While each litigated case in the workers’ compensation court is unique, the standard process of how a case gets to trial is roughly the same. One party files a Petition and the opposing party files an Answer. Days later, the parties typically exchange what are called discovery requests. These requests most commonly include interrogatories and requests for production of documents. In general, interrogatories are questions that the opposing party must answer, while requests for production of documents are just that, a request for tangible records or physical things to be disclosed.

The main purpose of discovery is to allow the investigation of all available and properly discoverable information in order to limit the issues at trial while allowing for an efficient resolution of a legal claim. Moreover, discovery is meant to allow adequate pretrial preparation. Above all, discovery is meant to eliminate an opponent’s tactical surprise with the aim being a result reached upon on the merits of the case rather than legal maneuvering. Norquay v. Union Pacific Railroad, 225 Neb. 527, 407 N.W.2d 146 (1987).

Because discovery occurs in virtually every case, discovery issues are one of the most common disputes the compensation court judges must determine. These disputes include a plethora of issues ranging from failure to timely respond to discovery, to providing incomplete or inadequate answers, or making objections not supported by law. Because discovery disputes are one (if not the most) filed motions in the court, it naturally follows that each judge has formed his or her own unique way of viewing the associated rules. This article specifically focuses on the two of the more common issues: failure to respond to discovery and allegedly “irrelevant” requests.

Before divulging into each judges’ view of these three disputes, it should be noted that every single judge has emphasized the importance of the parties attempting to resolve disputes without involvement of the Court. Indeed, the rules mandate such good faith attempts are made between the parties. See Nebraska Workers’ Compensation Court Rules of Procedure Rule 3(D)(4). Because motions require hearings and court reporters, these disputes can be unnecessarily expensive, and the parties should make every effort to attempt to agree on the extent of discoverable information.

In this author’s opinion, the most commonly filed Motion to Compel results from a party’s complete failure to answer discovery. In these cases, virtually every single judge will first order the non-answering party to respond to discovery within anywhere from 10 to 30 days. If the party still hasn’t responded within the ordered deadline, a split has been created as to what sanctions the Court can assess for the party’s failure to answer discovery. The more historical approach from the bench has been (in cases where the Plaintiff failed to respond) to dismiss his or her Petition with or without prejudice. If the Petition is dismissed with prejudice, it cannot ever be refiled at a later time. A Petition dismissed without prejudice can be refiled as long as the statute of limitations has not run. Judge Coe dismissed an action in August of 2021 with prejudice when the employee failed to respond to an order compelling discovery. Faatz v. American Dream, Doc 221, Page 0196 (Neb. Work. Comp. Court, 2021). Alternatively, Judge Stine in February of this year dismissed a Petition without prejudice for the failure to respond to the Court’s three prior orders compelling discovery. Pauletta v. Crete Carrier Corporation, Doc 221, No 0532 (Neb. Work. Comp. Ct. 2022). Judge Hoffert took a similar approach when dismissing a 2020 Petition without prejudice. Murphy v. Omaha-League of Human Dignity, Doc 220, No 0404 (Neb. Work. Comp. Ct. 2020). See also Wilson v. Advance Services, Doc 219, No 1401 (Neb. Work. Comp. Ct. 2021) (Judge Martin dismissing a Petition without prejudice).

While the various judges have differing views regarding whether to dismiss a Petition with or without prejudice for failure to respond to discovery, there tended to be agreement that the Petition should at least be dismissed. Contrary to that viewpoint, Judge Block, in recent decisions, has shown hesitancy to dismiss the pleadings. While he acknowledges that § 6-337(b) (2)(A-D) of the Nebraska Discovery Rules does allow for the Court to dismiss the present action, he has verbally expressed disagreement that it allows for a dismissal with prejudice. In fact, the exact language of the rule does not address whether the dismissal shall be with or without prejudice. The rules states that sanctions may include “(C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof or rendering a judgment by default against the disobedient party.” As contemplated by the rule, Judge Block has elected to instead stay the proceedings until the party fully and completely complies with the order regarding discovery. Logistically, a stay on the proceedings means that the Petition is still considered on file, but the Court will not set it for trial until the stay is lifted. Practically, this approach means an employee doesn’t risk his claim being barred by the statute of limitations because the Petition isn’t actually dismissed. It also tends to allow a litigated case to become stagnant because there is no pending trial date. Thus far, Judge Block seems to be the only sitting judge who is taking the “stay” approach, but it will be interesting to monitor if this trend gains notoriety with other judges who typically preferred to dismiss a Petition without prejudice.

Another common discovery dispute is over what counsel will define as “irrelevant” requests. In a workers’ compensation claim, the issues are relatively well defined. However, it sometimes happens that a party requests discovery on a topic that seems to be wholly irrelevant to the underlying workers’ compensation claim.

The general provisions governing discovery in Nebraska provide that a party may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter. Such inquires will be allowed “if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.” § 6-326. In other words, there’s no question that discovery is meant to be construed broadly. This means that arguing something is not relevant to the pending case is not an easy argument to win. Stetson v. Silverman, 278 Neb. 389, 770 N.W.2d 632, (2009). Even so, while the scope of discovery may be broad, it is not unlimited. For example, an employee is certainly entitled to know from the employer the names of every other employee that witnessed the alleged accident. However, knowing the social security number of the witnesses would be highly irrelevant. Chestnut v. Rodney E. Rohde, Doc 221, No 1022 (Neb. Work. Comp. Ct. 2022).

Each judges takes a unique approach to determining whether a discovery request is relevant to the underlying workers’ compensation claim, and the ultimate decision always comes down to the exact type of information requested. However, important trends can be collected from some of the more recent cases. Judge Hoffert, for example, addressed whether an employee’s social media profile was relevant. In holding it was not, Judge Hoffert highlighted the lack of “factual predicate” underlying the request. Stated another way, Judge Hoffert noted the Defendant ought to present some kind of argument as to why the information was remotely relevant (for example, did the employee testify at his deposition that he posted accident-related information on his Facebook?). Judge Fridrich, in early 2022, similarly discussed how the party requesting the information should be prepared to argue how the requested information is expected to lead to discoverable information. Ziegelbein v. Moen Steel Erection, Doc 221, No 0915 (Neb.Work.Comp.Ct. 2022).

Judge Martin perhaps put it best when she verbalized her frustration when a party used the discovery rules to create unnecessary disputes long withdrawn from the true issues of the case. She wrote in a recent Order on Plaintiff’s Motion to Compel Discovery, “In looking at this matter, the Court was left to wonder what plaintiff gained from expending the time and energy to obtain this information on an accepted compensable accident and injury for which benefits are being paid.” Reading between the lines, it’s important that parties use the discovery rules for their intended purpose – to investigate the issues to be presented at trial – not as a matter of unnecessary gamesmanship.

If you have questions about a potential discovery issue, please contact any of the lawyers at CPW by phone or email. Want to ensure you don’t miss out on the next post in the CPW compendium series? Be sure to subscribe to our newsletter.

One of the most nettlesome questions in New Jersey workers’ compensation is whether a non-party can attend an IME and whether a petitioner or a physician can record a medical examination without the other party’s consent and use it at trial.  It is important to observe that the New Jersey Workers’ Compensation Act provides very little guidance on procedures regarding medical examinations other than one particular statutory provision which allows only an employee’s personal physician to attend an independent medical examination. 

The New Jersey Appellate Division in Kathleen DiFiore v. Tomo Pezic, A-2826-20, A-0367-21, A-1331-21, (App. Div. May 3, 2022) recently set down some very clear rules on recording and attendance for defense medical examinations.  The case focused on Rule 4:19 Physical and Mental Examination Of Persons. That civil court rule provides as follows:

In an action in which a claim is asserted by a party for personal injuries or in which the mental or physical condition of a party is in controversy, the adverse party may require the party whose physical or mental condition is in controversy to submit to a physical or mental examination by the medical or other expert by serving upon that party a notice stating with specificity when, where and by whom the examination will be conducted and advising, to the extent practicable, as to the nature of the examination and any proposed tests.

In civil court these exams are officially called DMEs (defense medical examinations), although litigation attorneys generally refer to them as IMEs as they are also called in workers’ compensation. The Court discussed prior New Jersey cases that have weighed in on various aspects of DMEs and departed from them to some extent.  The Court first observed that a DME is “… not an adversarial proceeding inevitably designed to disprove claims of injury and trap plaintiffs into admitting or showing their claims are exaggerated or fabricated.”  Rather, the Court said that the DME is a professional assessment that must adhere to the standards of the examiner’s profession. The Court also added, “Nor is the DME, as defendants tend to portray it, always a purely objective exercise unaffected by any conscious or subconscious biases of the examiner.  The examiners tend to be hired repeatedly by insurance companies and defense firms, with the expectation the examiners will assist the defense, if needed, as witnesses at trial.” The similarity of DMEs to IMEs is obvious.

The Appellate Division in the DiFiore case established some basic rules in regard to recording of a DME and third-party attendance.  “First, a disagreement over whether to permit third-party observation or recording of a DME shall be evaluated by trial judges on a case-by-case basis, with no absolute prohibitions or entitlements. . . . The trial court must balance the competing advantages and disadvantages tailored to the particular case.”

The Court added that the expert who performs the DME “does not have the right to dictate the terms under which the examination shall be held.”  The court noted that if the expert does not wish to proceed with the exam on the conditions imposed by the court, the examiner can withdraw from the examination.

The Court emphasized that to record an examination, the plaintiff must make a request and there must be consent to the request.  To that extent the DiFiore Court departed from the Carley case.  “Second, despite contrary language in Carley, we hold that, going forward, it shall be the plaintiff’s burden to justify to the court that third-party presence or recording, or both, is appropriate for a DME in a particular case, absent consent to those conditions.”  

Next the court suggested that technological advances make recording rather easy.  “We take judicial notice that with the pervasive use of pocket-sized smart phones as cameras and audio recorders, they can be unobtrusively placed on a tripod with minimal effort.”

The Court also addressed the presence of third parties in the examination. “… If the court permits a third party to attend the DME, it shall impose reasonable conditions to prevent the observer from interacting with the plaintiff or otherwise interfering with the exam.”

With respect to psychological examinations, the Court concluded that there is no reason to treat psychological examinations differently than physical examinations with respect to recording the examination or having third parties present.  “We also discern no reason to favor or disfavor third-party presence or recording for neuropsychological (or any other ‘mental’) DMEs as opposed to other specialties.”

Lastly, the Court stated that if an interpreter is needed for the exam, the examiner shall utilize a “neutral interpreter” agreed upon by the parties.

As all practitioners and judges well know, New Jersey is a state in which only one party has to consent to a recording.  Why then did the Appellate Division devote 44 pages to this important decision? It is important to understand that the consequence of the DiFiore decision is that without a request for a recording and without consent, the recording will not be permitted to be used at trial.  The point of this case is that if a party wishes to record an exam and use the recording at trial, the party must make an initial request. The same is true of a request to have a third party present in the examination. 

These rules are sensible.  The fundamental ruling in this case is that a request must first be made by the plaintiff to record the exam or to have a non-party attend the exam. Consent to the recording or attendance by the respondent or IME physician will resolve the issue.  Few cases will likely require a Judge to rule on the issue.

As mentioned above, the DiFiore case emerged from civil litigation. It did not involve a workers’ compensation case.  This issue will eventually get to the Appellate Division on appeal from the Division of Workers’ Compensation and will probably focus on a non-consensual recording of an IME that counsel attempts to use at trial.  Respondent will object based on DiFiore and an appeal will likely follow.  This practitioner expects that the Appellate Division will evaluate this issue exactly as it did in DiFiore. 

-------------------------------

John H. Geaney, Esq., is a Shareholder and Co-Chair in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.

The case of Donald Servais v. Ocean Wholesale Nursery, LLC., A-2988-20, (App. Div. July 14, 2022) presents an unusual legal issue in workers’ compensation.  The case involved a dispute about an employment separation agreement and whether that agreement could have been construed to constitute a payment of workers’ compensation benefits, thereby tolling the statute of limitations.

Mr. Servais suffered an amputation of three fingers of his right hand on January 26, 2016.  No claim petition was ever filed within the two-year statutory period, and respondent never paid any workers’ compensation benefits to Mr. Servais, believing that the injury occurred at petitioner’s home and that petitioner was not an employee.  Respondent hired petitioner as a consultant and not as an employee, although petitioner contended that over the course of five years his relationship with Ocean Wholesale Nursery, LLC changed to that of an employee.  Petitioner ultimately filed a formal claim petition on October 26, 2018, well past the two year statute of limitations.

Respondent, as insured by Farm Family Insurance Company and administered by ESIS, filed a motion to dismiss the claim petition under the two year statute of limitations.  Petitioner countered by raising an argument regarding an employment separation agreement signed on January 31, 2017 by both parties by which terms respondent paid $5,000 to petitioner to resolve their business relationship.  Petitioner argued that the employment separation agreement was ambiguous and could have led petitioner to believe that the $5,000 payment was in part a payment for the loss of his fingers. Petitioner argued that the claim petition was filed within two years of the date of signing the employment agreement and was therefore timely filed.

The parties agreed to try the issue of the statute of limitations separately and then reserve for a later trial all other issues, such as compensability and employment.  The judge heard testimony from petitioner, the Nursery’s owner, and the Nursery’s former general manager.  The judge reviewed the terms of the employment separation agreement and found Section 7 of the Agreement to be confusing. That section excluded from the Agreement “claims that may arise after the date (petitioner) signs this agreement.”  The judge thought that this language might lead petitioner to believe that any incidents that arose before he signed this Agreement were included.   The judge also found paragraph seven to be ambiguous because it excluded “(petitioner’s) rights to receive benefits for occupational injury or illness under the workers’ compensation law” but did not specifically mention a “traumatic injury.”  The judge acknowledged that there was no mention anywhere in the agreement of an injury to petitioner’s fingers but criticized the agreement for not informing petitioner of his right to file a workers’ compensation claim.

Based on his interpretation of the separation agreement the judge concluded that the separation agreement included any and all claims, including the loss of fingers.  The judge also found that petitioner was an employee and was injured during the course of employment, although the judge previously agreed that these issues would be held for a later hearing.  Finally, the judge apportioned $1,000 of the $5,000 paid under the separation agreement to the petitioner’s injury to his fingers.

Farm Family appealed the decision to the Appellate Division, which reversed in favor of Farm Family and vacated the substantial award to petitioner.  The Court said, “Reviewing the Agreement de novo, we perceive no ambiguity.  The plain language of the Agreement expressly excluded petitioner’s workers’ compensation claim.” The Court added:

Contrary to petitioner’s argument, paragraphs five and six of the Agreement would not reasonably lead a person to believe that the $5,000 payment under the Agreement was also a partial payment for his work-related injury because paragraph seven of the Agreement, clearly entitled in bold ‘Exceptions,’ expressly stated that the release in the Agreement did not ‘affect or limit’ his right to receive benefits for occupational injury under the Workers’ Compensation Law.

In the end, the Appellate Division held that petitioner failed to file his claim petition in time. The Court also added that the Judge of Compensation had no right to apportion $1,000 of the $5,000 payment under the separation agreement to the loss of petitioner’s fingers.  The Court said:

The judge’s finding that $1,000 of the $5,000 payment of the agreement was payment for petitioner’s loss of fingers has no basis in the record evidence. The judge faulted the agreement for not addressing petitioner’s loss of his fingers and for failing to inform petitioner of ‘his right to file a workers’ compensation claim and his inability to waive same.’ Yet, in the Agreement, petitioner did not waive his right to file a workers’ compensation claim. To the contrary, in the Agreement, petitioner expressly reserved his right to file a workers’ compensation claim.  He just didn’t do so timely.

The Court concluded by reversing the order denying respondent’s motion to dismiss and vacated the final judgment.  The Court did not reach respondent’s argument regarding denial of due process given the decision to dismiss the case on the statute of limitations.

This trial and legal brief in this case were handled by former Capehart attorney Dana Gayeski, Esq. and the appeal was argued by John Geaney, Esq.

-------------------------------

John H. Geaney, Esq., is a Shareholder and Co-Chair in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.

Practical Advice in New Jersey Workers’ Compensation

Our clients often ask great questions regarding settlements in New Jersey workers’ compensation, particularly regarding the two types of settlements (Orders Approving Settlement, and Section 20/full and final), and the differences between them.  This post provides examples of scenarios where an argument can be made for a Section 20 settlement.

There are two ways to settle a workers’ compensation claim in New Jersey. Most cases in New Jersey settle under N.J.S.A. 34:15-22 (known as an Order Approving Settlement) with a specific percentage of disability. In this case, the employee retains right to reopen for future benefits and receives a percentage award which is paid over a certain number of weeks corresponding with the level of disability.  The higher the disability percentage, the more weeks that are paid.

Section 20 settlements are quite different.  First, the Award is paid in a lump sum settlement. This is a full and final settlement of the case and it can never be reopened. A case settling pursuant to a Section 20 settlement must present a disputed issue of, liability, causation, jurisdiction, or dependency.  Without one of these issues, there is no legal basis for a Section 20.

Issue of Liability: An issue of “liability” generally refers to a disputed employment issue (such as an off-premises injury) or a dispute regarding the existence of permanency.  N.J.S.A. 34:15-36 states that in order to demonstrate permanent disability, a petitioner must prove, via objective medical evidence of an impairment (diagnostic studies) which restricts the function of the body.  If the respondent can make a serious argument that there really is no permanent disability, then many judges will permit a Section 20 settlement.

In addition to proving an impairment, the petitioner must show also that the impairment is disabling.  Disability is broader than impairment.  It requires that the petitioner must also prove that he or she has a lessening to a material degree of working ability or a substantial impact on non-work activities.

Other bases for a Section 20 on the issue of liability are lack of timely notice under N.J.S.A. 34:15-17 or failure to comply with the Statute of Limitations under N.J.S.A 34:15-51.

Issue of Causation: An issue of “causation” generally refers to a disputed medical issue.

Case study/Example 1: Petitioner injures her left knee at work on January 1, 2020. Her post-accident MRI of February 15, 2020 is normal. She then has a subsequent non-work accident on March 1, 2020. An MRI of April 1, 2020 reveals an anterior cruciate ligament tear and a meniscal tear. We would argue that due to the March 1, 2020 subsequent accident which obviously caused new diagnostic findings, this case is appropriate for a Section 20 settlement. This example is similar to the case of Costanzo v. Meridian Rehab, A-5547-18 (App. Div. June 17, 2021), handled by our partner Carla Aldarelli. This case was discussed in our blog article entitled Respondent Prevails Where First MRI Post-Accident Showed No Abnormalities In Knee.

Case Study/Example 2: Petitioner injures her left knee at work on January 1, 2020. Her post-accident MRI of February 15, 2020 reveals an anterior cruciate ligament tear and a meniscal tear. During Respondent’s investigation, it is revealed that petitioner had a prior left knee injury of June 15, 2019 and on August 15, 2019, petitioner underwent a left knee MRI which also revealed an anterior cruciate ligament tear and a meniscal tear. We would argue that since the January 1, 2020 accident did not cause any new diagnostic findings, any disability is related to the prior June 15, 2019 accident, making this case proper for a Section 20 settlement.

Case Study/Example 3: Petitioner injures her left knee on January 1, 2020. On January 1, 2021, she receives an Order Approving Settlement for 15% of the leg from this January 1, 2020 accident. She re-opens her case on June 1, 2021. On May 1, 2021, she had a new left knee injury with a new employer for which she underwent treatment including a series of injections. She had no new treatment for the January 1, 2020 claim after filing her Re-opener. On the Re-opener, we would argue that the May 1, 2021 incident cuts off causation from the initial January 1, 2020 work accident, and the Re-opener should now be settled pursuant to Section 20.

Case Study/Example 4: Petitioner injures her left knee on January 1, 2020. On January 1, 2021, she receives an Order Approving Settlement for 15% of the leg from this January 1, 2020 accident. She re-opens her case on June 1, 2021. On May 1, 2021, she had a new and minor left knee injury with a new employer. The first employer for the January 1, 2020 accident agrees to provide all treatment following the reopener date, and the second employer pays no medical and temporary disability benefits because its incident was very minor.  A petition is filed against the second employer. The employer for the May 1, 2021 incident will likely argue for a Section 20 dismissal.  Most likely, the employer for the original January 1, 2020 re-opened claim will have to resolve the case on an Order Approving Settlement.

Issue of Jurisdiction: As a general matter, there are three principal ways in which jurisdiction in New Jersey may be found:

1.         When the contract of hire is in New Jersey;

2.         When the accident occurs in New Jersey;

3.         When a substantial amount of employment for the respondent occurs in New Jersey.

There are instances where jurisdiction may be found in more than one state. This is allowed, so long as there is not a duplication of benefits between the two states (medical, TTD, permanency). So an employee may receive temporary disability benefits and medical benefits in another state like New York but apply for partial permanent disability benefits in New Jersey if the injury, hire, or work occurred in New Jersey.

Marconi v. United Airlines, 460 N.J. Super. 330 (App. Div. 2019) holds that localization of the employer in New Jersey and residency of the petitioner in New Jersey was not sufficient to warrant New Jersey jurisdiction where the petitioner worked almost exclusively in Pennsylvania and was injured in Pennsylvania.  Petitioner argued that since United Airlines had a hub in Newark Airport (although petitioner worked in Pennsylvania) and petitioner also lived in New Jersey, those facts should be enough for jurisdiction. The Appellate Division disagreed.  Our partner, Prudence Higbee, prevailed in this matter for United Airlines. More details about this case may be found in our blog article entitled United Airlines Wins Important Appellate Decision Involving Jurisdiction.

Issue of Dependency:

If it is determined that the work accident was not the cause of death, ultimately, we would argue that nothing except funeral costs are owed. However, in certain situations, a small Section 20 settlement/Award may be offered, in order to close the case.

If it is determined that an alleged dependent is not a valid dependent under Section 13, we would argue that nothing is owed. However, in certain situations, a small Section 20 settlement/Award may be offered, in order to close the case.

Miscellaneous Issues

Finally, there are also some “miscellaneous” considerations when determining if a Section 20 settlement is feasible. First, all Section 20 settlements are subject to petitioner’s, petitioner’s attorney’s, and the Judge’s approval.

Second, practitioners should keep in mind that legal fees are quite different between a Section 20 and an Order Approving Settlement. In Orders Approving Settlement, petitioner’s attorney’s fee (which is 20% of the overall Award) is paid 60% by Respondent and 40% by petitioner. For petitioner’s permanency exam, Respondent pays 50%; petitioner pays 50% (generally $300 each) In a Section 20 Order, petitioner pays 100% of his or her attorney’s fee.

Case Study/Example 1: Petitioner receives an Award for 15% partial total at 2021 rates, or 90 weeks at a rate of $258.00 per week, totaling $23,220.00. Petitioner’s attorney’s fee is $4,644. Of this, Respondent pays $2,786.40 and petitioner pays $1,857.60 (this may be rounded to the nearest dollar and rounded up for Respondent and rounded down for petitioner). Respondent and petitioner each pay $300 for petitioner’s expert. Ultimately, petitioner nets $21,062.40 and retains re-opener rights.

Case Study/Example 2: Petitioner receives a Section 20 Award of $27,500. Petitioner is solely responsible for his attorney’s fee of $5,500 out of his Award; he also pays the full $600 for his report. Ultimately, petitioner nets $21,400 and does not retain re-opener rights.

One disadvantage of a Section 20 is that payments are not lienable when there is a third party recovery unless both parties specifically agree on the record to make such payments lienable. This is quite different from an Order Approving Settlement where the entire permanency payment may be lienable if the third party amount is higher than the amount of the permanency award.

More than two thirds of settlements in New Jersey resolve on an Order Approving Settlement.  The reason is that in many accidents there simply is no legal basis for a Section 20 settlement.  The advantages of a Section 20 settlement are that the case is closed in a lump sum payment (unlike payments over many weeks for an Order Approving Settlement), there is no admission of liability and there is no potential for a reopener.  But there must be a disputed issue of, liability, causation, jurisdiction, or dependency to argue for a Section 20 settlement.

-------------------------------

Maura Burk, Esq., is a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Ms. Burk concentrates her practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation matters.  If you have any questions or would like more information, please contact Ms. Burk at 856.840.4941 or by e‑mail at mburk@capehart.com.

By:  Jeannette Herrera (Partner - Sacramento)

On June 29, 2022, the Senate Committee on Labor, Public Employment and Retirement voted 4 to 1 to pass Assembly Bill 1751, which extends the COVID-19 presumptions through January 1, 2025 for specified first responders and when there is an outbreak.  AB 1751 has now been re-referred to the Appropriations Committee.  Senate Bill 1159 initially enacted these presumptions.     

California Assembly Member Tom Daly (Anaheim) first introduced AB 1751 on February 1, 2022. 

SB 1159, enacted in September of 2020, created within the Labor Code a rebuttable presumption for COVID-19 illnesses contracted before July 5, 2020 (§ 3212.86), for specified peace officers and firefighters (§ 3212.87), and during an outbreak (§ 3212.88). AB 1751 would amend the expiration date of these Labor Code sections from January 1, 2023 to January 1, 2025.

Proposed AB 1751 would do nothing more than extend the expiration date of these sections by two years. Specifically, there are no other amendments other than to replace "2023" with "2025" in these three sections.

Like SB 1159, AB 1751 would place the burden on California employers to prove that specified employees did not contract COVID-19 at work. These presumptions can be disputed by, among other things, evidence of employer measures in place to reduce the risk of COVID-19 transmission and by evidence of an employee’s non-occupational risk of COVID-19 infection. The bill will go back to appropriations and then to the Senate floor before a final vote.

Learn more here:  https://highlights.hannabrophy.com/post/102hs6b/ab-1751-passes-in-committee-to-extend-covid-19-workers-compensation-presumptions

Written by: John Tomei

In these challenging economic times, which include inflation and rising costs of workers’ compensation coverage, one way employers can reduce their workers compensation insurance coverage costs is to request the inclusion in their policies of deductible provisions. In addition to premium cost savings, deductible plans can improve employers’ cash flow, provide increased tax deductions, and allow for more control over workers’ compensation costs.

An excellent source of information regarding workers’ compensation insurance deductibles can be found in the North Carolina Rate Bureau’s North Carolina Workers Compensation Basic Manual, particularly in Rule 5 – Policy and Endorsements, sections of which are referenced in italics below. Rule 5 – Policy and Endorsements of the North Carolina Workers Compensation Basic Manual

In North Carolina, each insurer transacting or offering to transact workers’ compensation insurance in North Carolina may offer deductibles to employers.  Deductible coverage is affected by attaching the Benefits Deductible Endorsement, WC 00 06 03 to the policy. However, it is important to know that an insurer is not required to offer a deductible to an employer.

To the extent an insurer is agreeable to offering a deductible to an employer, deductibles may be available for total combined medical and indemnity benefits in amounts of $100, $200, $300, $400, $500, $1,000, $1,500, $2,000, $2,500, and $5,000 per claim. A selected deductible applies on a per claim basis.  More specifically, the deductible must apply separately to each claim for bodily injury by accident or disease.

A deductible does not affect the claims adjustment process. If a claim occurs, the insurer will investigate the injury, pay providers for medical treatment, and make disability payments to eligible workers. The insurer will then bill the employer for the deductible portion of the claim.  As noted in the Manual, the claim is first paid by the insurer, which will then be reimbursed by the employer for any deductible amounts paid by the insurer.  The employer is liable for reimbursement up to the limit of the deductible chosen.  The payment or nonpayment of deductible amounts by the employer to the insurer is treated under the policy insuring the liability for workers’ compensation in the same manner as payment or nonpayment of premiums.

The applicable loss elimination ratio (LER) represents the percentage of losses removed when an employer is responsible for losses up to the deductible amount. LERs vary by deductible amount and hazard group.  As one might expect, the LER is a key variable used in determining the policy premium credit.

So, the good news for employers in North Carolina is that deductibles are permissible, with varied amounts, on a per claim basis. The insurer pays the claim, and then seeks payment of its deductible from the employer thereafter. If the employer does not repay the insurer for the deductible amount paid by the insurer, then it is treated as non-payment of a premium. Understandably, the amount of the deductible has an impact on the loss elimination ratio (LER), which is used to calculate the policy premium credit.

Simon Law Group, P.C.

720 Olive Street, Suite 1720, St. Louis, MO 63101

314-621-2828

MISSOURI WORKERS’ COMPENSATION CASE LAW UPDATE

April 2022 – June 2022

Knee Injury Sustained While Turning Not Compensable as Equally Exposed to Risk in Normal Non-employment Life

Overstreet v. Tamko Building Products, Inc. and Ace American Insurance Company, Case No. SD37171 (Mo. App. 2022)

FACTS:  The claimant worked as an asphalt plant operator for the employer. On the date of injury, he saw a truck arrive and began walking on the asphalt path to the load station when he realized he had forgotten his card to access the load station. He planted his foot to turn right, turned around to retrieve his card and heard a “pop” and felt tearing in his left knee. When he was seen at the hospital, he reported that he was “in a hurry and was walking very fast when he suddenly switched directions”. In both his deposition and hearing testimony, he stated that the area where he was walking on the date of injury was not out of the ordinary, not wet, not slick and the area was lit. He also claimed that he was walking “downhill” or “across a decline” or a “slope” when his knee popped. However, he did not indicate that the slope was a contributing factor to his knee popping. He also noted that although there were cracks in the area where he was walking, he could not be sure if he stepped on a crack. The claimant’s supervisor also testified that there were no other employees that had issues in this area due to any issues with the ground. Dr. Koprivica testified on behalf of the claimant and opined that the incident was the prevailing factor in causing his condition.

The ALJ found that the claimant did not sustain a compensable injury arising out of and in the course and scope of his employment because the risk source, walking on asphalt and changing directions was a risk to which the claimant was equally exposed to outside of his employment. The claimant appealed and the Commission affirmed. The claimant again appealed.

HOLDING: The Court noted that it is not enough that a claimant’s injury occurs at work or even while engaged in a work-related activity. To show causal connection between the injury and work, the risk involved must be one to which the worker would not have been equally exposed in his non-employment life. The Court found the claimant failed to meet his burden as he acknowledged that in his normal non-employment life, he often walks and changes directions. Also, the asphalt lot was not dissimilar from numerous other asphalt lots in his community which had similar cracks, unevenness and slopes. Therefore, the Commission’s denial of benefits was affirmed.

Injury Compensable as Claimant Not Exposed to Twisting in Tight Space and  Working at Fast Pace Outside Of Work in Non-employment Life

Durr v. Clarks Mountain Nursing Center, Americare Systems, Inc. and Safety National Casualty Company, Case No. SD37212 (Mo. App. 2022)

FACTS: The claimant worked as a CNA for the employer. On March 5, 2015, she was performing one of her job duties which included freshening each resident’s pitcher with water and ice. She took the pitcher from the resident’s room out to the cart which remained in the hallway for sanitary purposes and brought the pitcher back into the resident. There was testimony this was performed at a “very quick pace” as there was only one water/ice cart provided by the employer and this was to be shared with the other three §s.

In order to access this particular resident’s pitcher on the bedside table, she had to step sideways through a narrow space between the bed and the wall and then to exit the space she had to pivot to her right to get out of the room. On her date of injury, the top of her left leg went with her body and the bottom of her left leg stuck resulting in a twisting motion of the knee. Ultimately the claimant underwent surgery on her own.

The ALJ concluded that the claimant’s injury was compensable as the injury to her left knee did not come from a hazard or risk unrelated to her employment to which she would have been equally exposed to in her normal non-employment life. The ALJ found that passing out ice required the claimant to move about in a tight, narrow space between the resident’s bed and the wall to deliver fresh water and ice. Furthermore, the claimant was wearing the recommended non-skid shoes while navigating this tight space and that non-skid shoe stuck to the floor causing a twisting injury to the left knee.

The Commission reversed the decision of the ALJ. It found that testimony showed there was no time limit for passing out ice and the claimant was not required to wear closed-toed, non-skid shoes. The Commission noted she would be equally exposed to twisting in her normal non-employment life. The claimant appealed.

HOLDING: The Court of Appeals reversed the decision of the Commission and noted that the claimant’s injury arose out of the particularized working conditions and work requirements of the job. It noted for this particular resident, the employer placed the bedside table in the one-foot gap between the wall and the bed so that his wheelchair would not bump into the bedside table. Also, it was the employer’s preference that the claimant wear closed-toed non-skid shoes and it was part of the claimant’s job duties to fill water pitchers in an expedient fashion which required her to navigate the one-foot gap in a dark room and to pivot between facing forward and backward within that confined area. In light of this, it was determined that the claimant was not equally exposed to this same risk in her normal non-employment life and the decision of the Commission was reversed and remanded for an entry of an Award consistent with the Award of the ALJ.

Sitting in Parked Vehicle on Public Street is Noncompensable as a Risk Source of Injury for Which the Public is Equally Exposed

Flemons v. Land of Oz Academy and FirstComp Insurance Company, Injury No. 17-003266

FACTS: Claimant and his wife owned a child care center, Land of Oz, the employer. The claimant and his wife would eat lunch while sitting in employer’s vehicle parked on Kingshighway while working for employer. While eating lunch, they discussed business activities. Although there is a staff lounge inside employer’s building, they prefer to eat in the truck for privacy and avoid phone calls for employee questions during the lunch hour. During lunch, they were rear ended by a vehicle traveling on Kingshighway and sustained injury. The ALJ found that claimant’s injury was not in the course and scope of employment.

HOLDING: The Commission affirmed the Judge’s denial of compensation. The risk source of cliamant’s injury was not work related or related to a risk to which the employee was not equally exposed. The claimant was not placed in an unsafe location due to his employment but chose to eat lunch in the parking lane of Kingshighway rather than the available conference room and office space inside employer’s location. The risk source is the immediate cause of the injury. In this case, discussing business was not the risk source causing the injury. Instead, the risk source was being lcoated in the parking lane of a busy thorogouhfare. Parking on Kingshighway Boulevard was a risk freely available to the public.

Claimant Must Show a Causal Link Between Work Activities and New Alleged Injury After Prior Settlement For Fusion Surgery

Toska v. American Pulverizer, Injury No. 17-075220

FACTS: Claimant started working for employer in 2006. In March 2009, claimant sustained a work injury and had severe pain in his low back and left leg. In September 2009, the claimant underwent surgery at L4-5 by Dr. deGrange but continued to have pain. In August 2011, he underwent a fusion at L4-5 by Dr. Kitchens. The fusion helped claimant’s pain in his back and he no longer had pain in his leg. The 2009 injury settled for 30% of the body.

When claimant returned to work following the fusion, he had pain “all of the time” but was able to fully perform his job. On cross-examination, claimant admitted he was still having pain after his August 2011 surgery, but did not tell anyone he needed to see a doctor. On Septmeber 9, 2017, the claimant went to the ER and reported that over the last two months, his low back pain redeveloped and was worse everyday. Although he did not recall an injury, he reported his work activities exacerbated his back pain. He saw Dr. Kitchens on September 10, 2017 and underwent surgery the next day. Dr. Kitchens performed a revision of the hardware at L4-5 and a L3-4 decompressive laminectomy, discectomy and fusion.

The claimant’s expert, Dr. Volarich testified that the claimant had been able to perform all of his usual duties at work following his 2011 surgery until September 8, 2017. He opined that the heavy lifting the claimant performed for the employer was the prevailing factor causing his severe increase in back and leg pain. He testified that heavy lifting, moving in awkward positions and twisting would lead to a herniation above the level of the previous fusion. He found 35% PPD for the prior 2009 injury and additional 35% PPD to the back for the 2017 injury and concluded claimant was permanently and totally disabled as a result of his 2009 and 2017 back injuries.

On cross-examination, Dr. Volarich admitted the claimant did not report an accident occuring on September 8, 2017 but did report an accident in July 2017. He admitted it was not unusual for adjacent levels to break down after a spinal fusion. He also conceeded a disc herniation can occur spontaneously and more likely in someone with preexisting degernative disc disease.

Dr. Kitchen testified for the employer. He said the claimant was returned to work with no restrictions after his fusion surgery for the 2009 work injury. He then saw the claimant on Septmeber 10, 2017, after the ER visit. The claimant gave a history of pain for a couple of months that had worsened over a couple of days before he went to the ER. The claimant did not give an indication to Dr. Kitchen that his back pain was related to work activities.

Dr. Kitchens further testified the claimant sustained a large disc herniation at L3-4 and given the size, he would not expect a person to be able to perform heavy job duties. He stated that the claimant would not have been able to work a full shift on Friday, September 8, 2017 given the amount of pain he was in on September 10, 2017.

Dr. Kitchens opined that the actual herniation is an acute event. A disc herniation has to be linked in time to a particular activity in order to be medically casually linked to that activity. He opined the claimant had a spontaneous herniation due to age related degeneration.

HOLDING: The ALJ found that claimant failed to prove by medical evidence that there was a causal link between his new back injury and some distinct feature of his job duties for the employer and therefore, the claim was denied. The Commission affirmed the decision.

Claimant Must Prove Work is More Likely Than Not the Prevailing Factor of Carpal Tunnel and Not One of Several Factors Such as Age and Prediabetes

Nevois v. Meramac Industries, Injury No. 19-078979

FACTS: The claimant was a 56 year old factory worker who developed carpal tunnel syndrome. His first position for the employer was as a packer for six years. Then, the claimant worked for 2-3 months as a taper. In July 2019, he began a machine operator job for employer and worked 30 days in late July and August.

The claimant had preexisting medical conditions of obesity (BMI 35-39), smoking addiction and prediabetes. The claimant did not experience any hand complaints while working as a packer or taper but reported complaints after 2-3 weeks as a machine operator.

Employer’s medical expert testified that 2 weeks as a machine operator was not long enough exposure to cause carpal tunnel, even if the clamps on the machine required significant force to close. He noted that there is a correlation between BMI’s over 30 and the development of carpal tunnel syndrome. The doctor opined that the claimant’s work as a machine operator did not accelerate or cause the carpal tunnel syndrome to manifest. He also opined that older age was a causative factor.

The claimant’s medical expert testified that the claimant’s repetitive work with his hands for the employer, in particualr, the machine operater position, which required repetitive and forceful closing of clamps, was the prevailing factor causing the carpal tunnel syndrome and need for treatment. The doctor did not have an opinion as to whether the claimant’s obesity was a contributing factor, but stated it was not the prevailing factor causing the carpal tunnel syndrome. However, he was uncertain whether prediabetes could cause the condition.

HOLDING: The Judge denied the claim. He noted that the burden of proof for compensation is on the claimant and he did not prove more likely than not that work was the prevailing factor causing his medical condition and disability. The experts in the case were evenly divided and neither was overwhelming. Based on the evidence, the judge concluded that the cause of the claimant’s carpal tunnel syndrome was multifactorial, including obesity, prediabetes and claimant’s hand intensive job for 30 days and all appear to be substantial factors. The claimant’s work as a machine operator may have been a triggering factor but none of the factors were more important than the other factors. The Commission affirmed the judge’s decision.

The Employer and Insurer on the Day of Last Exposure Prior to the Date of Injury are Liable for the Toxic Exposure; Also, Date of Injury is Date of Diagnosis

French (deceased) v. Bill’s Truck Repair and the Larson Group, Inc. d/b/a MidAmerica Peterbuilt and Bloomington Compensation Insurance Group, Missouri Employer’s Mutual Insurance Company and Standard Fire Insurance Company, Injury No. 14-080361

FACTS: The employee worked as a diesel mechanic at Bill’s from 1989 to 2006. He began working as a diesel mechanic at MidAmerica in July 2006. He last physically worked at MidAmerica on October 1, 2014.

In September 2014, the employee began to experience leg pain. Ultrasounds revealed blood clots in both legs and employee was prescribed medication and special hosiery. On September 30, 2014, the employee returned to the doctor for difficulties with memory and controlling his emotions. On October 1, 2014, after working at MidAmerica for four hours, employee left work and went directly to the hospital and was admitted for a TIA. He suffered a second stroke on October 4, 2014 and on October 7, 2014, a biopsy revealed stage III. B adenocarcinoma of the lung with metastasis. The employee underwent treatment including chemotherapy for his lung cancer and other cancer related conditions. He ultimately passed away on July 24, 2015 of a stroke as a consequence of underlying metastatic lung cancer.

Prior to October 1, 2014, the employee worked full time and had not been diagnosed with lung cancer.

The claimant’s medical expert opined that the claimant’s employment as a diesel mechanic caused his exposure to diesel fumes which led to the development of the lung cancer from which the employee ultimately died. The employers and insurers did not present contrary evidence. The ALJ found that the employer, MidAmerica and their insurer, Standard Fire Insurance Company liable for the medical care, TTD, death benefits and funeral expenses.

HOLDING: The Commission affirmed the ALJ’s decision. Based on the standard set forth in

§287.063.3 RSMO 2005, “the moment it becomes reasonably discoverable and apparent that an injury has been sustained related to such exposure, is the date of injury in an occupational disease. As such, the date of injury for the employee was October 1, 2014.” The employee was last exposed to diesel fumes that caused his death from lung cancer on October 1, 2014. Therefore, the employer, MidAmerica, is liable for the death of employee. The Workers’ Compensation carrier for MidAmerica as of October 1, 2014, was Standard. Therefore, Standard is the liable carrier.  

A Preexisting Non-Compensable Injury Does Not Qualify as a Preexisting Condition Under the Statute for Fund Liability if it is Unrelated and Does Not Aggravate or Accelerate the Primary Injury

Schebaum v. Treasurer of the State of Missouri / Custodian of the Second Injury Fund, Case No. WD84765 (Mo. App. 2022)

FACTS: The claimant became deaf in both ears as a child. Many years later, he sustained a compensable work injury to his right knee in 2007 and settled with the employer for 45% PPD of the right knee. In January 2014, the claimant sustained a new compensable work injury to his knee and was unable to work thereafter due to the physical nature of the job. He settled with the employer for the 2014 injury for 25% PPD of the left knee but left his claim open against the Second Injury Fund for permanent total disability.

At the Hearing, both medical experts testified by deposition that the claimant was permanently and totally disabled as a result of the prior right knee disability and his hearing loss together in combination with the disability from the primary injury to his left knee. The claimant’s vocational expert did testify at the Hearing that the claimant’s permanent total disability was the result of only his prior right knee injury combined with the primary injury to his left knee. However, the vocational expert’s testimony was inconsistent with his opinions stated in his written reports and his testimony was found not to be credible. The Commission determined that the claimant had not established Fund liability for permanent total disability based on the credible evidence in the record.

HOLDING: The Court affirmed the Commission’s decision. Under §287.220.3, the hearing loss failed to meet the three criteria necessary to establish a permanent total disability claim against the Fund as required by the statute. Although the hearing loss exceeded the 50 week minimum threshold and was not a compensable injury, the preexisting hearing loss was unrelated and did not aggravate or accelerate claimant’s subsequent work related injury (his 2014 left knee injury) and therefore, the Commission properly disregarded the hearing loss when determining whether the claimant established a compensable PTD claim against the Fund.

The Court further agreed that by disregarding the nonqualifying hearing loss, the Commission was correct in finding no credible medical evidence in the record that the prior right knee injury alone, when combined with the current 2014 left knee injury rendered claimant permanently and totally disabled. Therefore, there was no PTD Fund liability.

Only Qualifying Pre-existing Conditions Can be Considered When Determining Fund Liability; Also Life Factors Can be Considered in Determining PTD

Klecka v. Treasurer of Missouri as Custodian of Second Injury Fund, Case No. SC99280 (Mo. App. 2022)

FACTS: In April of 2014, the claimant sustained a compensable injury to his left shoulder and settled with the employer for 35% of the shoulder and 21.5% of the body referable to depression as a result of the work injury. He then filed for perm total disability against the Fund alleging five separate injuries, a traumatic brain injury in 1981, a left knee surgery in 1982, an work related injury to the right thumb in 2005 which settled for 15% disability, a work-related hernia in 2006 which settled for 7.5% of the body and a 2007 work-related right shoulder injury which settled for 35% of the shoulder. Dr. Volarich and Ms. Gonzalez testified on behalf of the claimant who concluded that the claimant was PTD as a result of the work injury and all of his pre-existing medical conditions. The ALJ found that the Fund was responsible for PTD benefits. The Fund appealed arguing that the ALJ errored as the ALJ was limited to considering the claimant’s qualifying pre-existing disabilities of at least 50 weeks and only his right shoulder injury met that threshold. The Commission agreed and reversed the decision of the ALJ finding that the Fund was not responsible for benefits. The claimant appealed.

HOLDING: The Court found that the claimant’s experts’ opinions that he was PTD were not sufficient to show that he was entitled to Fund benefits as their testimony considered non-qualifying pre-existing disabilities in their PTD analysis. The Court noted that there was no evidence that the claimant’s primary injury combined with his one qualifying pre-existing disability resulted in PTD. However, the Court did note that the statute does not prohibit the consideration of other “life factors”, including but not limited to those discussed by the claimant including age, education, transferable skills and physical appearance. The Court noted that it was not clear from the record as to whether the Commission considered these factors but did note that it is proper to do so under the statute. Therefore, the Commission’s decision denying benefits from the Fund was affirmed.

Under Strict Construction, No Temporary Benefits Are Payable After Termination for Positive Drug Test After Primary Injury; Also Work Accident Must Cause Mental Injury to be Compensable

Crowley v. Clarcor/General Electric, Injury No. 14-101480

FACTS: The claimant filed a claim for alleged mental injury and physical injury to her hands and wrist due to carpal tunnel syndrome from repetitive trauma. After reporting in October 2014 that she thought her carpal tunnel symptoms were work related, she was moved to a light duty position. On November 19, 2014, the claimant reported an injury to her left wrist while pulling tape off a gasket. The employer’s policies included drug testing after acute injuries. The claimant was told to reveal any prescriptions she was taking and to supply pertinent medical records. She did not. The claimant tested positive for both methamphetamines and amphetamines. The results of a second test on the same sample by a different lab were the same. Based on the positive drug test, the claimant was terminated under employer’s drug policy.

In his Temporary Award, the Judge found the claimant was unable to compete in the open labor market since November 21, 2014 and awarded back TTD and additional TTD. He also found that the drug test had no significance because it was almost certainly a “false positive” due to claimant’s use of prescription Bupropion (Wellbutrin) for depression.

At the Final Hearing, there was testimony from a board-certified toxicologist that Bupropion can cause a “false positive” on the initial screening test but not on the subsequent confirmation test. The claimant submitted a report from a non-certified toxicologist, but it failed to explain why the claimant tested positive for both amphetamines and methamphetamines in the subsequent confirmation test.

The employer’s medical expert testified the claimant’s depression developed before 2008 and preceded any carpal tunnel complaints. The claimant’s expert testified that the claimant’s depression “correlated” with her carpal tunnel symptoms and was, therefore, the prevailing factor in causing the depression.

HOLDING: In the final Award, the Judge found the certified toxicologist more persuasive and that the employer had administered their policy relating to drug use appropriately. She found the claimant was terminated for post injury misconduct. She stated that with strict construction, when an employee is terminated for post injury misconduct, under §287.170.4, no temporary disability benefits are payable. As a result, neither TTD nor PTD were payable and the employer was entitled to a credit for the TTD paid in compliance with the Temporary Award.

Since the Judge found that the claimant was terminated based on post injury misconduct, the Final Award was not in accordance with the Temporary Award and the doubling of compensation provision of §287.510 does not apply. The claimant is not entitled to costs and legal fees under §287.560 as the employer did not unreasonably defend the claim leading to the Temporary Award.

Lastly, since the claimant did not allege a specific accident with regard to mental injury, she must prove her mental injury flows from her physical injury/the bilateral carpal tunnel syndrome. Under §287.120.9, if mental injury results from disciplinary action or termination, it is not compensable. The Judge found that the claimant did not meet her burden to prove her depression arose out of employment as a result of her carpal tunnel. The claimant’s expert opinion was not convincing. Just because one condition occurs at the same time as the other, it does not mean the conditions are causative of each other.

The Commission affirmed the ALJ’s Decision noting that the term “post injury misconduct” refers to misconduct after the primary workers’ compensation injury, in this case, the carpal tunnel and not the claimant’s November 19, 2014 acute injury. Therefore, the employer terminated the claimant post injury employment due to post injury misconduct and the claimant is not entitled to TTD due to strict construction of §287.170.4.

Court Undecided if Prior Employee Has Standing Under the Statute for Retaliation Claim for Refusal to Rehire

Lisle v. Meyer Electric Co., Inc., Case No. WD84620 (Mo. App. 2022)

FACTS: On April 27 and May 2, 2018, the employee, Lisle, asked his foreman to fill out an injury report because he was suffering from carpal tunnel. In response to his second request, the forearm told the employee that if he asked for an injury report, the employer would lay him off. On May 2, 2018, the employer’s president learned that the employee wanted to file an injury report and workers’ compensation claim. The next day, he terminated the employee.

On May 14, 2018, the employee filed a workers’ compensation claim and a lawsuit against the employer for termination in retaliation for exercising his rights under the Workers’ Compensation Law in violation of §287.780.

A year later, the employer posted a job opening and the employee expressed interest with the union which provided a referral. In a phone call, the foreman told the employee he would probably hire him back, but later that day, texted him that the employer’s president would not hire him back. The employer acknowledged that pursuant to an agreement with the union, the employee has priority over the other applicant who was hired.

The employee filed a second lawsuit against the employer alleging retaliation for exercising rights under the Workers’ Compensation Law in violation of §287.780. The employer filed a Motion for Summary Judgement which argued that because §287.780 provides a cause of action to “any employee” who has been discharged or discriminated against by his or her employer did not provide a cause of action for the claimant because he was not an employee when the employer refused to rehire him. The Court agreed and entered a Summary Judgement for employer.

HOLDING:  The Court stated that because §287.780 must be strictly construed, it concluded that the statute does not authorize a claim for retaliation based on acts that occur after any employment relationship has ended. However, because of the general interest and importance of the legal issue of first impression presented by this case, the Court did not rule on this appeal and instead, ordered a transfer to the Missouri Supreme Court.

The Court discusses employee’s argument that “employee” as used in §287.780 was not meant to be limited to current employees because there are other places where Chapter 287 uses “employee” for former employees to recover benefits for a workplace injury occurring during an existing employment relationship. Likewise, a claim for retaliatory discrimination under §287.780 also depends inherently on acts that occurred during an employment relationship.

The potential chilling effect of post-employment retaliation on a former employee’s willingness to exercise rights under the workers’ compensation law presents an important policy concern. On the other hand, if §287.780 is constructed to expose an employer to claims of retaliation based on conduct after an employment relationship has ended, the exposure would be perpetual and could have a potential chilling effect on the former employer’s willingness and ability to defend against workers’ compensation claims.

Commission’s Authority to Assess Costs Against a Party is Discretionary

Donnell v. Trans State Airlines and Insurance Co. of The State of Pennsylvania, Case No. ED110126 (Mo. App. 2022)

FACTS: Following the Hearing in August 2011, the ALJ awarded claimant TTD, PTD and future medical treatment. In December 2014, the claimant moved to commute her permanent total disability benefits. The employer objected to the Motion to Commute, requested a hearing and argued a new IME is permitted under §287.210.1. In 2015, the Commission used an Order remanding the case for an Evidentiary Hearing on the Motion. A year later, the claimant moved for the Commission to reconsider their 2015 Order, but the Commission issued a new Order in 2016 declining to reconsider their prior Order.

Five years later, the ALJ conducted the Remand Hearing. The ALJ submitted the findings and the Commission issued its final decision. The Commission denied claimant’s request to commute her PTD benefits, but they did commute claimant’s Award for future medical treatment because they found employer had failed to comply with the Final Award by discontinuing claimant’s coverage for medical treatment when she filed her Motion to Commute. However, the Commission expressly denied an award for costs, including attorney’s fees and other expenses, against either party under §287.560. The claimant appealed.

HOLDING: The Court affirmed the Commission’s decision. While §287.560 provides that the Commission may assess the cost of a proceeding against a party who brought prosecuted or defended the proceedings on unreasonable grounds, neither the statutory language nor caselaw compels such an Award. The Appellate Courts have cautioned the Commission to exercise their discretionary statutory power with great caution and only when the case for cost is clear and the offense egregious. Based on the evidence presented at the Remand Hearing, the Commission concluded that the delay was the result of “unreasonably antagonistic conduct” by both parties, and accordingly did not assess cost against either party. Because the Commission did not exercise its discretion to award costs, the Appellate Court’s standard of review is limited to an abuse of discretion.  The Court held that the Commission did not abuse its discretion but carefully considered the issue.

Medical Provider Not Entitled to Prejudgment Interest Under Statute

Surgery Center Partners, LLC D/B/A Timberlake Surgery v. Mondelez International, Inc. Case No. ED109776 (Mo. App. 2022)

FACTS: Employee suffered a work-related accident and sustained a torn rotator cuff. Employer’s Workers’ Compensation insurance carrier authorized surgery at Timberlake Surgery.

Thereafter, Timberlake filed an Application for Payment of Additional Reimbursement of Medical Fees with the Division of Workers’ Compensation but in the § of the Application asking for “Date Notice of Dispute Received From Employer/Insurer” they entered “TBD”. The Division accepted the Application and held a Hearing. The ALJ found Timberlake’s charges were fair, reasonable and permissible and did not charge more than allowed under §297.140.3 but was not entitled to additional reimbursement. She also concluded Timberlake was not entitled to prejudgment interest and neither party was entitled to attorney’s fees or costs. She also noted that the Division had jurisdiction and absence of the date regarding the notice of the dispute did not deprive the Division of jurisdiction. The Commission affirmed.

HOLDING: The Court dismissed employer’s appeal for their blatant disregard of Rule 84.04 regarding the requirements for appellate briefs. First and foremost, their brief failed to identify the ruling they challenged, state concisely the legal reasons for their claim of reversable error or explain in summary fashion, in the content of the case, the legal reasons supporting their claim of reversable error. Compliance with Rule 84.04 is mandatory.

The Court also dismissed Timberlake’s cross-appeal arguing that the Commission erroneously denied their request for prejudgment interest under Missouri’s general prejudgment interest statute, §408.20. The Commission had denied the prejudgment interest because under the strict construction of §287.800.1, prejudgment interest cannot be awarded without express statutory language. Nothing in §287.140, which governs Medical Fee Disputes, affirmatively provides a right to prejudgment interest. The Court stated that the statute does not allow the Commission to go beyond the language of the applicable statute to infer authority to award prejudgment interest.

Effective July 1, 2022, the mileage reimbursement rate for Alabama has been increased to 62.5 cents per mile, and 4 cent increase over the first half of 2022.

About the Author

This blog submission was prepared by Charley Drummond, an attorney with Fish Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Mr. Drummond by e-mailing him at cdrummond@fishnelson.com or by calling him directly at (205) 332-3414.

The Alabama Supreme Court recently affirmed summary judgment in favor of Pilgrim’s Pride Corporation and its third-party workers’ compensation administrator, Sedgwick Claims Management entered by the Circuit Court of Franklin County, Alabama in regard to a claim for the tort of outrage brought by Florence King.  King initially asserted a workers’ compensation claim against Pilgrim’s Pride in October 2012, claiming that she suffered injuries to both shoulders and arms as a result of the repetitive nature of her job on Pilgrim’s Pride’s production line.  Although Pilgrim’s Pride disputed the compensability of King’s alleged injuries, it nevertheless provided King with medical treatment, which included surgery on one of her shoulders and pain management.  After King’s doctors determined she had reached maximum medical improvement, the claims adjuster at Sedgwick reached out to King and offered to settle her case as disputed.  King initially accepted the settlement offer, but then changed her mind.  When additional treatment prescribed by King’s treating physicians was not approved, King sued Pilgrim’s Pride for workers’ compensation benefits.  She also sued Pilgrim’s Pride and Sedgwick asserting a claim of outrage, for what she claimed was intentional infliction of emotional distress due to a delay in approving medical treatment related to her alleged injuries.  Pilgrim’s Pride denied the allegations of King’s Complaint, asserting that her alleged injuries were not compensable.  The workers’ compensation case proceeded to trial in September 2020.  The parties stipulated that the only issue in dispute at trial was whether King’s alleged injuries were compensable.  King’s orthopedist testified that he did not have a firm conviction as to whether King’s job duties caused or contributed to her alleged injuries.  However, the trial court found King’s alleged injuries compensable.  

Thereafter, both Pilgrim’s Pride and Sedgwick filed motions for summary judgment as to King’s outrage claim.  The defendants asserted that since the compensability of King’s alleged injuries was disputed, they had no duty to provide King with medical treatment until the trial court found those alleged injuries compensable.  The trial court agreed, and entered summary judgment in their favor.  King then appealed to the Supreme Court, and the Court affirmed the trial court’s decision without writing a formal opinion.

My Two Cents

Outrage is an extremely limited cause of action.  In order to prevail on a claim for the tort of outrage, a plaintiff must prove by clear and convincing evidence that the defendant intended to inflict emotional distress and that the defendant’s outrageous and extreme conduct caused emotional distress so severe that no reasonable person could be expected to endure it.  Alabama law has long held that a defendant cannot be liable for the tort of outrage by merely insisting on its legal rights – even if the defendant knows that doing so is likely to cause severe emotional distress.  Alabama law has also long held that it would be a violation of an employer’s right to due process of the law to require it to provide workers’ compensation benefits when there is a bona fide dispute as to the employer’s liability for the injury.  Therefore, the Supreme Court’s decision affirms the fact that an employer (or its insurer) cannot be found guilty of outrageous conduct for denying workers’ compensation benefits when there has been no admission or legal adjudication that the underlying injury is compensable.  

About the Author

 This blog submission was prepared by Charley Drummond, an attorney with Fish Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Mr. Drummond by e-mailing him at cdrummond@fishnelson.com or by calling him directly at (205) 332-3414.