State News

Vinno Verasawmi was the sole proprietor of VKR, which manufactured custom kitchen cabinets for residential and commercial customers.  The company had two other employees. Verasawmi would visit construction sites and meet customers in the ordinary course of business. He drove a Porsche Cayenne, registered in his own name, both for personal and business use.  He testified that he bought the Porsche to impress potential customers.

On April 24, 2012, Verasawmi left his house at 6:45 a.m. to go to his shop in Middlesex, N.J.  Then he proceeded to a construction site in Peapack, N.J. where he installed kitchen cabinets.  He also picked up architectural drawings and started driving back to the shop.  It was then that he noticed a red warning light on the dashboard of his car, indicating a need for service. 

Verasawmi drove to the shop, dropped off the drawings, and then proceeded to drive to an auto dealership in Edison, N.J. arriving at 10:00 a.m. He left the vehicle at the dealership and rented a replacement vehicle.  Subsequently he drove from the dealership in the replacement vehicle back to his shop in Middlesex.  On the way to the shop he was involved in an accident with a tractor-trailer.  He filed a claim petition alleging serious injuries that prevented him from operating his business. He also filed a third party suit.

Verasawmi argued that as the employer, he directed himself to take the Porsche to the dealership for servicing.  He contended that this trip and the return trip to the office were compensable because his employer directed him to make the trips. 

The Judge of Compensation ruled that petitioner was not in the course of his employment at the time of his accident.  The Judge held that the maintenance on his vehicle did not constitute a benefit to his employer.  The Judge also commented that Verasawmi initially claimed he was on the way to a job site when the accident occurred, but in the law suit against the operator of the tractor-trailer he conceded he had been returning to his shop when the accident transpired.  In the end, the Judge of Compensation found that petitioner’s actions were entirely personal in nature, and he would have had to get the vehicle repaired regardless of whether he was working for VKR or not.

On appeal Verasawmi argued that the use of the vehicle redounded to his employer’s benefit.  He maintained that since he owned VKR, and since he was an employee of the company, he had the sole discretion to decide whether he was engaged in his job duties at the time of the accident. 

The Appellate Division affirmed the dismissal of Verasawmi’s claim.  It noted that the car was registered in Verasawmi’s own name, and he used it for both personal and business reasons. Further, he was returning to his shop, not to a construction site.  The Court said, “… Verasawmi was on a personal errand that he would have had to undertake regardless of whether he was working for VKR.  His action, which involved traveling from Middlesex to Edison and back, was not a minor deviation from any prescribed work duties.” This case is instructive because there are not many New Jersey cases involving the often heard contention that a sole proprietor has complete discretion in determining what is and what is not work related.  Clearly, if one’s boss requires an employee to perform a certain activity, like dropping off a car for repairs, that drive would be work related.  In this ruling the Court rejected the argument of the sole proprietor that he directed himself to perform what he contended later was a work mission.  The Court did not reject the concept of dual capacity, namely that the sole proprietor is both employer and employee, but it rejected the claim because the facts suggested that the vehicle was used for personal reasons and the work being done on the vehicle was fairly routine maintenance. The outcome might have been different if the petitioner had been driving to a construction site instead of returning to his office. The case can be found at Verasawmi v. Vino’s Kitchen Renovations, LLC, A-2273-17T3 (App. Div. April 23, 2019).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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. 

Another bill, House Bill 4300 (authored by Rep. Jim Murphy, R-Houston), would propose allowing lump sum settlements, provided that appropriate provision were made for Medicare set-asides and for taking care of deceased workers’ beneficiaries. 

As those in the Texas workers’ comp system are well aware, Texas does not allow claimants to receive lump sum settlements for medical benefits.  The prohibition has existed since the 1980s, when laws were passed to prevent what many saw as an excess in litigation as well as misuse of settlement funds by workers’ compensation claimants. 

Some employers asked law makers to remove the prohibition on lump sum settlements, so long as the arrangement provided for a Medicare set-aside, the plan was overseen by a corporate trustee or professional administrator, and that any remaining interest on the settlement reverted back to the claimant’s beneficiaries when the claimant died.  Others have criticized the bill, arguing that settlements could result in litigation, particularly if the lump sum turned out not to be large enough to cover a claimant’s long-term care.  Still others were concerned that the money would be used for unnecessary medical treatment, leaving inadequate resources for legitimate treatment.  Ultimately, other businesses, insurance, and some labor interests put up enough opposition against House Bill 4300 to convince legislators not to support it.  Like House Bill 750, the bill has been left pending before the House Business and Industry Committee.

-  Copyright 2019, Erin Hacker Shanley, Stone Loughlin & Swanson, LLP.

Texas is the only state in which employers may “opt out” of the workers’ compensation system.  Most construction contractors have opted out, and testimony taken at the House Business and Industry Committee hearing on April 9 referenced studies showing that only 40% of Texas construction workers are covered.  The number of employers in mining, utilities, and construction that subscribe to workers’ compensation has fallen by half since 2004, to only 17%, according to a 2018 report by the Division of Workers’ Compensation.  And while contractors who opt out expose themselves to tort claims by injured employees, most plaintiffs’ attorneys will not take those cases given most construction companies are not big enough and do not have deep pockets to pay damages. 

House Bill 750 (sponsored by Rep. Armando Walle, D-Houston) proposes to require all construction contractors and subcontractors to subscribe to workers’ compensation insurance.  He says that studies show that construction workers in Texas are four times more likely to be killed at work than in any other industry.  Per the U.S. Department of Labor, Texas had 129 fatal construction injuries in 2017, by comparison to California, which had 69. 

The bill was left pending in committee with no action after the April 9^th hearing, but there is always the possibility that the committee might vote on it at a later hearing.  The Texas Legislature’s House committees have until May 6 to report bills or pass them to the floor for a vote.

 -  Copyright 2019, Erin Hacker Shanley, Stone Loughlin & Swanson, LLP.

The Houston Appeals Court recently found that an insurance carrier was not able to recover subrogation funds from a wife who collected death benefits as the administrator of the deceased’s estate from a third party.  After receiving workers’ compensation death benefits, the children of the deceased filed a wrongful death claim against a third party.  As part of the settlement, the third party agreed to allocate a portion of the funds to the deceased’s estate.  The wife was the administrator of that estate.  The court reasoned the carrier was not entitled to subrogation funds because the wife did not individually recover funds from the third party settlement.  Therefore, the collective-recovery standard did not apply.  Fort Bend County v. Norsworthy, No. 14-17-00520-CV, 2019 WL 1291526 (Tex. App.—Houston [14th Dist.], March 21, 2019).

-  Copyright 2019, Erin Hacker Shanley, Stone Loughlin & Swanson, LLP.

The Appeals Court in El Paso held that, in the absence of a formal judicial or administrative decree, “recovery” from a third party occurs once the funds are actually disbursed, at which point a carrier may suspend benefits payments. Texas Mutual Ins. Co. v. Garcia, No. 08-15-00075-CV, 2019 WL 1467973 (Tex. App.—El Paso, April 3, 2019).  In that case, Texas Mutual stopped paying death benefits when the claimant beneficiaries signed an interim agreement with a third party.  The court found that Texas Mutual improperly suspended benefits before the agreement was funded or executed.  The court noted that Texas Mutual had a duty to continue paying death benefits unless and until the claimant beneficiaries recovered money from the third party.

On April 5, 2019, the Texas Supreme Court held that, while the 45-day deadline to file for judicial review of an Appeals Panel decision is mandatory, it is not jurisdictional-- meaning that judicial appeals from decisions by the Division of Workers’ Compensation Appeals Panel that are filed with the trial court past the 45-day statutory filing deadline do not automatically divest the trial courts of jurisdiction.  The Supreme Court’s decision overrules conflicting decisions from seven different Texas courts of appeals.

On March 17, 2012, Santiago Chicas (Santiago) fell from a ladder, sustaining fatal injuries.  His wife, Berlita Chicas (Chicas), sought workers’ compensation benefits from Texas Mutual, the workers’ compensation insurer for her husband’s employer.  Texas Mutual disputed the claim, and Chicas sought dispute resolution with the Division of Workers’ Compensation.    At CCH, the Hearing Officer found that Santiago was not an employee of the insured at the time of the injury, and therefore, his injury was not compensable.  Chicas appealed to the Appeals Panel.  On January 5, 2015, she was notified that after review by the AP, the Decision and Order was final. 

Meanwhile, and while the administrative proceedings were pending, Chicas filed a wrongful-death suit and then amended her probate-court pleadings, seeking judicial review of the administrative decision. Texas Mutual successfully filed a plea to the jurisdiction.  Twelve days after the probate court dismissed her claims, Chicas sought judicial review of the Appeals Panel decision in District Court. The District Court granted Texas Mutual’s plea to the jurisdiction and dismissed Chicas’ claims.  Chicas appealed.  The Court of Appeals reversed, holding that Tex. Lab. Code Section 410.252(a)’s 45-day deadline for filing for judicial review of the agency’s decision is not a jurisdictional statutory prerequisite, and therefore, the trial court had erred in granting Texas Mutual’s plea to the jurisdiction.  (The Court did not address whether Chicas’ claims were timely, noting that the limitations issue was properly left for resolution by way of a motion for summary judgment.) In an opinion by Justice Brown, the Supreme Court affirmed, holding that Chicas’ failure to file suit before the 45-day deadline did not deprive the District Court of jurisdiction.  In reaching its decision, the Court examined: (1) the plain meaning of the statute, (2) whether the statute contains specific consequences for noncompliance, (3) the purpose of the statute, and (4) the consequences that would result from each possible interpretation of the statute. As part of its analysis, the Court noted that the plain text of the statute did not indicate any legislative intent that the statute be jurisdictional, that the statute did not require dismissal for failure to comply, and that the purpose of the statute was not to deprive courts of jurisdiction in certain cases.  The Court further stated that interpreting the statute as jurisdictional would “leave final judgments vulnerable to attack on the ground that the deadline was not met.”

Bottom line: a party arguing that the 45-day deadline was not met needs to raise and preserve that argument, since such an argument can be waived if not raised properly because it does not go to a court’s jurisdiction to hear the case.

Since Texas Mutual’s plea to the jurisdiction relied solely on argument that the 45-day deadline is jurisdictional, the Supreme Court declined to address argument as to whether the filing deadline is a statute of limitations that would trigger application of the tolling provision in a workers’ compensation appeal.  The case has been remanded to the trial court for further proceedings. Texas Mutual Ins. Co. v. Chicas, No. 17-0501, 2019 WL 1495202, (Tex., April 5, 2019).

After seven weeks of trial, on April 9 a Dallas jury found seven defendants in the Forest Park Medical Center kickback case guilty.  Those convicted are: Dr. Douglas Won, Dr. Michael Rimlawi, Wilton McPherson Burt (co-founder of the specialty surgery hospital), Dr. Shawn Henry (a Fort Worth spine surgeon), Dr. Mrugeshkumar Kumar Shah (a pain doctor), Jackson Jacob (recruiter for Forest Park), and Iris Kathleen Forrest (a nurse).  North Texas prosecutors used a federal law, the Travel Act, to win the bribery and kickback convictions, arguing that the health care workers had attempted to evade federal insurance programs like Medicare to avoid prosecution.

The case involves $40 million in bribery schemes.  Twenty-one individuals were originally charged in the case.  Of those, 10 pleaded guilty prior to trial. Bariatric surgeon Nick Nicholson, MD was acquitted. Also charged is a Texas workers’ compensation claimant attorney Royce Bicklein, who is accused of accepting payment for referring his injured worker clients for medical treatment.  Mr. Bicklein’s case has yet to go to trial. 

By Cortney Lemos-Crawford and Kelsey Paddock

Hanna Brophy Secures a “Take Nothing” in Luis v. WCAB

Click here to review the CCC —> 84 Cal. Comp. Cases 107

Ms. Luis (“Applicant”) sustained an injury on 12/9/2013 while employed by Labor Finders as a bakery assistant. She alleged injury to her lumbar spine, cervical spine, right knee, right upper extremity, bilateral hips, digestive and excretory systems, skin and right hand. Defendant accepted the lumbar spine, cervical spine, right knee, and right upper extremity only. Applicant had sustained at least three prior industrial injuries to overlapping body parts, all of which had resolved by Compromise & Release.

The parties agreed to use Dr. Jeffrey Bernicker as an Agreed Medical Evaluator (“AME”). He evaluated Applicant twice and reviewed 1,800 pages of medical records and prior settlement documents. Ultimately, he concluded that any impairment was the result of the prior industrial injuries. Dr. Bernicker stated, “Rarely throughout my career as a Medical-Legal examiner serving the greater San Diego Workers’ Compensation community (during which time I have issued well over 3000 AME reports) have I encountered a case where there [is] so much evidence supporting extensive apportionment to prior industrial injuries.”

Applicant subsequently alleged an additional injury against Labor Finders from 2015, which was during the period that she was working modified duty due to the 2013 claim. Dr. Bernicker evaluated Applicant for that date of injury as well.  He found that the injury, “either never occurred in the first place or, even if it hypothetically was considered to have occurred, simply represented a mild transient flare-up of the symptoms that have been well documented prior to that date and for which the patient was already under active treatment.”

The matter proceeded to a four-day trial before Judge Ellison at the San Diego Workers’ Compensation Appeals Board (“WCAB”) with Hanna Brophy’s Ms. Lemos-Crawford appearing on behalf of the Defendant. Having relied on the opinions of AME Dr. Bernicker, Judge Ellison ruled in favor of Defendant!

Applicant filed a Petition for Reconsideration arguing that the opinions of Dr. Bernicker were not substantial medical evidence because they were predicated on surmise, speculation conjecture, or guess. Applicant further argued that Dr. Bernicker was biased against her based on her prior work injuries. The WCAB denied Applicant’s Petition for Reconsideration noting that Applicant “mischaracterize[d] the record.”

Applicant then filed a Writ for Review based on the same premise. The District Court of Appeal (“the Court”) denied Applicant’s Petition, noting that it was “[b]ased on the same errors of which Luis complained to the Board.” It emphasized that the Court may only consider whether the “the evidence, when viewed in light of the entire record, supports the Award of the Board.” It may not reconsider the evidence itself. Further, the Court citedPearson Ford v. WCAB (2017) to reiterate that an AME’s opinion should be followed “unless there is good reason to find the opinion unpersuasive, given that the parties typically select an agreed medical evaluator for her expertise and neutrality.” (16 Cal. App. 5th 889, 892).

This case provides further precedent that the opinions of an AME should be followed absent good reason to find the opinion unpersuasive. Defendants should be encouraged to stand their ground when the facts and the law are on their side.

On April 19, 2019, the Alabama Court of Civil Appeals released its opinion in Tuscaloosa County v. Chaka Beville.  In Beville, the employee sought benefits for a wrist injury.  The authorized treating physician assigned a 4% left upper extremity impairment.  The basis of the doctor’s assigned impairment was decreased joint mobility, increased stiffness, and limited grip strength.  Loss of grip strength was not considered since it was expected to improve over time.  After a trial on the merits, the trial court awarded the employee a 60% physical disability to the arm.  Although the employer argued on appeal that the trial court abused its discretion by awarding a physical disability that was fifteen times the impairment rating assigned by the doctor, the Court of Appeals determined that there was substantial evidence to support the verdict.  

My Two Cents

Although the doctor did not offer any impairment rating to the hand, the Alabama Workers’ Compensation Act makes it pretty clear that the scheduled number of weeks for the hand is the appropriate measure for a wrist injury. In both 25-5-1(12) (definitions) and 25-5-57(a)(3)15 (schedule) it states that an amputation between the elbow and the wrist should be considered the equivalent to the loss of a hand.  If you are facing the possibility of a multiplier of 15 or higher, you may be better off arguing the hand over the arm since there is no corresponding impairment rating from a doctor.

About the Author

This blog submission was prepared by Mike Fish, 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 Fish by e-mailing him at mfish@fishnelson.com or by calling him directly at 205-332-1448.

Readers of this blog know that it is extremely difficult for an employee to sue his or her employer or co-employee in civil court.  That was proven again in Johns v. Wengerter, A-2053-17T1 (App. Div. April 1, 2019).

Johns, a City of Linden firefighter, was on duty at the firehouse on November 27, 2015.  He went to use the toilet but when he sat down, he heard and felt an explosion beneath him.  The explosion was caused by a bang snap, which is a small firework that detonates when compressed.  Johns suffered second degree scrotal burns as well as a contusion and a blood blister.

A co-employee, Wengerter, admitted to Johns that he placed bang snaps in various places in the firehouse as a prank.   He also apologized to Johns after the incident.  Later on he denied having done this.  Johns never filed a workers’ compensation claim.  Instead, he sued Wengerter in civil court.  Wengerter defended the suit by raising the exclusive remedy provision of the New Jersey Workers’ Compensation Act.  That provision in N.J.S.A. 34:15-8 renders workers’ compensation the only remedy for injuries to workers arising from their employment, except for rare circumstances.  Johns argued that the claims were not barred because Wengerter was acting outside the scope of his employment.  He also asserted that Wengerter’s actions were intentional.

The trial court dismissed the suit, and Johns appealed.  The Appellate Division reviewed the record and concluded that the trial court’s dismissal of the case had adequate support. It said, “Johns produced no evidence that Wengerter’s placement of the bang snap on the toilet was anything other than an ill-conceived prank or ‘so far a deviation’ from work-related activity ‘as to constitute an abandonment of his employment.’ “

The Court also added that this injury to Johns would be covered under the New Jersey Workers’ Compensation Act as Johns was the victim of horseplay.  “The placement of a bang snap on a men’s room toilet falls within the realm of coworker horseplay intended to startle, but not injure, a coworker despite the unfortunate and unintended result in this instance.”  In evaluating whether this was co-worker horseplay, the Court noted: 1) the actions took place in the workplace; 2) Johns and Wengerter were on duty, and 3) the fixture involved, namely the toilet, was part of the employer’s workplace.

In regard to the argument that Wengerter intended to harm Johns, the Court said that there was simply no evidence in the record to support this assertion.  “There is no suggestion in the record that Wengerter was aware that the particular circumstances of the prank that injured Johns was substantially certain to result in a physical injury.” This case is a useful one for distinguishing horseplay (which is always compensable for the victim) from acts of intentional harm (for which an employee can bring a civil suit).  Proving intentional harm remains extremely rare and difficult in New Jersey, and the plaintiff in this case did not come close.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder 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.