-
54 (App. Div. 2018) (quoting Strahan v. Strahan, 402 N.J. Super. 298, 310 (App.
We are therefore constrained to vacate the judge of compensation's award
and remand for reconsideration and the issuance of a new judgment supported
by a written or oral decision with the requisite credibility determinations,
findings of fact, and conclusions of law. In doing so, we do not express any
opinion on the merits of the positions taken by either party or in any way suggest
an outcome for their dispute.
Vacated and remanded for further proceedings consistent with our
opinion. We do not retain jurisdiction.