State News

Sheila W. Austin, as admin. of the estate of Rose W. McMillan v.

Providence Hosp. and Sedgwick Claim Management. Services, Inc.

Released March 21, 2014

The deceased employee’s representative appealed Summary Judgment entered by the Mobile Circuit Court in favor of the employer and its claims administrator. The underlying case was based on a breach of contract claim filed by the estate against the employer and administrator. The alleged breach of contract was based on an agreement to settle future medical benefits.

On October 27, 2011, the parties agreed to settle McMillan’s future medical benefits for $75,000.00. However, McMillan was a eligible for Medicare so the parties submitted the Medicare Set-Aside proposal to CMS for approval. On November 29, 2012 CMS determined that of the $75,000.00, $35,951.00 had to be reserved for future medical care and drug expenses. The parties had agreed that the settlement was to be court approved. However, on December 9, 2012, McMillan passed away before the court could approve the settlement. Providence and Sedgwick indicated that the settlement would not be honored because it had not been approved by the court. As a result, Austin filed the breach of contract claim.

The Trial Court entered summary judgment in favor of the employer and administrator based on the exclusivity provision of the Alabama Workers’ Compensation Act. The Trial Court also concluded that the agreement was not valid because it had not been approved and could not be made valid due to the employee’s death. The Trial Court specifically said that because future medical benefits are payable without time limitation any lump sum payment would reduce the benefits available and require court approval.

Austin argued on appeal the agreement to settle was a binding contract and survived the death of McMillan pursuant to §§ 6-5-462 and 6-5-465, Ala. Code 1975. Austin argued that the agreement became unconditional after CMS approved the medicare set-aside proposal and it was not required to be court approved because the settlement exceeded the monetary value of the future medical benefits as determined by CMS. As a result, Austin argued that § 25-5-56, Ala Code 1975, did not require approval of the settlement by the court.

The Court of Civil Appeals did not address Austin’s argument because Austin failed to address the Trial Court’s primary ground for entering summary judgment, the exclusivity provision. The Court of Civil Appeals stated that Austin failed to argue or explain how the subject claim would fall outside of the exclusivity provision. The Court of Civil Appeals stated that because the Trial Court had an alternate basis for granting summary judgment, if the appellant fails to show error as to each basis, the appellant waives any argument on those grounds and this results in an automatic affirmance of the judgment.

My Two Cents:

While the Court of Civil Appeals did not actually rule on Austin’s argument, I find it interesting that they chose to write an opinion pointing out the exclusivity provision and breach of contract. This is the first time I have seen the exclusivity provision and breach of contract mentioned at the same time. The exclusivity provision prevents recovery by any other method, unless provided for under the Act, for injury caused by an on-the-job injury. § 25-5-52, Ala. Code 1975. The question created by this case is, does a breach of contract claim qualify as a claim based on the workers’ compensation injury? The argument could definitely be made that once a valid contract to settle is entered into, that an attempt to recover under the theory of contract is no longer based on the injury itself. This would then fall outside of the exclusivity provision.

In this case it does not appear there was a valid contract to enforce because the parties had agreed to have it approved by the court making the contract contingent upon court approval. Had that not been the case, the fact that the payment was in excess of what CMS determined necessary to cover future medical benefits may have resulted the agreement not being continent upon court approval. § 25-5-56 only requires court approval when settlement is for an amount less that the amount stipulated by the Alabama Workers’ Compensation Act. Therefore, if there had not been a contingency the estate might have succeeded in arguing the exclusivity provision does not apply to a breach of contract claim because the recovery is based on the contract and not the workers’ compensation injury.

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. He is the immediate past chair of the ABA/ TIPS Workers’ Compensation and Employers’ Liability Committee.

Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields.

If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atjholden@fishnelson.com or 205-332-1428.

On March 14, 2014, the Alabama Court of Civil Appeals released its opinion in the case ofMichael Brown v. Dixie Contracting Company and Salter’s Exterminating Company, Inc. In that case, Brown sued Dixie and Salter’s for injuries he allegedly suffered in an automobile accident while working for them. The vehicle that Brown was driving at the time of the accident was owned by the owner of Dixie. Dixie and Salter’s are related companies, as the owner of Dixie was a majority shareholder in Salter’s. The two companies operated out of the same building, and they shared a secretary and receptionist. Salter’s performed termite inspection and extermination services, and Dixie would often repair termite damage discovered through Salter’s inspections. Brown alleged Dixie and Salter’s were essentially the same company, and that his injuries occurred in and arose out of his employment with both defendants. Dixie contended that Brown did not work for Dixie, and Salter’s contended that Brown was an independent contractor.

Brown testified that at the time he was hired, the owner of Dixie never specified whether Brown was being hired as an employee or independent contractor. He also testified that he did not sign a contract with Salter’s or Dixie. Brown testified that he considered himself to be an employee and that his supervisor told what time to be at work and when he could leave. Brown testified that his supervisor would tell him on any given day whether he was to sell pest control services or was to work construction. Brown testified that on some days he would sell pest control services for Salter’s, and on other days, he would perform construction work for Dixie. Brown further testified that when performing inspections for Salter’s, he was instructed to call Dixie if any termite damage was located so that Dixie could quote the repairs. Salter’s payroll records listed Brown as a 1099 "employee" who was to be paid a "draw" against commissions and sales. However, those same records indicated that Brown was actually paid at a flat rate of $80.00 per day for sales work, while he was paid at an hourly rate for construction work he performed for Dixie. Brown’s supervisor testified that he had hired Brown to work for Salter’s as a subcontractor in sales, but that Brown was also an "at will employee" that could be terminated for any reason. He testified that Brown was required to report to work by 8:00 a.m. each day. The defendants produced evidence that Brown was always paid by Salter’s and never by Dixie, and that Brown only performed construction work after the accident. However, Brown’s evidence also established that several other employees performed work for Dixie but were paid by Salter’s.

The trial court found that Brown was an independent contractor of Salter’s and that Brown did not perform any work for Dixie until after the alleged accident occurred. Based on this, the trial court denied workers’ compensation benefits. Brown appealed on the grounds that the trial court’s order did not include adequate findings of fact and conclusions of law, and was not supported by substantial evidence. The Alabama Court of Appeals agreed that the findings of fact and conclusions of law set out by the trial court were insufficient, which allowed them to look to the record in order to determine whether substantial evidence supported the trial court’s determination. The Court of Appeals noted that the primary factor in determining whether a worker is an employee or an independent contractor is whether the purported employer has reserved the right to control the manner in which the worker performs the duties of the work. In order for a worker to be considered an employee, the prospective employer must retain the right to direct not only what shall be done but also how it shall be done. The Court further pointed out that the four factors to be considered in determining whether an "employer" has retained the right of control include: (1) direct evidence demonstrating a right or an exercise of control; (2) the method of payment for services; (3) whether equipment is furnished; and (4) whether the other party has the right to terminate the employment. However, the Court also pointed out that no one fact by itself can create an employer/employee relationship, and that the retention of control necessary to establish such a relationship is determined on a case-by-case basis considering the totality of the evidence.

Based on the evidence, the Court of appeals found that Salter’s controlled nearly every aspect of Brown’s employment. Salter’s controlled whether Brown would perform tasks in pest control sales or construction as Salter’s or Dixie needed. Salter’s controlled the manner in which Brown would be paid for the different jobs he did and capped his weekly pay at $400.00. Salter’s provided the very equipment he was driving at the time of the accident. There was no contract between Brown and his employers that would prevent Brown from quitting his job at any time. Based on the totality of the evidence, the Court found that the trial court’s Order was not supported by substantial evidence, and that Brown was an employee. The case was then remanded to the trial court to determine the amount of workers’ compensation benefits Salter’s owes to Brown.

MY TWO CENTS

Employers need to be aware that paying a contractor via a 1099 as opposed to a W-2 does not necessarily preclude the contractor from recovering workers’ compensation benefits in the event of an injury. As this case demonstrates, if an employer retains the right to set the employee’s schedule, dictates which tasks he is to perform on any given day, provides his equipment, and pays him like a salaried or hourly employee, the contractor will be considered an employee.

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ABOUT THE AUTHOR

This article was written by Charley M. Drummond, Esq. of Fish Nelson, LLC. Fish Nelson is a law firm located in Birmingham, Alabama dedicated to representing employers, self-insured employers, and insurance carriers in workers’ compensation cases and related liability matters. Drummond and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields. If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at cdrummond@fishnelson.com or (205) 332-3414.

MEDIATING THE PENNSYLVANIA WORKERS’ COMPENSATION CLAIM

By Kevin L. Connors, Esquire

Recently attending the ABA Workers’ Compensation Mid-Winter Seminar and Conference, in Chicago, over St. Patrick’s Day no less, and having been a presenter on the panel that addressed “Negotiation and Mediation Techniques:  The Latest Advice, The Latest Literature”, chaired and moderated by the Honorable David Torrey, a Pennsylvania Workers’ Compensation Judge in Pittsburgh, Pennsylvania, of infamous renown to all Pennsylvania Workers’ Compensation practitioners as being a veritable encyclopedia of knowledge concerning workers’ compensation practices, procedures, and training, both nationally and locally, this article will review practical lessons from the ABA panel’s presentation.

Before doing so, it should be noted that this pre-eminent panel consisted of three Workers’ Compensation Judges, the Honorable David Torrey, a Pennsylvania Workers’ Compensation Judge, the Honorable Ellen Lorenzen, a Workers’ Compensation Judge in Tampa, Florida, and Chairman Mike Alvey, chairing the Kentucky Workers’ Compensation Appeal Board.

Claimants were represented on the panel by Richard Johnson, a Workers’ Compensation Practitioner in Chicago, Illinois.

The panel, consisting of veterans of their workers’ compensation systems, provided advice with regard to the successful negotiation of workers’ compensation claims, to include the process of mediating workers’ compensation claims, as well as critiquing the latest thoughts and trends on mediation techniques.

As Pennsylvania practitioners will recognize, mediation has had a growing influence in Pennsylvania since the 1996 adoption of Act 57, allowing parties to settle workers’ compensation claims under Compromise and Release Agreements.

In 2006, the Workers’ Compensation Act was amended, to include provisions for Mandatory Mediation, resulting in mediations being required in all litigated workers’ compensation claims, with the Workers’ Compensation Judge presiding over a litigated workers’ compensation claim being required to refer the Petition being litigated to another Workers’ Compensation Judge, for the Petition to then be mediated, absent the parties proving to the presiding Workers’ Compensation Judge that mediation would be “futile”, with there apparently being some super-secret coded directive issued by authorities reviling disclosure, that “futility”, is/will not be an adequate reason to be excused from Mandatory Mediation.

Obviously, voluntary mediations have also been “in play” since the enactment of Act 57 in 1996, again allowing parties to settle workers’ compensation claims, although voluntary mediations have fallen in disfavor, given the costs associated with the same, with the nascent advent of free mandatory mediations, post-2006, through Bureau dictate.

In the course of enforcing mandatory mediations, the Bureau, in its infinite wisdom, has required all Workers’ Compensation Judges to undergo preliminary training in the skills necessary to mediate workers’ compensation claims, with some degree of success and failure being evidenced across Pennsylvania workers’ compensation judicial benches, as mediations have been embraced by some, and reluctantly undertaken by others.

No less true, mediating litigated cases, whether in the workers’ compensation system, or in any other system, requires a special skill set, and not all possess those skills equally.

As for the panel’s discussion regarding mediating workers’ compensation claims at the ABA Mid-Winter Seminar Conference, there was general agreement among the panel that there are several keys to successful mediations, to include the following:

·         First, both parties must be in agreement that mediation is worthwhile;

·         The litigated claim must be ripe for mediation;

·         The parties must have adequately exchanged sufficient information, through discovery or actual fact-finding, to have a clear understanding as to the issues in dispute, and the issues that would need to be resolved, in order to engage in a successful resolution of the workers’ compensation claim;

·         The parties must remain flexible in the course of attempting to resolve their disputed issues;

·         The parties must be prepared to understand the position held by the opposing party, without engaging in umbrage and incivility;

·         The parties must be clear in their objectives in the course of mediating the workers’ compensation claim;

·         The parties must be clear about their expectations and goals before and during the mediation process;

·         The parties must practice intelligent listening, as well as being internally honest as to the stakes involved;

·         Whether in confidence, or other, both parties must be honest with the mediator, in terms of the procedural, factual, legal, and medical issues involved in the claim;

·         Both parties must be prepared to think about compromise, eliminating unrealistic expectation, as well as the necessity of thinking that the purpose of the mediation is to vanquish the opponent;

·         Both parties must also leave emotions at the mediation door, as it is of no value whatsoever in the throes of mediation; and,

·         No less true, it is critical to “trust” not only the power of the mediation process, but to also revel in the candor and credibility of the mediator as an “agent of reality” to quote the Honorable Susan Cercone, a Workers’ Compensation Judge in Allegheny and Beaver Counties, Pennsylvania.

Privileged to have been a panel presenter with the Honorable David Torrey, we strongly encourage our clients to consider the advantages of mediation, as a testament to risk aversion and claim finality.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

A BLOODIER KISS

By Kevin L. Connors, Esquire

To all familiar with our firm’s prior article impolitely titled “A Bloody Kiss:  The “Paye”-Off = The Missing Link”, addressing the Pennsylvania Supreme Court’s Decision inPayes v. WCAB, 79 A.3d 543 (Pa.2013), under which the Pennsylvania Supreme Court had held that mental injuries are highly fact-sensitive, requiring a reviewing Court to give deference to the fact-finding functions of the Workers’ Compensation Judge, with reviewing Appellate Courts being limited to determining whether the WCJ’s findings of fact are supported by substantial competent evidence, the Supreme Court has now directed the Commonwealth Court to revisit its Decision inKochanowicz v. WCAB (Pennsylvania Liquor Control Board),  a Decision circulated by the Commonwealth Court on September 20, 2011, and the subject of a yet-earlier article that we had posted for all receiving this post.

In  Kochanowicz, a Workers’ Compensation Judge had awarded workers’ compensation benefits to the Manager of a Pennsylvania Liquor Control Board Wine & Spirits Store, after the Manager was held-up at gunpoint, with the critical issue in the case being whether or not the Store Manager was able to prove that the robbery was an abnormal working condition that would have resulted in the Store Manager being entitled to receive workers’ compensation benefits for a mental/mental injury, in the absence of any physical injury having been sustained.

In reliance upon the Pennsylvania Supreme Court’s landmark Decision in Martin v. Kecthum, 568 A.2d 159 (Pa.1990), theKochanowicz Commonwealth Court held that a “psychic injury” case, involving an injury without any physical trauma or symptomatology, requires the Claimant seeking workers’ compensation benefits to prove that the injured Employee has been “exposed to abnormal working conditions and that his psychological injuries are not a subjective reaction to normal working conditions.”

Moreover, under Martin, “psychic injury” cases, involving the mental/mental claim, required the Claimant seeking workers’ compensation benefits to prove that the alleged working conditions causing injury had to be analyzed and considered in the context of the injured Employee’s specific employment, requiring a highly fact-sensitive analysis of not only the job being performed, but also the working conditions alleged to be abnormal, prior to the occurrence of the alleged mental/mental injury.

In Kochanowicz, the Commonwealth Court had also focused on an analysis as to whether the “working conditions” allegedly causing injury, alleged by the Claimant inKochanowicz to be abnormal, with the specific condition being the fact that the Claimant was held-up at gunpoint during a store robbery, were foreseeable or anticipated before the event in question by the Employer, as well as whether the Employee, the Store Manager, had been trained by the Employer that those types of situations, robberies at gunpoint, were potentially normal, in the course of performing work within their work environment, such that the potential for being exposed to violent crimes was a normal working condition.

With the Pennsylvania Supreme Court determining, in Payes, that psychic injury cases are highly fact-sensitive, it is has now directed the Commonwealth Court inKochanowicz, to reconsider the ruling that it had issued in 2011, effectively requiring the Commonwealth Court to give deference to the fact-finding functions of the Workers’ Compensation Judge, and to limit its review of the Workers’ Compensation Judge’s findings of fact to whether those findings are supported by substantial competent evidence.

In short, the Pennsylvania Supreme Court’s per curiam Order entered inKochanowicz on February 12, 2014, effectively reverses the earlier ruling by the Commonwealth Court on September 20, 2011, potentially eviscerating a long line of workers’ compensation decisions that have held, in similar situations, that the foreseeability of a robbery, as contemplated by the Pennsylvania Liquor Control Board inKochanowicz, negates the robbery from being considered to be an “abnormal working condition”, based on the frequency with which robberies occur in liquor stores, as well as by the fact that the Liquor Control Board contemplated that the robbery was not an unforeseen condition, and that it had, therefore, given specific training to its Employees, to include the Store Manager in question, as to what to do in those type of situations, with that foreseeability factor being negated by the Supreme Court’sper curiam Order in Kochanowicz.

Obviously missing from the Supreme Court’s February 12, 2014 per curiam Order is any reference to the issue of physicality, which seems to have been an underpinning in the Supreme Court’s ruling inPayes, as a careful reading of that Decision indicates that the Court was also relying upon the fact that the Claimant, a Pennsylvania State Trooper, had given mount-to-mouth resuscitation to a seemingly insane woman who had attempted suicide by police car, throwing herself in front of the State Trooper’s patrol car, with the State Trooper then attempting to resuscitate the bezerbo woman, and unsuccessfully so, although the State Trooper was exposed to the bezerbo woman’s blood, in the course of administering mouth-to-mouth resuscitation with there being, therefore, physical contact between the State Trooper and the bezerbo woman seeking relief from this tertiary existence, with no such physicality existing inKochanowicz, as there is no reference to any physical contact between the Store Manager, and the robber, during the incident alleged to have caused the mental/mental injury claim.

Although the Commonwealth Court will still be required, under the Supreme Court’sper curiam Order in Kochanowicz, to review the record to make sure that the Worker’s Compensation Judge’s findings of fact, finding that the Claimant proved the occurrence of a work-related mental/mental injury, sustained while the Claimant was subjected to “abnormal working conditions”, are supported by substantial competent evidence, it is predicted that the Commonwealth Court will now be affirming the rulings of both the Workers’ Compensation Appeal Board and the Workers’ Compensation Judge, finding that the Claimant did sustain his burden of proving the occurrence of an injury as a result of “abnormal working conditions”, since the principle issue that the Commonwealth Court had relied upon in reversing the prior rulings by both the Appeal Board and the Workers’ Compensation Judge, were the factors of foreseeability, as well as the fact that the Store Manager had been trained to not only expect such an occurrence, but also how to deal with such an occurrence, when it occurred.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

The ADA Amendments Act has substantially broadened coverage under the law.  An example comes inGogos v. AMS Mechanical Systems, Inc., 737 F.3d 1170 (7^th Cir. 2013).  Mr. Gogos worked as a pipe welder and had been taking medication to reduce his elevated blood pressure for the past eight years.  He commenced employment with the defendant in December 2012 as a welder.  One month later his blood pressure spiked to a very high level, causing some intermittent vision loss. 

            After reporting to work on January 30, 2013, Gogos noticed that his right eye was red.  He sought and received permission to obtain immediate medical treatment for his blood pressure and ocular conditions.  As he left the work site to go for treatment, he saw his general foreman and said he was headed to the hospital for health reasons.  The foreman immediately fired him.

            Gogos sued under the ADA, but his case was dismissed by the district court because the court felt that his medical conditions were transitory.  The Seventh Circuit Court of Appeals reviewed the ADA Amendments Act and observed: “Under the 2008 amendments, a person with an impairment that substantially limits a major life activity, or a record of one, is disabled, even if the impairment is ‘transitory and minor’ (defined as lasting six months or less).   The court noted that the “transitory and minor” language only applies if the law suit is premised on being regarded as having an impairment. That was not the basis of Mr. Gogos’s law suit.  The court also noted that impairments that are episodic or in remission constitute a disability if they substantially limit a major life activity when active.

Based on these provisions, Gogos’s episode of a blood-pressure spike and vision loss are covered disabilities.  He attributes both problems to his longstanding blood-pressure condition, and the ADA’s implementing regulation lists hypertension as an example of an ‘impairment that may be episodic.’  Under the 2008 amendments, ‘the fact that the periods during which an episodic impairment is active and substantially limits a major life activity may be brief or occur infrequently is no longer relevant to determining whether the impairment substantially limits a major life activity.’

            The court said that what was relevant was whether Gogos’s higher-than-usual blood pressure and vision loss substantially impaired a major life activity when they occurred. The court accepted Gogos’s argument that he had impairment of two major life activities: circulatory function and eyesight.  The court also said that the chronic blood-pressure condition could also qualify as a disability because mitigating measures, such as medication that controls the condition, cannot be considered when assessing disability.  The condition must be considered without the benefit of medication in determining whether the condition is substantially limiting.  For these reasons the court vacated the dismissal of Gogos’s case.

            The lesson here is to appreciate that coverage under the ADA has been greatly expanded.  In the aftermath of the ADA Amendments Act, it will be extremely difficult for an employer to prevail in ADA litigation by arguing that there is no covered disability.

Among the hardest cases for employers to contend with are those where the claimant already has an advanced degenerative or arthritic condition and then has an injury.  That was the situation when Veronica Graham, a 55-year-old Certified Nursing Assistant, fell on a wet floor at work on June 25, 2011.  She landed on her left hip, buttocks, and back and was diagnosed with a contusion of the left hip. 

            Initially Graham returned to work with no pain, but within a few days she began to have hip pain.  She was referred to a physician who recommended three physical therapy sessions.  She was placed on light duty while in physical therapy and then returned to work full duty on her discharge date of  July 18, 2011.

            Graham said that she did not experience pain after the accident but did start having pain following physical therapy for her left hip.  She had to stop working in October due to her pain. 

            In November 2011, Graham met with Dr. Gregory S. Maslow, an orthopedic surgeon, who prescribed Percocet for pain management and took x-rays, which showed moderately severe degenerative arthritis of the left hip.  The x-rays showed petitioner lacked cartilage between her hip bone and hip socket.  Dr. Maslow gave an opinion that the work accident caused a previously asymptomatic condition to become symptomatic and thereby accelerated the time frame for a need for hip replacement surgery.

            The respondent’s expert, Dr. Hausmann, an orthopedic surgeon, opined that petitioner had “very severe arthritis” and said that this condition predated the work accident.  In his opinion, petitioner would have needed total hip replacement surgery regardless of the fall at work.  He said that there was a complete loss of the joint space and large spurs around the hip joint.

            The Judge of Compensation accepted the testimony of Dr. Maslow over Dr. Hausmann and found for the petitioner.  The employer appealed and argued that there was insufficient evidence to support the finding in favor of petitioner.  For one thing, the employer argued that petitioner had showed a lack of candor when she failed to disclose an earlier automobile accident and therefore could not be found to be credible in her entire testimony.  There is a doctrine in the law derived from the Latin phrase, “falsus in unum, falsus in omnibus.”  It means false in one thing, false in everything. The Judge of Compensation disagreed with this philosophy and found that the petitioner’s lack of candor was inconsequential since the prior car accident did not pertain to any hip problem.

            The Appellate Division affirmed the decision in favor of petitioner.  The court said,“With respect to petitioner’s claim of exacerbation and acceleration of degenerative arthritis, the record amply supports the judge’s finding that petitioner’s accident caused her previously asymptomatic hip to become symptomatic and increasingly painful.” The court cited previous case law to the effect that “Employers take their employees as they find them, ‘with all of the pre-existing disease and infirmity that may exist.’ “Verge v. Cnty. Of Morris, 272 N.J. Super. 118, 125 (App. Div. 1994).

            This case involves a fairly common situation for employers.  The case involved mostly the concept of “acceleration. ”  There was no dispute that petitioner would have needed a hip replacement at some point in time, so the issue in the case was whether the timing of that surgery changed because of the work accident.  The court was of the opinion that if the accident hastened the need for surgery, even if surgery would have been inevitable eventually, then the employer must pay for the surgery.  In handling similar cases, employers need to focus on prior medical discovery because this case turned on the fact that respondent was never able to prove petitioner had prior hip complaints.  The case also shows that proof that a claimant is not candid in testimony will not necessarily doom the petitioner’s case if the judge feels the lack of candor was not material to the claim.

            This case may be found at Graham v. Silver Care Nursing Center, A-2923-12T2 (App. Div. March 7, 2014).

Many clients ask what the difference is between the defense of independent contractor and casual employment.  The truth is that the defenses are very similar, and one important case,Berkeyheiser v. Mollie S. Woolf, 71 N.J. Super. 171, (App. Div. 1961), illustrates this point.

            The case involved a man who worked full time for St. Regis Paper Company as a pipefitter five days a week, seven and one half hours per day.  From time to time, he performed some odd jobs for Mollie S. Woolf, who owned several buildings. He repaired some doorbells in buildings in 1956.  In September 1957, he repaired a damaged ceiling in a building.  He also installed some shields over doorbells to prevent children from unnecessarily pushing on them.  In November 1957, he repaired apartment windows that had been damaged and installed two window sashes in an apartment.  In February 1958 he repaired some outlets and worked all day.

            On July 12, 1958, Mr. Berkeyheiser borrowed a drill from his son and started to install an electric outlet for a refrigerator in the home of Mollie S. Woolf.  The drill struck a live wire and caused injury to his right eye and facial scars.  He filed a workers’ compensation claim. 

            The facts showed that Mr. Berkeyheiser did not hold himself out to the general public as a repair person.  He had only done some repair work for one other person besides respondent.  The respondent would provide the equipment, of if she did not have the equipment, Berkeyheiser would purchase it and bill respondent.  He was paid by the hour and there was no withholding from his pay.

            The Judge of Compensation found petitioner to be an independent contractor, and the County Court affirmed.  Berkeyheiser appealed and argued that the work he performed was essential to the maintenance and operation of respondent’s business, the so-called relative nature of the work test. 

            The Court said, “Overlapping between casual employees and independent contractors is common, and it is not unusual that a petitioner falls into either or both unprotected classes.”  The Appellate Division held that there a number of factors arguing against employment here.  Petitioner had a regular and permanent full-time job at a substantial salary.  He had no expectation of regular and steady employment by the respondent and only worked when the need arose.  He did not perform repairs on a scheduled basis but would choose the times when he would appear to make repairs. 

We conclude that the character of the work was such as to preclude petitioner from the right to compensation under the Workers’ Compensation Act.  We have accepted all his factual contentions as true, but they do not establish the essential existence of an employer-employee relationship.  Whether he was more a casual employee or an independent contractor need not be decided.  There is no merit to petitioner’s claim that would justify an award, either within the letter or spirit of this remedial legislation.

            This case is useful for practitioners in dealing with these two very close cousins:  the independent contractor defense and the casual employee defense.

St. Louis attorney, J. Bradley Young, recently posted an interesting blog article entitledThis Story Shows Why Employers are Frustrated with Workers Comp Judges. In the article, he reported on a New Jersey case in which the claimant was involved in a car accident while driving off of her employer’s property. She was actually in the process of turning out of the employer’s property at the time of the collision. The Coming and Going Rule would have been an excellent defense except for the fact that it was established that the rear bumper of the car was still hanging over the employer’s property at the time of impact. Since New Jersey is a Positional Risk Doctrine state, it was easy for the employee to win once the Court determined that she was, at least partially, on her employer’s property. In Positional Risk Doctrine states, the employee only need show that the accident would not have happened but for her employment. In other words, if she had not been leaving work that day, the accident would have never happened.

MY TWO CENTS:

If this had happened in Alabama, the result would have been different. Assuming that the Alabama judge also agreed that a hanging bumper thwarted the Coming and Going Rule, the employee would still have had her work cut out for her. The reason being that Alabama is an Increased Risk Doctrine state. This means that the employee must prove that the employment somehow increased the risk to the employee of such an accident occurring. Since car accidents happen to people on and off the job, she would have had to show that the employer’s exit was located in a place that made her more susceptible to getting hit. Of course, if that was the case, the employer would have wanted to accept it as a workers’ compensation matter in order to be afforded the protections of the Exclusivity Doctrine.

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About the Author

This article was written by Michael I. Fish, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atmfish@fishnelson.com or any firm member at 205-332-3430.

Ex parte Southern Erectors, Inc.

Petition for Writ of Mandamus

On February 21, 2014, the Alabama Court of Civil Appeals granted Southern Erectors, Inc.’s (SEI) Petition for Writ of Mandamus. The trial court had denied SEI’s summary judgment motion that was based on the Alabama court not have subject matter jurisdiction over the on the job injury that occurred in Kansas. The Alabama Court Civil of Appeals agreed with SEI and remanded the case with an order to dismiss the workers’ compensation case based on lack of subject matter jurisdiction.

The employee lived in Alabama and learned of a job opening in 2010 with SEI in Wyoming. He left Alabama and traveled to Wyoming for the job. The plaintiff worked on several different job sites in various states over the year for SEI. In February of 2011, the employee, while in Alabama, learned of another job with SEI in Kansas. Once he was told the date he should arrive he left and, upon arrival, completed a new application, Kansas Employee’s Withholding Certificate and stayed in a Kansas Hotel while performing the job. On March 14, 2011 the employee was injured while performing his job in Kansas. He was provided benefits under Kansas Workers’ Compensation and even completed a Kansas Workers’ Compensation form.

On March 13, 2013, the employee file suit for workers’ compensation benefits under the Alabama Act. In agreeing with SEI and ordering that the workers’ compensation claim be dismissed, the Alabama Court of Civil Appeals stated that the trial court did not have subject matter jurisdiction over the claim. The Court of Civil Appeals pointed out that in order for an out of state injury to be compensable under the Alabama Workers’ Compensation Act the requirements of §25-5-35(d) must be met. Subsection (2) and (3) of this section applicable to this case state that benefits are owed for an injury that occurs out side of this state if benefits would have been owed had the injury occurred in Alabama, provided that at the time of injury (2) he was working under contract for hire made in this state in employment not principally localized in any state, and (3) he was working under a contract of hire made in this state in employment principally localized in another state whose workers’ compensation law was not applicable to his employer. The Court of Civil Appeals found that the employee impliedly accepted the job offer by traveling to Kansas.See Ex parte Robinson, 598 So. 2d 901, 904 (Ala. 1991). Therefore, the employee was under a contract for hired entered into in Alabama. However, the Court of Civil Appeals stated that this conclusion does not automatically mean that the Alabama Workers’ Compensation Act applies. See Ex parte Fluor Corp., 960 So. 2d 701 (Ala. Civ. App. 2006). §25-5-35(d)(2)&(3) requires that the court also consider the principal location of the employment as defined in §25-5-35(b). The Supreme Court stated inEx parte Flour Corp. that principally localized pursuant to §25-5-35(b) merely means the employee worked for the employer at a designated place within a state.

The Court of Civil Appeals considered the following factors to determine the principal location of employment in the present case: (1) the application was completed in Kansas, (2) work was being performed in Kansas at the time of injury, (3) he was living in a Kansas hotel at the time of the accident, (4) he completed Kansas tax withholding forms and (5) SEI was operating out of Kansas for that job creating a place of business there. For these reasons, the Court of Civil Appeals found that the employee’s employment was principally localized in Kansas. Therefore, §25-5-35(d)(2) would not apply because SEI was principally localized in Kansas and §25-5-35(d)(3) would not apply because there was no evidence that Kansas workers’ compensation laws were not applicable to SEI.

The Court of Civil Appeals rejected the employee’s argument that the employer had to have a permanent and continuous presence in the state to establish a principal location in the state (the employee had cited an Alabama Federal case that used this language but that case applied to venue and not §25-5-35(d)).

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. He has been selected as a "Rising Star" by Super Lawyers. He is the past Chair of the ABA/ TIPS Workers’ Compensation and Employers’ Liability Committee. Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atjholden@fishnelson.com or 205-332-1428.

Iowa Supreme Court Schedules Special Evening Session

Des Moines, February 24, 2014 —On Tuesday evening, March 4, the Iowa Supreme Court will hear oral arguments in the case of Godfrey v. State of Iowa, et al., beginning at 7:00 p.m. in the Supreme Court Courtroom on the fourth floor of the Judicial Branch Building, 1111 East Court Avenue, Des Moines. The evening session is an opportunity for central Iowa residents, who may not be able to attend the court's regular morning and afternoon sessions, to watch the court conduct oral arguments.

Attorneys' briefs for the case and a guide to oral arguments are posted on the Iowa Judicial Branch website at:

http://www.iowacourts.gov/About_the_Courts/Supreme_Court/Evening_Oral_Arguments_Des_Moines/index.asp

Proceedings will be streamed live from the Iowa Judicial Branch web site at:http://www.iowacourts.gov/About_the_Courts/Supreme_Court/Oral_Argument_Videos/.

In this case, the Iowa Supreme Court will be asked if tort claims against state officials must be brought under the Iowa Tort Claims Act, Iowa Code chapter 669. The statute provides that if the actions of state employees that are the basis of the claim were within the scope of their employment, the employees have immunity and the State of Iowa will be substituted as defendant for the individual employees.

Plaintiff Christopher Godfrey is serving a statutory six-year term as Iowa's Workers' Compensation Commissioner. His term is due to expire April 30, 2015. He has sued the State of Iowa and several individuals, including Governor Terry Branstad and Lt. Governor Kim Reynolds, on a variety of claims, including violation of his constitutional rights, defamation, and intentional interference with contract.

Under Iowa Code section 669.5, the Iowa attorney general certified that defendants' actions were within the scope of their employment with the state. Based on the attorney general's certification, the individual defendants asked the district court to substitute the State of Iowa as the sole defendant in the case. The district court concluded that chapter 669 mandated a finding that the attorney general's certification on scope of employment was conclusive, requiring the court to substitute the State of Iowa for individual defendants. Plaintiff Godfrey contends the district court was wrong to dismiss the individual defendants from the case.

On appeal of the district court's ruling, issues before the Iowa Supreme Court include:

I. Does the attorney general's certification pursuant to Iowa Code section 669.5(2)(a) conclusively establish that a state employee was acting within the scope of his or her employment (and therefore the action is deemed to be an action against the state and the state is substituted as the defendant in place of the employee) or is the attorney general's certification subject to the court's (or a jury's) independent review?

II. If the attorney general's certification does conclusively establish that a state employee was acting within the scope of employment, then does the application of section 669.5(2)(a) result in an unconstitutional deprivation of plaintiff's due process rights?

A public reception with the supreme court justices will follow the oral arguments.

For more information, visit http://www.iowacourts.gov/About_the_Courts/Supreme_Court/