Insurer sent settlement payment to the employer’s attorney on the 30^th day after entry of an order approving lump sum settlement. However, the payment was not delivered to counsel for the employee until the 31^st day after the lump sum order was entered. The Court of Appeals held that a 50% penalty on the $265,000.00 settlement check was due. Had the adjuster sent the check via UPS directly to counsel for plaintiff there would be no penalty due, even though it arrived on the 31^st day, because it was sent within 30 days as required byBrown v. Harbor Fin. Mortgage Corp., 267 Neb. 218, (2004).

Harris v. Iowa Tanklines, Inc.,20 Neb. App. 513 (2013)

NC Risk Handling Hint -Setting Aside a Form 60

Dennis Ray Spivey was employed by Wright’s Roofing as a laborer for approximately three years. Wright’s
Roofing contracted with AMS Staff Leasing, who provided workers’ compensation coverage for its employeeswhose employment had been reported to AMS. Spivey completed forms required by AMS and AMS issued his paychecks. Plaintiff stopped working for Wright’s Roofing and a Wright’s Roofing representative submitted termination forms to AMS noting that Spivey was no longer employed by Wright’s Roofing. A year later, Spivey resumed his employment with Wright’s Roofing but did not complete AMS staffing forms. Instead, Spivey was paid with checks drawn on a Wright’s Roofing account.

One day, Spivey was injured as he worked on a residential job in which Boyet Builders was the general contractor and Wright’s Roofing was the subcontractor. Spivey filed a Form 18 and AMS Staff Leasing, Dallas National Insurance, Co., and Crawford & Company (hereinafter “Defendants”) filed a Form 60 and began paying weekly disability benefits. Shortly thereafter, Defendants determined that they had no Workers’ Compensation coverage applicable to Spivey, and filed Forms 63 and 61, denying liability and terminating benefits.

Spivey filed an amended Form 18 and a Form 33 in which he named Wright’s Roofing, Dallas National and Boyet Builders as responsible parties. Boyet Builders filed a Form 61 and a Form 33R and denied that Spivey was its employee at the time of the injury and asserted that Defendants had already accepted liability for benefits.

At hearing, Spivey moved that Defendants be ordered to reinstate TTD benefits and Deputy Commissioner Phillips allowed the motion. She later entered an Order holding Boyet Builders and Auto-Owners Insurance liable for Spivey’s injury and ordered them to pay indemnity and medical benefits. Boyet and Auto Owners appealed to the Full Commission. The Commission determined that Defendants had no legal basis to withdraw their Form 60 and ordered them to provide indemnity and medical benefits. Defendants appealed to the North Carolina Court of Appeals.

On January 15, 2013 inSpivey v. Wright’s Roofing, the Court first considered whether the Full Commission erred by refusing to allow Defendants to set aside the Form 60. Finding no error, the Court noted that an employer who files a Form 60 waives the right to contest the compensability of a claim on the basis of a unilateral mistake. According to the Court, the burden is on the employer or carrier to determine whether a particular claim is compensable and whether the employer or carrier is liable before filing a Form 60.

The Court also addressed the issue of whether the Full Commission erred in holding that Boyet Builders was not responsible for benefits pursuant to N.C.G.S.§ 97-19. The Court noted that N.C.G.S. § 97-19 applies only when two conditions are met. First, the injured employee must be working for a subcontractor doing work that has been contracted to it by a principal contractor. Second, the subcontractor does not have workers’ compensation insurance coverage covering the injured employee and since workers’ compensation insurance was available through Spivey’s immediate employer, Wright’s Roofing, because Defendants accepted the claim, there was no error.

Risk Handling Hint:Risk Managers are reminded to carefully consider whether a claim is compensable before accepting an injury on a Form 60. Benefits can be paid and medical treatment provided during the investigation period by filing a Form 63. If additional time is required to conduct an investigation, the employer and carrier can request a limited extension of time from the Industrial Commission.

Michael DePue v. WCAB (N. Paone Construction, Inc.) 

1113 C.D. 2012 (PA. Cmwlth. January 30, 2013)

By: Lisa A. Miller, Esquire

The Commonwealth Court affirmed the Decision of the Appeal Board and WCJ which denied the Claimant’s Review Petition to add a left shoulder injury to the description of his work injury more than two (2) years after the approval of a Compromise and Release Agreement, and also denied Claimant’s Penalty Petition for failure to pay medical bills for the left shoulder injury.

The Claimant sustained a work-related closed head injury on February 26, 1996. On March 3, 2008, the Claimant and Defendant entered into a Compromise and Release Agreement to settle the Claimant’s indemnity benefits for a lump sum amount of $175,000.00 as “full and final satisfaction of all future wage loss benefits.”

The injuries described in the C&R Agreement were described as “any and all injuries. . . . including but not limited to the accepted injuries of a severe closed head injury with seizure disorder, and short term memory loss.” The Defendant agreed to continue to pay “all reasonable and related medical bills.” 

The Claimant filed a Penalty Petition alleging that Defendant failed, neglected, or refused to pay medical bills. The Claimant sought a fifty (50%) percent penalty on $1,200.00 in medical bills. The Claimant also filed a Review Petition alleging that the description of his work injuries were incorrect. 

The Defendant denied the Claimant’s allegations, and sought dismissal of the Review Petition invokingres judicata and collateral estoppel.

The Claimant submitted a Pre-Trial Memorandum in which he alleged that Defendant informed him in January 2010 that it would no longer pay for treatment for his left shoulder injury.

The Defendant submitted the WCJ’s Decision approving the Compromise and Release Agreement; the transcript of the Compromise and Release Hearing; and a packet of Proposed Addendums to the Compromise and Release Agreement prepared by Claimant’s counsel with changes, including a hand written notation made by Defendant’s counsel thereon; and the February 27, 2008 letter that Defendant’s counsel sent to Claimant’s counsel. 

In an Interlocutory Order, the WCJ precluded Claimant from proceeding on the Review Petition, and scheduled a hearing on the Penalty Petition to determine whether the Claimant was alleging unpaid medical bills from the left shoulder injury only, or for other injuries accepted by the Defendant. The WCJ indicated that if Claimant was alleging the medical bills only for the left shoulder injury, the Penalty Petition would be denied. Claimant’s counsel stated that the Penalty Petition was related only to the left shoulder injury, and the WCJ denied the Review and Penalty Petitions. 

The WCJ concluded that the Review Petition was barred byres judicatabecause the Claimant was aware of the left shoulder injury at the time of the C&R, and agreed not to include it in the Compromise and Release Agreement. The WCJ relied onWeney v. WCAB (Mac Sprinkler Systems, Inc.),960 A.2d 949 (Pa. Cmwlth. 2008). InWeney the Claimant’s first Review Petition was resolved by a Stipulation, in which the parties agreed to amend the NCP to include a shoulder injury. Three (3) days after the WCJ approved the Stipulation and granted the Review Petition, the Claimant filed another Review Petition to amend the NCP to add neck or cervical spine injuries. The Court concluded that the second Petition was barred by theres judicata because the Claimant was aware of those injuries and their causal relationship to the work incident during the first Review Petition proceeding, and should have litigated the claim during that proceeding. 

The Appeal Board affirmed the WCJ’s Decision, concluding that the evidence did not indicate that the C&R Agreement was entered into by unilateral or mutual mistake.  The Board determined that the C&R Agreement was final and binding, and that the Review Petition was barred byres judicata. The Board noted the Claimant was attempting to raise a matter in his Review Petition that should have been litigated during the earlier proceeding on the Compromise and Release Agreement underWeney.

The Claimant argued that the Compromise and Release Agreement should be “corrected” to add the left shoulder injury to the description of his work injuries.  The Claimant alleged that the left shoulder injury was “erroneously” omitted in the final draft of the Agreement. Claimant contends that the Employer routinely paid medical bills for the left shoulder injury, and that it knew that the bills were “casually related to his injuries.” Claimant disputed thatres judicata applied to the matter noting that there was no prior litigation involving a request to amend the description of his work injuries.

Employer argued that the Claimant flagrantly misrepresented that the left shoulder injury was erroneously omitted in the final draft of the Compromise and Release Agreement.  Employer contended that the Claimant was entitled to receive medical benefits only for the injuries described in the Compromise and Release Agreement as accepted by the Employer, and that the Review Petition was barred byres judicata and collateral estoppel. 

Section 449(a) and (b) of the Act provides that:

a) Nothing in this Act shall impair the right of the parties interested to compromise and release …any and all liability which is claimed to exist under this act on account of injury or death.

b) Upon or after filing a Petition, the Employer or Insurer may submit the proposed Compromise and Release by stipulation signed by both parties to the WCJ for approval. The WCJ shall consider the Petition and proposed Agreement in open hearing and shall render a Decision. The WCJ shall not approve any Compromise and Release unless he first determines that the Claimant understands the full legal significance of the Agreement. The Agreement must be explicit with regard to payment, if any, of reasonable, necessary and related medical expenses. 

In enacting Section 449 of the Act, the legislature intended a Compromise and Release Agreement to be “on equal footing with civil settlements” in order to promote a public policy of encouraging the parties to settle disputes and bring them to finality. Stroehmann Bakeries, Inc. v. WCAB (Plouse),768 A.2d 1193, 1196 (Pa. Cmwlth. 2001).

Defendant’s exhibits demonstrated that before the execution of the Compromise and Release Agreement, Claimant’s counsel sent a Proposed Addendum to the Agreement to Defendant’s counsel. 

Paragraph Twenty-Four (24) of the Proposed Addendum stated “the accepted injuries includes ‘closed’ head injury, seizure disorder, left shoulder fracture, chronic pain, loss of short term memory and bi-polar disorder. Defendant agrees to continue to provide medication and medical care which is reasonable and necessary, and casually related to his injuries.”

Defendant’s counsel sent the Proposed Addendum back to Claimant’s counsel after crossing out the injuries of “left shoulder fracture”, “chronic pain”, and “bi-polar disorder” in paragraph 24, and placing a hand written notation, which stated that “we already negotiated these injuries at the time of the ‘settlement’”. In a letter dated February 27, 2008, that accompanied the Proposed Addendum sent back to Claimant’s counsel with his changes and notation, Defendant’s counsel further stated “we previously negotiated the accepted injuries in 2007 and those are the only injuries I will outline on the Agreement.” The C & R Agreement signed by the Claimant and Defendant described Claimant’s injuries as accepted by Defendant as “a severe closed head injury with seizure disorder and short term memory loss” and omitted the other injuries listed in the Proposed Addendum. 

At the March 3, 2008 hearing, the Claimant testified that his head injury affected mostly his short term memory and caused seizures.  He was not asked, and did not testify as to the left shoulder injury. 

The WCJ found that Claimant understood the full legal significance of the Agreement “as regards to his work related injury and right to Worker’s Compensation benefits.”  The WCJ determined that the parties entered into a “valid and binding Agreement” Department of Labor and Industry, Bureau of Worker’s Compensation v. WCAB (Ethan-Allen Eldridge Division),972 A.2d 1268 (Pa. Cmwlth. 2009).  An approved Compromise and Release Agreement can be set aside only upon a clear showing of fraud, deception, duress, a mutual mistake or unilateral mistake caused by an opposing party’s fault. Farner v. WCAB (Rockwell Int’l), 869 A.2d 1075 (Pa. Cmwlth. 2005);Barsczzewski v. WCAB (Pathmark Stores, Inc.), 868 A.2d 224 (Pa. Cmwlth. 2004).

After negotiations with the Defendant, the Claimant agreed to omit the left shoulder injury from the description of his injuries accepted by the Defendant in the Compromise and Release Agreement. The record did not support Claimant’s assertion that the left shoulder injury was erroneously omitted in the final draft of the Compromise and Release Agreement. The Compromise and Release Agreement was final and binding on the parties, and may not be amended after its unappealed approval period.

Once a Compromise and Release Agreement is approved, any issue which was not expressly reserved in the Agreement may not be raised later.  Department of Labor and Industry, Bureau of Workers’ Compensation v. WCAB (U.S. Food Service), 932 A.2d 309 (Pa. Cmwlth. 2007). Because the Claimant did not expressly reserve his right to add the new injury to the description of his work injuries, he was precluded from doing so more than two (2) years after the approval of the Compromise and Release Agreement.

Claimant argued that the description of the “injury” in the Compromise and Release Agreement as “any and all injuries” sustained in Employer’s workplace indicates the party’s intention to include the left shoulder injury in the injuries accepted by the Defendant. The Claimant relied on the contract construction rule that the intention of the parties must be ascertained from the document itself, if its terms are clear an unambiguous. 

However, Employer did not accept its liability for the left shoulder injury in the NCP or in any Agreement, and specifically refused to include it as part of the Compromise and Release. Nor was there any prior decision finding Defendant liable for that injury. 

The Court rejected the Claimant’s reliance on the Doctrine of Promissory and Equitable Estoppel. Promissory estoppel may be invoked to enforce a promise made by a party to an opposing party when there is no enforceable agreement between the parties. Crouse v. Cyclops Indus., 560 Pa. 394, 745 A.2d 606 (2000). 

In order to maintain an action in promissory estoppel, the aggrieved party must show the (1) the promissor made a promise that he or she should have reasonably expected to induce action or forbearance on the part of the promisee; (2) the promisee actually took action refrained from taking action in reliance on the promise; and (3) injustice can be avoided only by enforcing the promise.  The essential elements of equitable estoppel are that the party’s inducement of the other party to believe certain facts to exist and the other party’s reliance on that belief to act. Westinghouse Elec. Corp/CBS v. WCAB (Korach),584 Pa. 411, 883 A.2d 579 (2005). In the absence of “expressly proved fraud, there can be no estoppel based on the acts or conduct of the party sought to be estopped, where they are as consistent with the honest purpose and with absence of negligence as with their opposites.” Westinghouse, 584 Pa. at 423, 883 A.2d at 586. 

Nothing in the record suggests that Defendant promised to continue to pay medical bills for the left shoulder injury, and that Claimant relied on such promise to enter into the Compromise and Release Agreement. The record demonstrates that he negotiated the extent of his work injuries with the Employer, and ultimately agreed to omit the left shoulder injury in the Agreement. Claimant can not rely on the Employer’s voluntary payment of the medical bills for the left shoulder injury to support his estoppel claims. The Court has consistently held that Employer’s voluntary medical payment does not constitute an admission of liability for the injury. Securitas Sec. Servs. USA, Inc. v. WCAB (Schuh),16 A.3d 1221 (Pa. Cmwlth. 2011); Findley Township v. WCAB (Phillis),996 A.2d 111 (Pa. Cmwlth. 2010). To hold otherwise would be contrary to the Act’s policy of encouraging Employers to voluntarily pay medical expenses to injured employees to assist them in regaining health without fear of being later penalized for the payment. Defendant’s payment of medical expenses was not an admission of liability for the left shoulder injury and cannot be construed as a promise to continue to make such payment. 

In conclusion, the Claimant’s Review Petition was barred by the final and binding Compromise and Release Agreement. 

Here are the details of a new proposed bill out of the Iowa House that would change the way we handle alternate medical care, among other items:

House File 274

Bill Explanation:
This bill relates to the state's workers' compensation laws by modifying alternate care procedures for medical treatment, creating registries of physicians who treat and evaluate work=related injuries, providing for the retention of a medical director, creating a state workplace injury care providers registry fund, establishing a workers' compensation advisory council, providing for and appropriating fees, and providing effective dates.

MEDICAL AND ALTERNATE CARE. Code section 85.27(4), concerning the provision of medical services, requires an employer to provide written information about the state's workers' compensation laws to an employee upon receiving notification that the employee has suffered a work=related injury.

The employer has the right to predesignate a licensed physician to treat the injury and make necessary referrals and may predesignate a physician listed on the state registry of workplace injury care providers. If the employer does not predesignate a treating physician, the employee may designate a physician of the employee's choosing to provide the treatment. The physician predesignated by the employer or designated by the employee is required to provide ongoing written documentation of the physician's opinions, treatment recommendations, and care plan to the employee along with information about whether the opinions, recommendations, and care plan are in accord with either the official disability guidelines and treatment guidelines in workers' compensation published by the work loss data institute or the American college of occupational and environmental medicine practice guidelines (ACOEM), and if so, citation to the appropriate guidelines. The employee has the right to request and obtain a second opinion from another licensed physician of the employee's choosing at the employer's expense. If the employer or employee is dissatisfied with the care of a treating physician predesignated or designated by the other party or with any referral made by that physician, the employer and employee may mutually agree to alternate care. If they cannot agree on alternate care, either party may notify an insurance claims specialist within the division of workers' compensation, who shall, within five working days, schedule a conference between the parties to review the basis for dissatisfaction and provide an advisory opinion to resolve the dispute. If the parties still cannot agree on alternate care after this conference, the workers' compensation commissioner may, upon application and reasonable proof of the necessity, allow and order alternate care. The employee is responsible to make the application for alternate care and to provide such reasonable proof to the commissioner if the employer provided written information about the state's workers' compensation laws at the time of notification of the employee's injury, and predesignated a treating physician listed on the state registry of workplace injury care providers, and if the treating physician predesignated by the employer provided written documentation to the employee of the physician's opinions, treatment recommendations, and care plan along with citation to the appropriate treatment guidelines. The employer is responsible for making the application for alternate care and providing reasonable proof if the employer and predesignated treating physician did not act as described above or if the employee designated the treating physician to treat the work injury. The commissioner is not bound by the advisory opinion of the claims specialist and must conduct a hearing and issue a decision within 10 days of receipt of an application for alternate care. The employer has the right to request an employee to submit, as often as is reasonable and at a reasonable time and place to an examination by a licensed physician chosen by the employer for any purpose relevant to the employer's duties to provide benefits to the employee under the state's workers' compensation laws and at the employer's expense. If the employer makes the request in writing and pays all expenses, including transportation, the employee shall submit to the examination. Each time that the employer obtains an evaluation of an employee's permanent disability by a physician chosen by the employer, if the employee believes that the evaluation of disability is too low, the employee may obtain a subsequent examination and evaluation by a physician of the employee's choosing at the employer's expense, including transportation expenses to and from the place of the examination.

PROVIDER REGISTRIES ==== FEES ==== MEDICAL DIRECTOR. New Code section 85.73 requires the workers' compensation commissioner to establish and maintain a registry of licensed physicians that offer or provide treatment of work=related injuries. The commissioner shall, by administrative rule, establish requirements for a physician to be listed on the registry and establish a registration fee. The provision shall not be construed to require a physician to be listed on the registry in order to offer or provide treatment of work=related injuries or to prohibit an employer or employee from predesignating or designating a physician to provide treatment who is not listed on the registry.

New Code section 85.74 requires the commissioner to establish and maintain a separate registry of licensed physicians trained to perform independent medical evaluations and to issue impairment ratings of injured employees. The commissioner shall establish, by administrative rule, minimum training requirements for a physician to be listed on the registry and establish a fee. A physician must be listed on the registry in order to perform independent medical evaluations and issue impairment ratings of injured employees in this state. The commissioner may prohibit an employer or employee from using an independent medical evaluation or impairment rating of an injured employee from a physician who is not listed on the registry as evidence at a hearing to determine benefits under the state's workers' compensation laws.

New Code section 85.76 authorizes the commissioner to retain the services of a medical director to assist the division of workers' compensation in advancing the field of occupational health in Iowa and to advise the commissioner on how to successfully apply and administer the state's workers' compensation laws.
STATE WORKPLACE INJURY CARE PROVIDERS REGISTRY FUND. All registration fees collected pursuant to new Code sections 85.73 and 85.74 shall be credited to the state workplace injury care providers registry fund created in new Code section 85.77 and are appropriated to the division of workers' compensation by new Code section 85.75 to carry out the provisions of new Code sections 85.73, 85.74, 85.75, 85.76, and 85.78, including establishing and maintaining the two physician registries, retaining a medical director, and for the expenses of the workers' compensation advisory council created in new Code section 85.78.

WORKERS' COMPENSATION ADVISORY COUNCIL. New Code section 85.78 establishes a workers' compensation advisory council within the division of workers' compensation that is composed of six members, three representing employers and three representing organized labor. The governor appoints two of the members, the president and the minority leader of the senate jointly appoint two members, and the speaker and the minority leader of the house of representatives jointly appoint two members. The members serve six=year staggered terms, except that for the initial terms beginning on January 1, 2014, one member appointed by the governor, one member representing employers, and one member representing organized labor shall be appointed for three=year terms to ensure that members serve staggered terms. The purpose of the council is to assist the workers' compensation commissioner in the successful administration of the division of workers' compensation and to make recommendations to the governor and the general assembly regarding workplace safety and improvements to the state's workers' compensation system.

EFFECTIVE DATES. The sections of the bill creating the provider registry for treatment of work injuries, the provider registry fund, the position of medical director, and the advisory council, and appropriating fees, take effect January 1, 2014. The sections of the bill pertaining to alternate care procedures and required registration of physicians performing independent medical evaluations and impairment ratings take effect July 1, 2014.

If you have any questions on this, please feel free to call Mark Bosscher or Lee Hook at 515-243-2100. We'd be happy to help answer any questions you might have, big or small!

On February 15, 2013, the Alabama Court of Civil Appeals released its opinion in CVS/Caremark Corp. v. Gloria Washington wherein it addressed  the affirmative defense of judicial estoppel in the workers’ compensation context. Specifically, the Court noted the availability of the defense but only when properly pled. 

The Court of Appeals had previously addressed the issue in White Tiger, Inc. v. Paul Clemons (released January 13, 2012).  In that case, the Court ruled that a claimant’s assertion that he was available and able to do some work at his unemployment hearing, did not prevent him from being awarded permanent and total disability benefits in his workers’ compensation case.  The Court noted that being willing and able to do some work does not necessarily mean that you are able to secure employment that you are physically able and qualified to do. In the workers’ compensation case the plaintiff testified that he could not secure work because of his disability but he would give it a shot if someone hired him for a job he was qualified to do. For this reason the Court held that the two statements, in separate judicial proceedings, did not contradict one another in order to satisfy the necessary criteria for judicial estoppel to apply. 

In the more recently decided Washington case, the Court held that the employer waived its right to assert judicial estoppel as a defense by not affirmatively asserting or pleading it.  The Court further noted that the employee would have been judicially estopped from prevailing on a claim for permanent and total disability benefits based on the Court’s rationale in Clemons.  The Court distinguished the two cases because the employee in Washington testified in her workers’ compensation case that she could not work at all because of her pain and she had not sought employment.  The employee further admitted that she misrepresented her condition and ability to work in her claim for unemployment benefits. Unlike the Clemons case, in which the plaintiff testified he would give it a shot if he was hired in a position he was qualified for in the workers’ compensation case, the employee in Washington testified that she could not work and had not sought work because her injury/pain prevented her from working at all. Therefore, the two statements were in direct conflict of one another.  

Practice Pointer: Judicial estoppel is a viable defense in workers’ compensation cases but only if it is affirmatively pled.   

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ABOUT THE AUTHOR 

The article was written by Joshua G. Holden, 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 Defense Network (NWCDN). If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at jholden@fishnelson.com, 205-332-1428 or any firm member at 205-332-3430.

On February 8, 2013, the Alabama Court of Civil Appeals released its opinion in Ex Parte Johns & Kirksey, Inc. wherein it denied an employer’s petition for a writ of mandamus.  In its petition, the employer had sought relief from an interlocutory order finding that alleged cumulative trauma back and leg injuries were compensable.   

At trial, the employee presented evidence that he sustained a work related back injury and underwent surgery in November 1996. The employee returned to work, performing at full-duty after his recovery. In 2008, the employee began to have trouble with his back and right leg and claimed the new problems were the result of repetitive manual labor resulting in a cumulative-trauma injury. In particular, the employee presented evidence that he spent 60% to 80% of his time at work performing manual labor such as heavy lifting and installing roofs which required repetitive bending, stooping, squatting and kneeling. Additionally, a physician stated that the employee’s job duties were at least a contributing cause of his injuries.   

The employer offered testimony that the employee only spent 50% of his time performing manual labor, with half of that falling in the light or medium-duty range.  

In denying the employer’s petition, the Court of Appeals noted that the evidence presented at trial supported a finding that the employee proved both medical and legal causation by clear and convincing evidence. As such, the employer could not establish a clear legal right to the relief sought.   

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About the Author           

This blog post was written by Trey Cotney, 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 at tcotney@fishnelson.com or any firm member at 205-332-3430.

In Alabama, an aggravation of a preexisting condition can be treated as a new injury if the claimant was working without restriction prior to the accident date or date of last exposure to cumulative trauma. This is similar to the law in Iowa. Recently, an Iowa workers’ compensation matter (McQuown v. Brecht Trucking, Inc.) was initially decided in favor of the employer based, in large part, on medical testimony distinguishing between aggravation and symptoms. According to the testifying doctor, an aggravation means that an underlying situation was made to be medically worse, which is different than merely experiencing symptoms of a preexisting condition while performing work duties.

Iowa Workers' Compensation cases can go through several levels of appeal. The above case was first tried before a Deputy Workers Compensation Commissioner who issued an arbitration decision in favor of the employer. The case was then appealed to the Iowa Workers Compensation Commissioner which reversed the arbitration decision. The employer now has the option of appealing the matter to the Iowa District Court.

My Two Cents: 

Although this is an Iowa case, it is a must read for anyone that handles Alabama workers’ compensation matters. It presents an interesting argument which employers and treating physicians should consider when presented with an aggravation claim.

_________________________________________

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 at mfish@fishnelson.com or any firm member at 205-332-3430.

NC Risk Handling Hint -N.C.G.S. § 97-6; Employment Relationship

In a startling departure fromestablished precedent, the North Carolina Court of Appeals has elevated the position of a written agreement with regard to the determination of whether an employment relationship exists for the purposes of workers’ compensation. InGregory v. Pearson, the Court held that, “[b]ecause the [Defendant] chose [by contract] not to establish an employment relationship with [Plaintiff], it eschews both the liabilities and protections of the Workers’ Compensation Act.” The Court in Gregory went on to explain the provisions of N.C.G.S. § 97-6, which provides that “[n]o contract…shall in any manner operate to relieve an employer…of any obligation created by this Article,” did not apply as the parties’ agreement had already explicitly rejected an employment relationship in contract. In other words, because Defendant agreed in a contract that no employment relationship existed, the Workers’ Compensation Act did not apply and Defendant could not avail itself of the exclusivity provision of the Act.

The decision inGregory was handed down on December 31, 2012. As such, the time-frame for pursuing additional review or rehearing hasnot yet run. For the time being, however, this decision looks to be a significant development in the body of case-law which defines an employment relationship for purposes of workers’ compensation. It may be North Carolina’s first step toward allowing employers to “opt out” of the workers’ compensation system.

TCDG will continue to monitor this development as its outcome and impact become more clear.

NC Risk Handling Hint -Estoppel; Insurance Coverage; Sanctions

Defendant insurance carrier, New York State Insurance Fund (NYSIF), contracted to provide workers’ compensation coverage for Defendant-Employer, DenRoss Contracting, with a policy rider which specifically excluded “bodily injury occurring outside the State of New York.” DenRoss was annually audited by NYSIF, after which the policy was automatically renewed and premiums paid. DenRoss provided maintenance service throughout the U.S. and contracted with Defendant Kapstone Kraft Paper to provide services, for which DenRoss hired James Arthur Smith and several others. Smith filed a workers’ compensation claim after suffering a work-related injury. DenRoss denied the claim, stating NYSIF had coverage and Kapstone was the principal contractor and statutory employer. Kapstone denied liability stating Smith was either an independent contractor or the employee of an independent contractor, DenRoss.

The Deputy Commissioner ordered DenRoss to begin making payments immediately or notify the Commission of its denial that day and further ordered DenRoss to submit the claim to NYSIF for immediate payment. The order was not appealed. After a hearing the Deputy Commissioner entered an Opinion and Award ordering NYSIF to pay Smith benefits, including past medical expenses, attendant care and a 10 percent penalty for unreasonable and untimely denial of benefits under N.C.G.S. § 97-18(j).

On Appeal by NYSIF, the Full Commission determined that allparties were bound by the Workers’ Compensation Act, that DenRoss was covered under NYSIF’s policy at the time of Smith’s injury, awarded a 10 percent penalty for untimely and unreasonable denial and ordered Defendants to pay Smith’s attorney’s fees under N.C.G.S. § 97-88.1 as a sanction.

On December 18, 2012, inSmith v. DenRoss Contracting, U.S., Inc., the Court of Appeals first dismissed NYSIF’s contention that it was not subject to the jurisdiction of the North Carolina Industrial Commission and noted that New York law specifically stated that the NYSIF was created by statute, but was “nevertheless treated by statutes as a separate insurance business… especially in litigations.”Commissioners of State Insurance Fund v. Low, 3 N.Y.2d 590, 595, 148 N.E.2d 136, 138 (1958). The Court agreed with the Commission that Smith sustained compensable injuries while working for DenRoss who paid premiums to NYSIF to maintain coverage and, as such, NYSIF was liable for Smith’s injuries.

The Court also held that the Commission did not err in concluding that Smith’s injury was covered by the insurance policy between NYSIF and DenRoss inasmuch as the Commission did not base its decision on the coverage provided in the policy which specifically excluded bodily injury occurring outside of New York State. Rather, the Court noted, the Commission had instead concluded that NYSIF was estopped from denying coverage because its representations to DenRoss were sufficient for DenRoss to believe it was covered for injuries outside New York State.

Although the Court declined to determine whether NYSIF misled DenRoss, it concluded that the Commission did not err in finding that NYSIF’s actions were sufficient to induce DenRoss into believing it had coverage because NYSIF accepted premiums knowing that DenRoss only had clerical staff in New York State, but performed work throughout the United States.

The Court, however, did find that the Commission erred in awarding a late payment penalty against NYSIF even though it responded more than thirty days after Smith’s Form 18 since it did respond within thirty days of receiving notice of the claim from the Commission, as required under N.C.G.S. § 97-18(j)(2). The Court also held that the Commission erred in concluding that NYSIF unreasonably defended the claim since NYSIF’s policy specifically excluded claims for bodily injury outside of New York State and the Full Commission’s award on estoppel grounds was affirmed.

Risk Handling Hint: Carriers need to be aware of the specific business of their insured. In North Carolina, coverage may be found despite any policy language which otherwise attempts to limit the geographic scope of coverage.