Opinion
DOCKET NO. A-3504-11T1
03-20-2013
LYDIA M. COTTONE, Petitioner-Respondent/ Cross-Appellant, v. MEDICAL SUPPLY CORP., Respondent-Respondent. NEW JERSEY MANUFACTURERS INSURANCE COMPANY, Intervenor-Appellant/ Cross-Respondent.
Michelle L. Hodak argued the cause for appellant/cross-respondent (Margolis Edelstein, attorneys; Ms. Hodak, on the briefs). Peter C. Vitanzo argued the cause for respondent/cross-appellant Lydia Cottone. Peter Ventrice argued the cause for respondent Medical Supply Corp. (Galen W. Booth, attorney; Mr. Booth, on the brief). Angelo R. Giacchi argued the cause for respondents Donald and Karen Bonica (Tompkins, McGuire, Wachenfeld & Barry, LLP, attorneys; Mr. Giacchi, of counsel and on the brief; Kelly Jackson Cozza, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Fisher and Alvarez.
On appeal from the New Jersey Department of Labor, Division of Workers' Compensation, Claim Petition Nos. 2006-6935 and 2010-369.
Michelle L. Hodak argued the cause for appellant/cross-respondent (Margolis Edelstein, attorneys; Ms. Hodak, on the briefs).
Peter C. Vitanzo argued the cause for respondent/cross-appellant Lydia Cottone.
Peter Ventrice argued the cause for respondent Medical Supply Corp. (Galen W. Booth, attorney; Mr. Booth, on the brief).
Angelo R. Giacchi argued the cause for respondents Donald and Karen Bonica (Tompkins, McGuire, Wachenfeld & Barry, LLP, attorneys; Mr. Giacchi, of counsel and on the brief; Kelly Jackson Cozza, on the brief). PER CURIAM
Intervenor New Jersey Manufacturers Insurance Company (NJM) appeals a February 6, 2012 workers' compensation determination that petitioner Lydia Cottone was not entitled to benefits because her employer, respondent Medical Supply Corp. (MSC), did not control the parking lot where her accident occurred. We affirm.
On December 22, 2005, at the close of the work day, Cottone exited the MSC building. In the parking lot, a coworker backed her car into Cottone, who suffered a fractured skull and internal bleeding. Because of the extent of her injuries, NJM eventually paid Cottone the maximum personal injury protection coverage (PIP), or $250,000, as well as lost wage benefits in the amount of $250 per week, available through her husband's automobile insurance policy. Her underinsured motorist (UIM) claim is pending the outcome of this appeal.
Some three months after the accident, on March 8, 2006, Cottone filed a claim with the Division of Workers' Compensation. NJM learned of the filing on September 25, 2006, after the petition was dismissed by the court. Cottone's counsel provided NJM with a copy of the order. NJM eventually reviewed a transcript of the proceeding, and concluded that the workers' compensation petition had not been fully adjudicated on the merits. Accordingly, it filed a verified complaint and order to show cause in the Law Division, seeking to deny the UIM claim on the theory that it was barred by the availability of workers' compensation benefits. On August 29, 2008, the Law Division judge ordered NJM to initiate proceedings in the workers' compensation court to reopen the proceedings and intervene, as he agreed that the original petition had not been adjudicated on its merits.
The Division of Workers' Compensation allowed NJM to intervene, and reopened the matter. At a case management hearing, the parties entered into certain stipulations of fact, reproduced here in full as described in the judge's February 6 decision:
1. The property in question was leased by Donald and Karen Bonica.In addition to these stipulations, Donald Bonica testified extensively during the course of several days of plenary hearings.
2. If the property were leased by Medical Supply Corporation, then the petitioner would have been injured on the respondent's property. The parties further agreed that in such instance, the matter would be compensable.
3. Medical Supply Corporation was insured by Hanover.
4. Donald and Karen Bonica did not have workers' compensation insurance.
5. The property in question has three buildings. Donald and Karen Bonica sub-lease two of those buildings. In one of those sub-let buildings, Medical Supply Corp. had retained some use. A third building was sublet to another business entity, not a party to the action at bar.
6. No parking spots were designated by Medical Supply Corp. for its employees.
7. Medical Supply Corp. was a valid New Jersey Corporation. The shareholders were Donald, Monica and Karen Bonica.
The workers' compensation judge found that Donald Bonica was president of MSC, and his wife, Karen Bonica, vice-president. MSC was incorporated in 1987 and in the business of providing medical supplies to physicians. Donald owned forty-nine percent of the company's stock while his wife owned fifty-one percent. When conducting corporate business, Bonica would sign documents in his own name as well as in his capacity as MSC's president. He acknowledged that MSC neither had a board of directors nor conducted annual shareholders meetings. Bonica had no knowledge regarding the corporation's bylaws as he relied on his attorney and accountant in conducting corporate business, simply following their directions. At the time of the accident, he and his wife, individually, rented the three buildings on the property. MSC in turn leased its business space from the Bonicas, but no written lease existed. The other two subtenants, who occupied an entire building plus a portion of the building occupied by MSC, paid their rent to MSC. MSC in turn paid rent for the entire property to a real estate brokerage firm. The three buildings primarily functioned as warehouses with overhead doors, and there was no designated entrance for MSC employees. There was no policy regarding employee parking and no parking spaces were designated in the parking lot, which accommodated about fifteen to twenty vehicles. Bonica took over the responsibility for plowing the snow in the lot some two or three years after the lease commenced in 1990; MSC paid for the cost and was reimbursed by the other tenants in proportional shares. Bonica, however, individually negotiated the oral contract with the snow plow company. He was also personally responsible for cleaning the sidewalks and cutting the grass. He maintained an oral contract with the landscaping companies, although MSC paid for their services.
The court went on to engage in the following legal analysis:
1. The court finds that after her work day petitioner exited one of MSC's buildings through one of four undesignated exits. While walking in a parking lot not under the control of MSC, to a non-assigned parking spot, which spots are shared by other tenants and the public, at which time the petitioner was struck by a coworker who had also completed her work day. Under the premise rule the accident did not occur in an area of MSC's control, because there are insufficient facts to support same; therefore, the coming and going rule clearly applies. Whether the accident occurred 10 feet or 30 feet from MSC's building is irrelevant as MSC exercised no control in this area. Thus, the petitioner was not entitled to workers' compensation benefits through MSC.Having reached the conclusion that petitioner was not entitled to benefits, the petition was again dismissed.
2. The court finds that there is no du[a]l employment relationship which existed among MSC and the Bonica(s) as there are insufficient facts to support same. Similarly, as the petitioner neither performed any personal work for the Bonicas, nor was paid by the Bonicas, there is no employment relationship between the petitioner and the Bonicas. Thus, the petitioner was not entitled to workers' compensation benefits through the Bonica's and UEF.
3. The court finds that MSC is a valid corporation. There is no showing that the corporate entity had been used to accomplish an unjust, wrongful, or fraudulent purpose. With such absence the corporate veil should not be pierced.
The New Jersey Supreme Court set forth the considerations in piercing the corporate veil, the seminal case, State v. Ventron Corp., 94 N.J. 473 (1983) [(citations omitted)]:
We begin with the fundamental propositions that a corporation is a separate entity from its shareholders, and that a primary reason for incorporation is the insulation of shareholders from the liabilities of the corporate enterprise. Even in the case of a parent corporation and its wholly-owned subsidiary, limited liability normally will not be abrogated.4. With regard to equitable estoppel, given the above findings of fact and law, the issue is moot.
Except in cases of fraud, injustice, or the like, courts will not pierce a corporate veil. The purpose of the doctrine of piercing the corporate veil is to prevent an independent corporation from being used to defeat the ends of justice, to perpetrate fraud, to accomplish a crime, or otherwise to evade the law.
As an aside, the court notes no allegation that Bonica was negligent with regard to the accident at bar.
Certain stipulated facts were developed on the record for review of this legal question. Subsequently, there was correspondence requesting additional facts. During a conference reviewing same, a material fact became in question. Thus, a complete set of stipulated material facts could not be agreed upon. Since the matter is moot, the court issues the within opinion.
By way of points on appeal, NJM asserts the following issues for our consideration:
I. THE WORKERS' COMPENSATION COURT ERRED AS A MATTER OF LAW THAT PETITIONER'S CLAIM WAS NOT COMPENSABLE BECAUSE MSC MAINTAINED NO CONTROL OF THE PARKING LOT.
II. MSC HAD EXCLUSIVE USE AND CONTROL OF THE PREMISES, INCLUDING THE PARKING LOT. BECAUSE MSC HAD EXCLUSIVE USE OF THE PARKING LOT AND DERIVED A BENEFIT FROM ALLOWING ITS EMPLOYEES TO USE THE PARKING LOT, THIS MATTER SHOULD BE FOUND COMPENSABLE. III. LEGISLATIVE POLICY MANDATES THAT THIS MATTER BE DEEMED COMPENSABLE.
IV. MSC IS THE ALTER EGO OF DONALD AND KAREN BONICA. AS SUCH, THERE IS SUFFICIENT EVIDENCE FOR THE COURT TO PIERCE THE CORPORATE VEIL I.E. FIND THAT MSC AND DONALD AND KAREN BONICA ARE ONE [AND] THE SAME ENTITY.
V. SUFFICIENT FACTS EXIST TO PIERCE THE CORPORATE VEIL.
We reject these contentions of error and affirm based upon the workers' compensation judge's written opinion, with some brief comments.
It bears repeating that appellate review of a decision rendered by a judge of compensation is limited to determining "whether the findings . . . could reasonably have been reached on sufficient credible evidence present in the whole record, after giving due weight to [the judge's] expertise in the field and his opportunity of hearing and seeing the witnesses." De Angelo v. Alsan Masons, Inc., 122 N.J. Super. 88, 89-90 (App. Div.) (citing Jackson v. Concord Co., 54 N.J. 113, 117-18 (1969); Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)), aff'd o.b., 62 N.J. 581 (1973). We therefore do "not substitute [our] own judgment for the agency's even though [we] might have reached a different result." Raso v. Ross Steel Erectors, Inc., 319 N.J. Super. 373, 380 (App. Div.) (citing Clowes v. Terminix Int'l Inc., 109 N.J. 575, 588 (1988)), certif. denied, 161 N.J. 148 (1999).
The judge of compensation's interpretation of the law, however, is not entitled to special deference. Sexton v. Cnty. of Cumberland, 404 N.J. Super. 542, 548 (App. Div. 2009) (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)). If mistaken, the application of law to facts will result in reversal. See Verge v. Cnty. of Morris, 272 N.J. Super. 118, 123 (App. Div. 1994).
In this case, the burden is on NJM to demonstrate "that the agency's action was arbitrary, unreasonable or capricious . . . ." Raso, supra, 319 N.J. at 380 (citing Barone v. Dep't of Human Servs., 210 N.J. Super. 276, 285 (App. Div 1986), aff'd 107 N.J. 355 (1987)).
NJM has not met that burden. The judge of compensation did not err in his finding that the Bonicas, not MSC, controlled the parking lot. Neither did he err in finding that the parking lot where Cottone was injured was not within the business premises.
In order for workers' compensation benefits to be available to an employee injured in a parking lot, the employer must be found to have exercised some control over it, even if the parking lot is adjacent to the building where the workplace is located. Novis v. Rosenbluth Travel, 138 N.J. 92, 96 (1994). This case precisely fits into the parameters of Novis. MSC was not the lessee, the owner, and did not exclusively control the parking lot. MSC shared the lot with the other unrelated business tenants. Thus the lot was not a portion of the business premises nor had Cottone's employment continued in some fashion as she walked through the lot towards her own vehicle.
Furthermore, in Novis, the petitioner "sustained injuries while walking across the only sidewalk leading from an office-building parking lot to the entrance of the office building in which her employer's branch office was located. Id. at 93. Nonetheless, "[t]he Division of Workers' Compensation determined that the injury did not arise out of or in the course of her employment," ibid., which conclusion was affirmed by the Supreme Court. There is no significant distinction between the facts in that case and the facts of this one.
NJM urges us to rely instead upon the analysis found in the unpublished opinion in Goldstein v. Rosenberg & Goldstein, No. A-4550-04 (App. Div. Feb. 10, 2006) (slip op. at 1-3). But that petitioner was injured when he was "dropped off . . . at the edge of the parking lot, in front of the porte-cochere (entranceway) to the building." Id. at 2. In fact, "the judge of compensation found the front entrance to the office building where petitioner fell was under the 'control' of his employer," thereby coming within the workers' compensation definition of premises — a far cry from this scenario. Id. at 3. Cottone was walking across a parking lot used not only by MSC, but by other tenants, and the public. The lot was owned and rented by individuals other than her employer. In our opinion, therefore, the judge of compensation's interpretation of the law is eminently reasonable and entitled to deference.
NJM also contends that the corporate veil should be pierced because the Bonicas and MSC are one and the same. The record does not support the claim.
The burden of proof is on the individual who seeks to pierce the corporate veil. Verni ex. rel. Burstein v. Harry M. Stevens, Inc., 387 N.J. Super. 160, 199 (App. Div. 2006), certif. denied, 189 N.J. 429 (2007). NJM does not direct us to any fact which establishes that the Bonicas created MSC or otherwise manipulated MSC's corporate format in order to accomplish fraud, injustice, or in some other fashion "defeat the ends of justice." Dep't of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 500 (1983). NJM's further argument that the corporate veil should be pierced in order that future employers are discouraged from creating rental arrangements for parking lots to avoid workers' compensation liability is based on sheer speculation. This point has no merit.
We do not reach Cottone's argument that NJM should be collaterally estopped from challenging the workers' compensation decision made in this case.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APELATE DIVISION