New Jersey Supreme Court Finds Compensability in Parking Lot Case Dismissing the Employer’s Liability in the Third Party Action

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On January 18, 2022, the New Jersey Supreme Court rectified a decision of the Appellate Division and found the injuries sustained in a parking lot owned and controlled by the employer were indeed compensable. In Diane Lapsley v. Township of Sparta, the Supreme Court reinstated the Judge’s decision and reversed the decision of the Appellate Division and in doing so, dismissed the third party claim filed by the injured worker against the Township of Sparta.

On February 3, 2014, the petitioner left work early when the Township closed the library where she worked due to snowfall. The petitioner’s husband came to pick the petitioner up and as they were walking to his car that was parked in a lot adjacent to the library, the petitioner was struck by a snowplow owned by the Township and operated by a Township employee. The accident caused severe injuries to the petitioner’s leg resulting in multiple surgeries.

The petitioner is a librarian for the Sparta Public Library. The library is in a municipal complex with athletic fields, offices, and 3 common use parking lots. The Township owns and maintains the parking lots, although they did not direct the employees where to park, nor did they restrict the employees' manner of traveling between the parking lots and the library.

Rather than file a workers’ compensation claim, the petitioner filed a civil lawsuit (as well as a subsequent workers’ compensation claim) against the Township. The motivation for the third party suit would be the likelihood of a much greater civil damage award as opposed to the benefits available under the workers’ compensation statute. The Workers’ Compensation Judge (WCJ) found that the injuries arose out of and during the course of employment and were compensable under the Workers’ Compensation Act. In doing so, the third party case would be dismissed since the Township and the co-employee, the driver of the tow truck, would be immune from suit. The Appellate Division reversed finding that the injuries were not compensable under the Workers’ Compensation Act.

When the decision of the Appellate Division was first rendered, it seemed to be incorrect and similar to some recent Appellate decisions over the past several years rejecting the defense that a lawsuit could not commence since the defendant was the employer. Allowing the suits to proceed permitted much larger jury verdicts. In reviewing this case, however, the Supreme Court noted that the site of the accident was a parking lot adjacent to the petitioner’s job site at the library. There was no dispute that the Township controlled the parking lot through ownership and maintenance. In fact, the Township’s plowing of the parking lot of snow when the accident occurred further demonstrated and emphasized the Township’s exercise of control over the parking lot. Based upon these facts, the Supreme Court had no difficulty in finding that the petitioner was entitled to workers’ compensation benefits as her injuries arose out of and during the course of her employment. The Court rejected the petitioner’s argument that the Township exercised no control over the petitioner’s use of the parking lot, however, the argument misses the point. Control is an issue if the employer does not own or maintain the premises.

In this case, the employer both owned and exercised control over the premises as reflected by their maintenance of the premises. The issue of control is much more often applied to a multitenant parking lot where the employer does not own the parking lot and certainly does not maintain it or plow it as was the case here.

The decision of the Supreme Court was an easy one.

Comment: As noted, it was the decision of the Appellate Division that was surprising and not the decision of either the WCJ or the Supreme Court. The petitioner’s goal of avoiding the more limited benefits under the workers’ compensation statute was clear in the attempt to pursue a third party claim against the co-employee. However, the employer owning and maintaining the premises where she fell eventually resulted in the unavoidable conclusion that this was a work related event. She had not left the employer’s premises, therefore, her commute home had not yet begun.

As we advised a few weeks ago, the Governor has signed into law a new Parking Lot Bill that may result in many more cases being decided under various fact patterns. According to the new law, employment shall be deemed to commence, if an employer provides or designates a parking area for use by its employees when the employee arrives at the parking area before reporting for work and terminates when they leave the parking lot at the end of the workday. Whether the comment made by the Supreme Court that accidents exclude areas “not under the control of the employer” or the statute finding course and scope of employment commences simply when the employee arrived at the parking area whether or not any control is exercised remains to be seen.

We will keep you apprised of the cases as they develop.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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