BEFORE:                                 HONORABLE COSMO A. GIOVINAZZI, III
                                                Judge of Compensation

APPEARANCES:

                                                DAVID FOX, ESQ.
                                                            116 White Horse Pike
                                                            Haddon Heights, New Jersey 08035
                                                Attorney for the Petitioner,  Kelly Stark

                                                LESLIE M. MARTINELLI, ESQ.
                                                            29 Union Street
                                                            Medford, New Jersey 08055
                                                Attorney for the Petitioner,
                                                Sara Drumheller, parent & guardian
                                                of minor dependents, Connor
                                                & Brady Stark

                                                  JOHN P. MONTEMURRO, ESQ.
                                                            29 Union Street
                                                            Medford, New Jersey 08055
                                                Attorney for the Respondent

This is my reserved decision in the consolidated cases of Stark vs. XFL, LLC d.b.a. NY/NJ Hitmen, C.P. 2001-030300,  C.P. 2002-018670, C.P. 2002-022899, and Sara Drumheller, Guardian, versus XFL, LLC, d.b.a. NY/N J Hitmen, C.P. 2002-035572.

The decedent, Troy A. Stark, was employed as a football player for respondent XFL, LLC doing business as NY/NJ Hitmen (hereinafter XFL).  Decedent suffered a knee injury in the course of his employment, and subsequently underwent surgery.  During surgery, he suffered a bilateral pulmonary emboli and died during the operation on June 1, 2001.  Decedent is survived by his wife, Kelly Stark, and by his two children, Connor Dillon Stark and Brady Warren Stark, whose mother is Sara Drumheller.  Respondent has stipulated that at the time of his death, petitioner was earning $865.38 per week, giving rise to a temporary disability rate of $605.77 per week. 

Subsequent to his death, respondent conceded that Troy Stark died as a result of a compensable accident and agreed to provide dependency benefits pursuant to statute.  As of June 1, 2001, N.J. S.A. 34:15-13 provided that, in the case of death, compensation shall be computed for one dependent, 50% of wages, and for three dependents, 60% of wages.

Pursuant to this section, respondent began paying dependency benefits equal to 60% of wages, or $519.23 per week, to decedent’s spouse and his dependent children.   Initially, two hundred fifty nine dollars and sixty one cents ($259.61) per week, or one-half of the dependency benefit was paid to decedent’s spouse, Kelly Stark, and the remaining one-half was paid to his two children. 

Respondent wanted court approval of the above payments and thereupon filed claim petition 2001-030300 in the Burlington County District.  At a pretrial conference, a  Judge of Compensation indicated that each dependent should file a separate claim petition, and thereafter additional claim petitions were filed by petitioner’s widow, Kelly Stark and by Sara Drumheller on behalf of her two children.  The parties subsequently agreed that each dependent should receive one-third of the dependency benefit which was calculated at $173.08 for each dependent.  However, prior to the entry of an Order Approving Settlement, N.J.S.A. 34:15-13 was amended to provide that in the case of death,  compensation shall be computed for one or more dependents, at 70% of wages.  As a result of the amendment, petitioner sought to increase the dependency benefits to 70%.  Respondent took the position that because the decedent, Troy Stark, had died prior to January 14, 2004, the effective date of the amendment, it was entitled to pay 60% of wages to decedent’s dependents.  The sole issue in this case is whether the dependents of Troy Stark are entitled to an increase in dependency benefits as a result of the amendment of N.J.S.A. 34:15-13. 

LEGAL ANALYSIS AND DECISION

Chapter 253 of the laws of 2003, enacted by the Senate and General Assembly of the State of New Jersey, amended R.S. 34:15-13 as follows:

“34:15-13.  Except as hereinafter provided, in case of death, compensation shall be computed but not distributed, on the following basis:

1.        for one or more dependents, 70% of wages.”

Subsection b. through e.  of section 13, which previously provided for increases in dependency benefits up to 70% of wages for additional dependents, were deleted.  Section 4 provides “This Act shall take effect immediately” without any indication as to whether the amendment should be applied retroactively or prospectively.

The dependents of decedent argue that they are entitled to have dependency benefits increased to 70% of decedent’s wages as of January 14, 2004 on the basis of legislative intent and case law, citing the case of Harris v. Branin Transport, Inc., 312 N.J. Super. 38 (App. Div. 1998).  Respondent disagrees, arguing that legislative intent is unclear, and statutory construction favors prospective application of statutes, citing Gibbons vs. Gibbons, 86 N.J. 515 (1981).

Looking first at the issue of legislative intent, decedent’s dependents point out that prior to the enactment of chapter 253, both the Senate and Assembly had introduced legislation to amend N.J.S.A. 34:15-13.  Senate Bill #886, introduced February 7, 2000, and Senate Bill #1416, introduced March 26, 2002 each contained a provision to amend N.J.S.A. 34:15-13 to read:

“For one or more dependents, 100% of wages.  Each Senate bill also provided, under section 2, as follows:  ‘This Act shall take effect immediately and apply to all claims accruing on or after the effective date.’”     

Similar bills were introduced in the Assembly.  Assembly Bill #3389, introduced October 18, 1999, Assembly Bill #1125, pre-filed for introduction in the 2000 session, and Assembly Bill #1835, introduced February 21, 2002 each provided that dependency benefits for one or more dependents should be increased to 100% of wages.  Each Assembly bill also contained identical language with regard to the effective date – that the bill would take effect immediately and apply to all claims accruing on or after the effective date. 

Comparing the language of the several bills introduced in the Legislature with chapter 253, which was approved on January 14, 2004, it is apparent that the legislative compromise which resulted in increasing dependency benefits to 70% of wages instead of 100% of wages included the deletion of the words “ and apply to all claims accruing on or after the effective date.”  Thus, considering the effective date after deletion of the above phrase, one can infer that the Legislature intended the Act to apply to all dependency claims as of January 14, 2004 rather than only those accruing on or after that date.

The petitioner’s argue for this interpretation, and also point to the fiscal analysis done by the Office of Legislative Services.  That analysis, which accompanied Senate Bill #1532, introduced May 16, 2002, and containing the same language as chapter 253, points out that the total Workers’ Compensation cash benefits in death cases in New Jersey have been no more than $12 million for most of the last several years.  The analysis estimates that the bill will cost the State of N.J. approximately $80,000 per year and then states in pertinent part: 

“This is based on a reasonable projected scenario which assumes an average claim currently has two dependents (make the average current benefit amount equal 55% of the workers’ wages) . . . . there would be a 10% increase in the average benefit as a portion of wages, of (sic) 18% increase over the previous amount paid.  This would produce a total cost for all employers of approximately $2 million or 0.2 percent of all Workers’ Compensation benefits.  With respect to the cost to the State as an employer, this 0.2 percent increase applied to the total $40 million in Workers’ Compensation for State employees appropriated in the current budget, would increase State costs approximately $80,000 per year.” 

Thus, this analysis also appears to support dependent’s argument that the Legislature intended this bill to apply to current dependency claims, and not just those occurring in the future.  Unfortunately, no clear or definitive statement of legislative intent accompanies the bill.  As a result, the respondent argues that since there is no clear statement with regard to whether the statute should be retroactively applied, rules of statutory construction should be applied as set forth in Gibbons v. Gibbons, 86 N.J. 515 (1981), which indicates that New Jersey courts favor prospective application of statutes.   Respondent further argues that none of the exceptions created by our Supreme Court to this general rule apply in the instant case.  Respondent concludes that a statute will not be given retroactive application if it would result in “manifest injustice” to one of the parties, and argues that manifest injustice would result in this case if it were required to pay dependency benefits on past claims. 

In considering respondent’s position, it is instructive to look at prior cases decided by our courts.  In Panzino v. Continental Can Co., 71 N.J. 298 (1976) the Supreme Court considered the case of a petitioner who filed a claim for occupational hearing loss six years after retiring from employment with respondent.  As our Workers’ Compensation Act was then written, an occupational claim was required to be filed within two years of the employee’s last exposure during the course of employment, or within one year of discovery.  Furthermore, the statute provided that a claim would be “forever barred” unless presented within five years from the date of last exposure.  Petitioner filed his claim for hearing loss six years after retiring from his employment with respondent corporation, and within one month of discovering that his hearing impairment was work related.  Two months before his claim was heard by the Workers’ Compensation Court, the Legislature amended N.J.S.A. 34:15-34 to eliminate all time limitation requirements except “that where a claimant knew the nature of the disability and its relation to the employment,” the petition must be filed “within two years after the date on which the claimant first had such knowledge.”  The Supreme Court held that the statutory amendment was intended to have retrospective operation, so that petitioner had the right to prosecute his claim.

In explaining its rationale, the Supreme Court noted that in Kane v. Durotest Corp., 37 N.J. 552 (1962) it had dismissed a claim petition  which had been brought after the five-year statutory period stating “If the five-year limitation for prosecution of the compensation action occasionally operates harshly and lengthening of the period is considered desirable, the appeal for such change must be to the Legislature.”  Kane, supra. 37 N.J. at 556.  The Panzino court further stated: 

“ . . . it has long been axiomatic that the Workers’ Compensation Act is to be liberally construed. . . . Close v. Kordulak Brothers, 44 N.J. 589, 604 (1965).  Bearing this in mind, being aware of the mischief sought to be remedied and always conscious of the beneficent purposes of this important social legislation, we perceive no reason why the Legislature would have wished to place any greater limitation upon the reach of the statute than can sensibly be drawn from its language.  Accordingly we conclude that the enactment should be read to cover any claimant who files a petition within two years of the date on which he learns the nature of his disability and its relation to his employment.”  Supra. at 303. 

The Supreme Court went on to consider respondent’s argument that the amendment was unconstitutional because it abrogated a vested right which respondent had in denying such a claim pursuant to State v. Standard Oil Co., 5 N.J. 281 (1950) where the Supreme Court stated that:  “(t)he  principle is embedded in our jurisprudence that where a right of action has become barred under existing law, the statutory defense constitutes a vested right which is proof against legislative impairment.”  (5 N.J. at 293).

The court, however, chose to confine the above-cited language to the issue before the court in State v. Standard Oil Co., noting that the effect of lapse of time in that case was based upon a claim sounding in contract.  The court asserted that the claim in Panzino did not spring from contract, but was a right borne of statute, citing N.J.S.A. 34:15-30.  It then stated: “We are satisfied that the Legislature, by virtue of the 1974 amendment, has simply enlarged the availability of the statutory right to compensation for occupational disease by removing the five-year limitation period.”  The court noted that the compensation Act became binding upon employers and employees whose employment contracts antedated adoption of the Act, and, at least until an injury, the parties are bound by even radical and substantive changes in the Act made after the entry into the employment contract.  It concluded:  “Contract no more accurately describes the rights and duties of an employer and employee under the Workers’ Compensation Act than a paper tube corrects deafness.” 

In 1977, in Bush v. Johns-Manville Products Corporation, 154 N.J. Super. 188 (App. Div. 1997), the Appellate Division upheld a dependency claim brought by a widow whose husband had died from cancer causally related to exposure to asbestos 50 years earlier.  In upholding the right to bring the claim under the amended occupational statute, the court refused to increase the minimum dependency benefits applicable when her husband last worked for respondent in 1924.  In

so holding, the court stated:

“We are fully aware that the approach to the Workers’ Compensation Act should be upon both equitable and humanitarian principles. . . .  However, we cannot, in the guise of a liberal interpretation, rewrite the compensation act.  That is the sole province of the Legislature.  If application of the statute produces inequity, unfairness and hardship, the remedy is in the hands of the Legislature. . . .”     

In discussing the fact that the petitioner, as dependent of decedent, would receive only the minimum benefit of $15 per week pursuant to N.J.S.A. 34:15-37 the court noted that the problem of adequate compensation benefits has not been entirely ignored by the Legislature.  It went on to outline amendments which addressed certain increases in benefits.  The court then stated:

“While this problem has been partially addressed by the Legislature, the various revisions in benefits have been in the adjustment of the maximum percentage of wages to be paid as benefits.  There has been no change in the statutory definition of wages to which the increased rate is applied. . . .  If ongoing payments and compensation for occupational exposure resulting in disability after the lapse of many years are to be adjusted to meet inflation or other equitable factors, such revisions must take into account many considerations which are clearly matters for the legislative judgment rather than judicial mandate. . . .” (Bush, supra., at 196)

More recently, our Appellate Division dealt with an amendment to N.J.S.A. 34:15-13 in Harris v. Branin Transport, Inc., 312 N.J. Super. 38 (App. Div. 1998).   In that case, the Appellate Division upheld an amendment to section 13, deleting a credit which had been  available to insurance carriers after paying a widow dependency benefit for 450 weeks.  The statute had provided that compensation was to be paid, in the case of a surviving spouse, during the entire period of survivorship, or until the surviving spouse remarries, except that any earnings from employment by the surviving spouse after 450 weeks of compensation have been paid, shall be deducted from the compensation thereafter payable to the spouse.  The statute, as amended, provided “This compensation shall be paid in the case of a surviving spouse, during the entire period of survivorship, or until such surviving spouse shall remarry . . .”

In Branin, the petitioner’s spouse had died in 1976 and petitioner had been receiving dependency benefits since that time.  At the end of 450 weeks, the insurance carrier began taking a credit for earnings which were paid to the petitioner.  After the amendment became effective, petitioner filed an application with the compensation court to delete the credit and to compel the carrier to pay dependency benefits in accordance with the amendment. 

In considering whether the amendment should be retroactive, the Appellate Division considered the legislative history as well as the financial note which had been attached to the bill prior to its passage.

In holding that the amendment was “secondarily retroactive, and therefore applicable to petitioner as of its effective date, the Appellate Division stated: 

“The Workers’ Compensation Act’s purpose is to provide a method of compensation for the injury or death of an employee, irrespective of the fault of the employer for contributory negligence and assumption of risk of the employee . . . With regard to the dependency section, the Act should be construed liberally to make the cost of work-connected injuries part of the cost of the employer’s product . . .  The amendment was passed to enable widows to have the benefit of their earnings.  Interpreting the amendment to have retroactive effect promotes the public interest in providing financial assistance to widows in time of need regardless of their employment status.”

Harris, supra. at 46, 47. (Harris, supra., at 48).

In dealing with respondent’s argument that a retroactive application of the statute would result in manifest injustice because it upset respondent’s expectations of what it was obligated to pay, the court noted that the Legislature had made a judgment that the public interest promoted by the amendment outweighed the importance of the employer’s interests that was impaired.  It then stated: 

“A State ‘may, in the exercise of the police power, enact a statute to promote the public health, safety, morals or general welfare’. . . .So long as the public interest outweighs the private right, an Act can apply retroactively and diminish or destroy that right . . . . Retroactive civil legislation . . . generally does not violate due process unless it results in ‘particularly harsh and oppressive’ consequences.  (citations omitted)  As we have indicated, such harsh and oppressive consequences are not present in this case.”  (Harris, supra., at 48)

The Appellate Division then went on to discuss the fact that the amendment was secondarily retroactive because it was effective as of the date of its passage, and did not change what the law had been in the past.  The court then stated:  “A secondarily retroactive law is valid so long as it is not arbitrary or capricious.”  Harris, supra. at 49.

Applying the above principles to the instant case, I conclude that the amendment to N.J.S.A. 34:15-13 which increased dependency benefits to 70% of wages for one or more dependents is “secondarily retroactive” and applicable to the dependents in the instant case as of January 14, 2004, the effective date of the amendment.  In arriving at this conclusion, I first looked at the legislative history of chapter 253 and Senate Bill #1522, in comparison to the prior bills which were not enacted by the Legislature.  An inference can be drawn that when the Legislature reduced dependency benefits from 100% of wages to 70% of wages, and deleted the words “and apply to all claims accruing on or after the effective date,” the Legislature intended the amendment to apply to dependency claims as of its effective date.  A similar inference can be drawn from the fiscal analysis prepared by the Office of Legislative Services which concluded that the proposed amendment would produce a total cost for all employers of approximately $2,000,000 or 0.2% of all Workers’ Compensation Benefits, and would increase State costs by approximately $80,000 a year.  These numbers suggest that the Legislature considered, when passing the amendment, the financial impact of the amendment upon insurance companies and the State of New Jersey.  Thus, I conclude that the Legislature intended the amendment to be effective as of January 14, 2004 to dependents who had applied for dependency benefits as of that date.  I further note that in the instant case, the claims of the Stark dependents were pending before the Division of Workers’ Compensation but no formal Order for benefits had been entered as of January 14, 2004. 

There are substantial similarities between the instant case and Panzino vs. Continental Can Co., supra.  In Panzino, the Legislature was seeking to increase time restrictions in occupational claims which were found to have become “burdensome” and “arbitrary” since experience had revealed that occupational diseases often do not become manifest until years after exposure.  In the instant case, the amendment passed by the Legislature is clearly an effort to provide greater financial assistance to widows and other dependents in time of need, undoubtedly an effort to deal with the impact of inflation on such benefits.  Just as in Panzino, the claims of the petitioners herein are grounded in the statute, and cannot be characterized as deriving from the contract of employment.  The amendment passed by the Legislature on January 12, 2004 was meant to enlarge the rights of dependents by increasing the benefits which they are to receive as a result of the death of the person upon whom they depended.

In the instant case, respondent argues that increasing dependency benefits pursuant to the amended statute would deprive respondent of a vested right which would clearly result in a manifest injustice.  However, as the court in Branin pointed out, a retroactive amendment does not generally violate due process unless it results in “particularly harsh and oppressive” consequences.  I conclude that “harsh and oppressive” consequences are not present in the instant case.  First, had the decedent, Troy A. Stark suffered a stroke during surgery due to bilateral pulmonary emboli and become totally and permanently disabled, respondent would have been obligated to pay 70% of wages for the remainder of his life.  Or, if Troy Stark had left five or more dependents, respondent would have been obligated to pay dependency benefits of 70% of wages.  Thus, the payment of 70% of wages as the result of serious injury or death was not something which was beyond the expectation of the Workers’ Compensation carrier at the time it entered into its contract of insurance with the employer.  The amendment is simply requiring the insurance carrier to pay 70% of wages to one or more beneficiaries, instead of five or more beneficiaries, thereby imposing a new duty or liability based upon past acts.  Harris, supra., at 48, citing Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (1976).  Furthermore, under the old law, the amount which the Workers’ Compensation carrier would have paid would have changed over the years.  It would have been reduced from 60% to 50% upon the emancipation of Troy Stark’s two children.  It could have been reduced to zero if Mrs. Stark had remarried.  Clearly, since the obligations of an insurance carrier under the Workers’ Compensation Act are set by statute, those obligations can change in the event of amendment.  Given the nature of the amendment in the instant case, it cannot be said that the action taken by the State Legislature in increasing dependency benefits to 70% of wages was arbitrary, unreasonable or irrational. 

The dependents in the instant case are entitled to receive dependency benefits equal to 70% of wages, retroactive to January 14, 2004.  I request David Fox, Esq., attorney for petitioner, Kelly Stark, the spouse of decedent, to submit an Order consistent with this decision. 

                                                                        _________________________________

                                                                        Cosmo A. Giovinazzi, III
                                                                        Judge of Compensation

July 23, 2004