Appellate Division determines it is an abuse of discretion to enter an order for sanctions without permitting counsel to be heard and without specific findings as to why a settlement payment was unreasonably delayed.

The petitioner filed a workers’ compensation case in January 2009 that was ultimately resolved through an order approving settlement for partial total disability. In December 2011, an application for review or modification was filed and was settled for $66,074.25, and an order for this settlement was entered on September 3, 2020.

Sixty-nine days later, the petitioner’s attorney moved to enforce the September 2020 order as the employer had not made the settlement payment, despite multiple phone calls and emails between counsels. The petitioner sought interest and penalties pursuant to N.J.S.A. 34:15-28 and “an additional assessment of 25% for unreasonable payment delay and reasonable legal fees.” No opposition was filed. 

According to the petitioner’s attorney, a telephonic conference was held on December 7, 2020, though there was no transcript of that conference. On that day, the workers’ compensation judge issued an oral decision, noting the petitioner had been waiting for payment since the order was entered and it still had not been paid. The judge found there was an unreasonable delay of payment, though no reasons were provided. The judge ordered costs and interest on the settlement payment due; an additional 25% for unreasonable delay or $16,287 to the petitioner; $4,000 for attorneys’ fees; and $5,000 in penalties payable to the Second Injury Fund. Additionally, $2,188 was ordered for attorneys’ fees and $125 for court reporter costs. A written order was entered, memorializing the oral decision.

The employer appealed, arguing the judge abused his discretion in awarding the penalties and sanctions without a hearing. The Appellate Division noted that, based on the circumstances, it could not decide if the penalties and assessments under the December 7, 2020, order were reasonable. The Appellate Division determined it was an abuse of discretion to enter an order for sanctions without permitting counsel to be heard and without specific findings as to why the payment was unreasonably delayed. As such, the order was vacated and remanded for further proceedings.

_{What’s Hot in Workers’ Comp, Vol. 26, No. 11, November 2022 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2022 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}