State News

WHEN LATE IS NOT TOO LATE

By Kevin L. Connors, Esquire

“If you are going to do something tonight that you’d be sorry for tomorrow morning, sleep late”, sayeth Henny Youngman.

This is the story of the “Late Answer” to a Claim Petition that was not, just that, late.

In Patrick Washington v. WCAB (National Freight Industries, Inc.), the Commonwealth Court affirmed the Decisions of the Appeal Board and Workers’ Compensation Judge, denying the Claimant’s Claim Petition, in the course of which both the WCJ and Appeal Board dismissed Arguments by the Claimant that the Employer/Insurer’s Answer to a Claim Petition had been filed late, such that the Claimant, through counsel, sought to enforce a “Yellow Freight” Motion, under Section 416 of the Act.

Section 416 of the Act, sets forth:

“Within twenty days after a copy of any Claim Petition or other Petition has been served upon an adverse party, he may file with the department or its Workers’ Compensation Judge an Answer in the form prescribed by the department.

Every fact alleged in a Claim Petition not specifically denied by an Answer so filed by any adverse party shall be deemed to be admitted by him.  But the failure of any party or of all of them to deny a fact alleged in any other Petition shall not preclude the Workers’ Compensation Judge before whom the Petition is heard from requiring, of his own motion, proof of such fact.  If a party fails to file an Answer and/or fails to appear in person or by counsel at the hearing without adequate excuse, the Workers’ Compensation Judge hearing the Petition shall decide the matter on the basis of the Petition and evidence presented.”

Under a legion of Decisions involving Late Answers, and what to do with them, the controlling rule for Late Answers has always been, underYellow Freight v. WCAB (Madara), 423 A.2d 1125 (Pa. Cmwlth. 1981), that an Employer’s failure to file a timely responsive Answer to a Claim Petition, precludes the Employer from raising affirmative defenses to the Claim Petition, effectively resulting in a default being taken against the Employer, with all allegations in the Claim Petition being deemed admitted before the WCJ, although an unexcused Late Answer only admits “facts”, and does not admit any conclusions contained within the Claim Petition, with the fact admissions only being imposed as of the last date that the Answer could have been filed, underBensing v. WCAB (James D. Morrissey), 830 A.2d 1075 (Pa. Cmwlth. 2003).

The caveat to the above rule, is that when a Claim Petition alleges ongoing disability, a rebuttable presumption exists that the disability continued beyond the last day that the Answer could have been filed, requiring the Employer, in that scenario, to present rebutting evidence, in order to overcome the presumption of ongoing disability. Chik-Fil-A v. WCAB (Mollick), 792 A.2d 678 (Pa. Cmwlth. 2002).

So what is the big deal about the Washington ruling by the Commonwealth Court, a ruling that the Court issued on March 4, 2015.

Washington involved a Claimant employed by NFI, our client, who had worked as a Tractor Trailer Driver from 2007 through February of 2011.

In February 2009, the Claimant had been involved in an automobile accident unrelated to his employment with NFI, with the Claimant then pursuing a personal injury lawsuit against the driver of the vehicle that rear-ended the Claimant’s vehicle.

After missing a few days of work after the 2009 accident, the Claimant actually returned to work in a full-duty capacity with NFI, again returning to work as a Tractor Trailer Driver.

In 2011, the Claimant then stopped working for NFI, contending that he was no longer able to do his job because of pain in his shoulders, arms and hands, the same injuries, bizarrely, that the Claimant had alleged occurred as a result of the 2009 motor vehicle accident.

Undeterred by that coincidence, the Claimant filed a Claim Petition against NFI, alleging that he was entitled to recover workers’ compensation benefits as of the date that he stopped working for NFI, with the Claimant seeking both indemnity and medical compensation benefits.

The theory behind the Claimant’s Claim Petition against NFI was a repetitive trauma/aggravation theory, that the Claimant’s repetitive use of his neck, shoulders, arms, and hands, resulted in the Claimant developing an aggravation of his pre-existing accident-related injuries, with the Claimant alleging that he was now disabled by the alleged aggravation, such that he claimed entitlement to workers’ compensation benefits.

However, the Claim Petition filed by the Claimant contained an incorrect address for the Employer, as the Claimant’s Petition alleged an address of 72 West Park Avenue, in Vineland, New Jersey, although the Employer’s correct address was 71 West Park Avenue, Vineland, New Jersey.

After the Claimant’s Claim Petition was assigned to a WCJ, the Employer, yes through our firm, filed an Answer to the Petition, although it was forty-three (43) days after the Bureau had issued a Notice of Assignment, assigning the Claimant’s Claim Petition to a Workers’ Compensation Judge.

Over the course of Evidentiary Hearings held before the WCJ, the Honorable Joseph Stokes, the Claimant continued to argue that the Employer’s Answer was late, and that the factual allegations in the Claim Petition should be deemed admitted underYellow Freight, with the Claimant seeking an Order admitting the factual allegations set forth in the Claim Petition.

Although the Claimant referred to having made several Motions to impose the Draconian burden ofYellow Freight, the record contained no specific reference to a formal Motion being filed by the Claimant, nor did the issue appear to have been raised on the record at several hearings, at least until the final hearing before the Workers’ Compensation Judge, with the WCJ directing the parties to Brief the issue of whether the Employer’s Answer was, or was not, untimely, absent the parties agreeing to the issue.

Although there is no indication that the Claimant ever Briefed that issue for the WCJ, there was a Stipulation placed on the record that the Employer’s address was not the address on the Claim Petition, with the WCJ ultimately issuing a Decision denying the Claimant’s Claim Petition, finding that the Claimant’s testimony, as well as that of his Medical Expert, Dr. Scott Jaeger, was credible in terms of establishing that the Claimant had symptoms and injuries from his non-work-related accident, with the WCJ rejecting the Claimant’s testimony, and that of his Medical Expert, as to whether the Claimant’s work duties for the Employer, from 2009 through 2011, resulted in the Claimant having an aggravation of his non-work-related conditions.

So holding, the WCJ concluded that the Claimant had failed to establish his burden of proving that he was suffering from a work-related disability, with the WCJ never formally ruling on the Claimant’s Late Answer contention.

Appealing to the Appeal Board, the Claimant argued that the WCJ’s Decision contained a legal error, in failing to rule on whether the Employer’s Answer was late, with the Appeal Board affirming the WCJ’s denial of the Claim Petition, in the course of which it held that the Claimant had failed to show that the Employer’s Answer was late, as the Claim Petition had not been mailed to the Employer’s correct address, with the Appeal Board denying the Claimant’s request to remand the case back to the WCJ, to submit additional evidence concerning the address to which the Bureau had mailed the Claim Petition.

Addressing the Claimant’s Late Answer Appeal, the Commonwealth Court held that the Claimant had failed to prove that the Employer’s Answer was untimely, as it was undisputed before the WCJ, that the address used by the Bureau when mailing the Petition to the Employer was not the Employer’s correct address.

Applying the common law “mailbox rule”, akin to “the check is in the mail”, as well as the mandates of the Act, both of which dictate that a proof of mailing raises a presumption that the mailed item was received only if it is shown that the item was mailed to the parties’ correct address, the Appeal Board affirmed the WCJ’s Decision.  Section 406 of the Act:  In Re:  Rural Route Neighbors, 960 A.2d 856 (Pa. Cmwlth. 2008).

Sweetly stated, the “common law ‘mailbox rule’ raises a natural presumption that a letter will reach its destination through due course of mail when it is deposited in the Post Office with a properly-addressed letter with pre-paid postage”,  underStorer v. WCAB (ABB), 784 A.2d 829 (Pa. Cmwlth. 2001), in which the Commonwealth Court had held that a Claimant’s testimony that he mailed a letter, did not establish that notice was given where his testimony did not show,inter alia, “whether the letter was properly addressed”.

In Washington, the Commonwealth Court held that “under the Act, only a mailing to the parties’ correct address constitutes service on the date of mailing.”  Conversely, where a Claim Petition is mailed to an incorrect address, an Answer is not untimely simply because it was filed more than twenty days after that mailing, and Section 416 of the Act does not bar the Employer from denying and fully contesting all allegations of the Claim Petition, absent other evidence or proof that the Claim Petition was received more than twenty days before the Answer.

In Washington, the Bureau’s mailing to an incorrect address did not constitute service as to the date of mailing, and, therefore, there was no evidence submitted to the WCJ that the Employer had received the Claim Petition more than twenty days before filing its Answer, thereby allowing the WCJ to decide the Claim Petition on its merits, without deeming that any facts alleged in the Claim Petition had been admitted by the Employer.

An alternative Argument advanced by the Claimant was further rejected by the Commonwealth Court, in as much as the Claimant contended that the error in the mailing address of the Claim Petition should have been disregarded, as the Claimant alleged that the address to which the Claim Petition was addressed was a property allegedly owned by an Affiliate of the Employer, with the Commonwealth Court rejecting Claimant’s Argument for two big reasons, one being that no evidence was presented to the WCJ to prove the Argument being made by the Claimant, further rejecting the Argument on grounds that the service of a document on an address owned by an Affiliate of a Corporation, does not, in and of itself, constitute service on the Corporation itself underDelaware Valley Surgical Supply Company v. Geriatric & Medical Centers, 299 A.2d 237 (Pa. 1973).

The mere fact that one piece of mail sent to an erroneous address successfully reached a party after it knew that its mail was being sent to that address does not, again, in and of itself, support an inference that all mail sent to the erroneous address was promptly received by that party.

What are the takeaways from the Washington ruling?

First, and most obvious, is the takeaway of how well this case was defended by our firm.

No less true, without question, counsel defending workers’ compensation claims are never fans of the “Late Answer” Claim Petition, as the slippery slope of defending workers’ compensation claims only becomes that much steeper, when the issue of a potential Late Answer also becomes yet another element that needs to be defended in the course of seeking to prevent a claim from being accepted.

This becomes even more problematic in cases where the Employer has real defenses to the Claim Petition, with the most dramatic defenses being:

·                     Statute of Limitations;

·                     Notice Issues;

·                     The Claimant was not employed by the alleged Employer;

·                     The Employer is not insured by the Insurer listed on the Notice of Assignment;

·                     The Claimant is not disabled;

·                     The Claimant has no evidence to support any element of his claim;

·                     The alleged injury did not occur within the course and scope of employment;

·  &nnbsp;                  The alleged injury was caused by non-work-related conditions; and/or,

·                     The Employer/Insurer have been incorrectly designated.

An obvious takeaway is that an address is either correct, or incorrect, and that there is no presumption of receipt of an item that is improperly addressed, even if the mailed item is not returned to the Bureau, or is sent to an address physically close to the Employer’s actual location.

Obviously, this is an important Decision for Employers and Insurers, and we certainly encourage its utilization in the course of defending Late Answers to Claim Petitions.

A link to the Commonwealth Court’s Decision is included here http://www.pacourts.us/assets/opinions/Commonwealth/out/1070CD14_3-4-15.pdf?cb=1

Credit for winning this case for our client goes to Jeffrey Snyder, a Partner in our Workers’ Compensation Practice Group. 

Jeff, cheers!

ConnorsO’Dell LLP

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

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout  Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling 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 Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

By:

Robert F. Horn, Esquire

Yes, Domtar was our firm’s case, in which we represented our clients, Liberty Mutual and Schneider National, seeking to perfect our clients’ independent right of subrogating their workers’ compensation lien against the third-party tortfeasor that caused injuries to Schneider’s employee, resulting in workers’ compensation benefits being paid to its employee, George Lawrence.

As lead counsel for this case, which has been followed both locally and nationally by employers and insurers, the April 27, 2015 3-2 Majority Opinion of the Pennsylvania Supreme Court, in an opinion authored by Justice Baer, is a very disappointing result, both professionally and personally, given the stakes presented as well as the time and energy expended in its pursuit.

Disappointed though we are, we remain confident that this was an issue incredibly important to pursue, with the Supreme Court’s Decision potentially opening the door for framing future subrogation lien recovery cases, under a “use-Plaintiff” procedure, as opposed to the procedure used in Domtar, being a “as subrogee of” procedure.

With disappointment comes future insight.

The Domtar case involved the Pennsylvania Supreme Court being asked to address a question raised inFrazier v. WCAB (Bayada Nurses, Inc.), 52 A.3^rd at 248 (2012), with the Supreme Court having granted our Petition for Allocatur to address the issue framed below:

·         Does Section 319 of the Pennsylvania Workers’ Compensation Act, 77 P.S. § 671, allow an employer/insurer to step into the shoes of an injured employee to subrogate against the negligent tortfeasor causing the injuries resulting in the payment of workers’ compensation benefits?

That question was taken directly from the Pennsylvania Supreme Court’s Decision inFrazier v. WCAB (Bayada Nurses, Inc.), 52 A.3d at 248 (2012), with the Pennsylvania Supreme Court having granted our Petition for Allocatur in reliance upon our usingFrazier to frame the appellate question.

The ruling issued by the Supreme Court on April 27, 2015 limits employers and workers’ compensation insurers from pursuing a direct right of subrogation against a third-party tortfeasor when the injured employee, who has received workers’ compensation benefits but takes no direct action against the tortfeasor from the employer or workers’ compensation insurance carrier directly suing  the negligent tortfeasor, absent the action being filed as an “in the name of” case.

This case arose as a result of our client’s employee, George Lawrence, sustaining work-related injuries while working as a driver for Schneider National on December 13, 2009.  Lawrence’s injuries resulted from Lawrence falling in a parking lot leased byDomtar, with Schneider’s workers’ compensation insurance carrier, Liberty Mutual, being forced to pay workers’ compensation benefits, as a result of the negligence of the tortfeasor against whom we sought to recover Liberty/Schneider’s subrogation lien for the workers’ compensation benefits paid to Lawrence.

When Lawrence did not elect to file a lawsuit on his own, and never responded to several requests to cooperate with Schneider or Liberty, to allow Schneider and Liberty to pursue a subrogation claim directly  againstDomtar, a Writ of Summons was filed against Domtar by our office, serving as Pennsylvania counsel for Schneider in defense of its workers’ compensation claims.

Despite repeated efforts to secure Lawrence’s direct involvement in the lawsuit, Lawrence never stepped forward to participate, and a Complaint was then filed againstDomtar on behalf of Schneider and Liberty, seeking recovery of the workers’ compensation benefits that had been paid during the pendency of Lawrence’s workers’ compensation claim, with the subrogation lien totaling $33,929.23.

The subrogation principle is simple enough, directly tracking Section 319 of the Act, which sets forth:

“Where the compensable injury is caused in whole or in part by the act or omission of a third-party, the employer shall be subrogated to the right of the employe[e], his personal representative, his estate or his dependents, against such third-party to the extent of the compensation payable under this article by the employer; reasonable attorney’s fees and other proper disbursements incurred in obtaining a recovery or in effecting a compromise settlement shall be prorated between the employer and employe[e], his personal representative, his estate or his dependents.  The employer shall pay that proportion of the attorney’s fees and other proper disbursements that the amount of compensation paid or payable at the time of recovery or settlement bears to the total recovery or settlement.  Any recovery against such third person in excess of the compensation  theretofore paid by the employer shall be paid forthwith to the employe[d], his personal representative, his estate or his dependents, and shall be treated as an advance payment by the employer on account of any future instalments of compensation.”

Following service of the Complaint on Domtar, Domtar, through counsel, filed Preliminary Objections to the Complaint, demurring to the Complaint, contending that the workers’ compensation insurance carrier did not have an independent right to seek subrogation directly against a third party tortfeasor, in the absence of the injured employee being involved in the prosecution of the subrogation claim and action.

The Preliminary Objections were initially granted by the Trial Court, with the case then being appealed to the Superior Court. 

Granting Domtar’s Preliminary Objections, the Trial Court relied upon the Pennsylvania Superior Court’s Decision inReliance Insurance v. Richmond Machine Company, 455 A.2d 686 (Pa. Super. 1983), holding that only the injured employee, and not the employer/insurer, has a right of direct action against the third-party tortfeasor in a recovery predicated on negligence.

With the Trial Court concluding that the employer and insurer did not have an independent right to sue the third-party tortfeasor without intervention and involvement by the injured employee, Liberty Mutual filed a timely appeal of the Trial Court’s granting of Preliminary Objections to the Pennsylvania Superior Court, arguing that Section 319 of the Pennsylvania Workers’ Compensation Act provided an absolute right of subrogation for benefits that had been paid to Lawrence, and that the mere fact that Lawrence had not elected to bring his own action against the Defendant should not bar Liberty Mutual and Schneider National from perfecting their subrogation rights under Section 319 of the Act.

Before the Superior Court, Liberty Mutual and Schneider National relied upon the Pennsylvania Supreme Court Decision inScalise v. F. M. Venzie and Company, 152 A.90 (Pa. 1930), in which the Supreme Court had held “that the employer is not to be denied his right of suit because the employee does not sue, but may institute the action in the latter’s name.” Scalise, 152 A. at 90.

In 2013, the Superior Court affirmed the Trial Court’s order granting Domtar’s Preliminary Objections, rejecting Liberty Mutual’s contention that Section 319 of the Act, as well as the dictum from theScalise decision, permitted Liberty Mutual and Schneider National to separately pursue their subrogation claims against the third-party tortfeasor, when Lawrence, as the injured employee, took no direct action of his own. 

Moreover, the Superior Court ruled that “Section 319 does not provide employers with the ability to bring suit directly against a third party”, ruling “the action against the third party tortfeasor must be brought by the injured employee … i.e. the employee-victim must sue, and the employer’s carrier is subrogated to the employee’s claim”.  Liberty Mutual, 77 A.3d at 1288-89.

Boldly going where none had gone before, we successfully secured allocatur before the Supreme Court, to seek clarification of an issue critical to our clients, being preservation of their subrogation rights under Section 319 of the Act.

And yes, we believe strongly in our clients’ subrogation rights, as well as believing that there was sufficient confusion from prior subrogation cases that appellate clarification was absolutely necessary, notwithstanding the Supreme Court’s clearly divided decision in Domtar denying our clients’ “day in court”, constituting in baseball terminology, a third strike, low and at the knees, and a little at the edge of the plate, in terms of actually clarifying not only the existence of the right, but also the procedural mechanics in terms of how clients can effectively perfect their subrogation lien rights, as we are now headed to the dugout, scratching our heads, asking what could have been done differently to turn a 3-2 majority opinion against our clients into an affirmation of subrogation rights that have consistently been described, in innumerable appellate decisions, as being both “absolute” and “primary”, dating since the dawn of compensation legislation and litigation.

Keep in mind that 47 of the 50 States in the “I would never choose to live anywhere else” United States, have workers’ compensation statutes permitting the employer or insurance carrier to independently seek recovery of their subrogation lien claims against third-party tortfeasors responsible for causing the work-related injuries resulting in the payment of workers’ compensation benefits to injured employees, with Pennsylvania being one of only three jurisdictions in the United States which does not have such a right of recovery, adding fuel to the flames of “if you thought we asked the right question”, which is why you granted Allocatur in the first place, why then the harsh grade school ruler across the knuckles, that arriving at the prom without a date meant the retraction of dance privileges.

Yes, this was a fight worthy of its tortured course.

Did we prevail?

Trick question!

The answer being it depends upon what the meaning of “is” actually is, and thank you Bill for that illusion.

Interpreted by the Pennsylvania Supreme Court, in a decision in which three of the five sitting Justices have denied our relief, with two Justices dissenting on “are you kidding me” grounds, the answer to the question we posed is, well, it depends.

Seemingly, the only thing wrong with our case was that we could not:  (1) secure the agreement of Lawrence to be involved in the litigation; and (2), that we designated the case as a case of “as subrogee of”, instead of “in the name of”, or, alternatively, “in the use of”, distinctions which technically and procedurally change nothing in terms of the actual parties involved in the case, although the majority opinion does lay the ground work for what we think needs to happen in the future, in terms of how subrogation lien claims can be perfected in the course of seeking recoveries against responsible third-party tortfeasors.

Before we go there, the two dissenting opinions, by Justices Saylor and Todd, clearly suggest that this is “much ado about nothing”, with credits to Shakespeare, as both dissenting opinions evidence the majority opinion having failed to address the question that was posed to the Supreme Court in the course of allocatur being sought, being that subrogation, by its very nature, involves the act of stepping into another party’s shoes, in order to perfect the right that rightfully should be held, and, broadcast from the highest elevation, by the party actually paying for the third-party tortfeasor’s negligence, being the insurance carrier that files suit “as subrogree” of the injured party, whether it be in the context of workers’ compensation claims, or in any other context, as the injured party, compensated through insurance proceeds becomes the foil through which the negligence of a third-party tortfeasor becomes exposed.

Whether this right is perfected through the designation of “as subrogee of”, or “use-Plaintiff”, is a procedural issue that needs to be addressed by the Pennsylvania Supreme Court Civil Procedural Rules Committee, for study and recommendations, as correctly noted in the Dissenting Opinion of Justice Todd, believing this to be the criticaljudicial coding of the Domtar Decision.

Without plodding ad nauseum through the majority opinion authored by Justice Baer under which we were so impolitely turned away from a home plate seemingly within reach, potentially attainable had there been clearer precedent in terms of how to caption the case suit, who should be designated as parties, and the necessary procedural mechanics, there having been none, although there is, by extension ofDomtar, at least in terms of the dissenting opinions and negative extrapolation of the Majority’s Opinion, some clear indicia of how to proceed in future subrogation lien recovery cases yet to be filed, with the following recommendations being made:

·         First, it seems clear that any future action, needs to be filed as “to the use of”, with the caption being “John Doe, to the use of, ABC Insurance Co.”, which has yet to write any insurance policies in Pennsylvania, but which would, if retaining our firm to perfect its subrogation lien rights, file a Complaint, as just captioned;

·         This recommendation is necessary, as the Domtar Court has not explained the distinction between “as subrogee of”, as opposed to “to the use of”, and since English has always been a second language for us, it is, therefore, necessary to consider this as a lesson learned;

·         It is probably also necessary that the injured employee be served with a copy of the Complaint to be filed, as well as securing an Affidavit of Service on the injured employee, with it making sense to also serve the injured employee with a 30 day notice letter of your intent to file a “use” action, similar to procedural guidelines that have been established in states that have much more detailed procedural mechanics embedded in their workers’ compensation subrogation lien statues, such that everyone knows what to do, as well as when to do it;

·         It probably also makes incredible sense to incorporate a 30 day notice letter into the actual Complaint being drafted and filed, so that any attack by the defense bar, using Preliminary Objections to strike the pleadings, would be able to survive Preliminary Objections based on a demurrer to the Complaint, as then there is procedural evidence that the injured employee has consented, or at least failed to object, to the action being initiated, begging the question as to how involved the injured employee will need to be in the course of the claim being litigated against the third-party tortfeasor, for recovery of the subrogation lien; and,

·         It is also suggested that an assignment be taken from the injured employee, allowing the employer and/or insurance carrier to pursue the civil subrogation lien claim, on behalf of the injured employee, as well as in the “use of” the injured employee, for purposes of negating Preliminary Objections being granted in the nature of a demurrer to a complaint seeking recovery of a subrogation lien on behalf of an employer or insurance carrier for workers’ compensation benefits paid as a result of the negligence of a third-party tortfeasor.

Obviously, we anticipate the Supreme Court’s ruling in Domtar to generate significant press, necessitating that this decision be carefully analyzed in terms of what it might mean for the future of subrogating, in the course of seeking to perfect the subrogation lien rights of workers’ compensation carriers and employers that have paid workers’ compensation benefits because of the negligence of third-party tortfeasors, in order to prevent the third-party tortfeasors from escaping liability for work-related injuries resulting in the payment of workers’ compensation benefits that might otherwise not have been payable, but for the negligence of a third-party.

ConnorsO’Dell LLP

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

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling 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 Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

At a hearing, an ALJ found that Job Finders was the claimant’s employer in light of the fact that they did not timely answer the Claim for Compensation.  In other words, the ALJ found that whether an entity is an employer is a fact deemed admitted if the Answer is untimely.  Additionally, the ALJ found that the University of Missouri was a statutory employer because the University entered into a contract to obtain the claimant’s temporary employment, the University directed what he would do each day, supplied his uniform and had the right to terminate his employment.  Thus, the ALJ found that the University of Missouri and Job Finders were co-employers but in light of the fact that Job Finders did not have workers’ compensation coverage, imposed liability against the University of Missouri.  However, the ALJ did find that the University of Missouri was entitled to one-half of the total Award for permanent partial disability and unpaid medical expenses in contribution from Job Finders. On appeal, the Commission affirmed.

Fund Not Responsible For PTD Because Claimant’s Subsequent Injury Was Not Related to Work Accident

In Chambers v. Missouri Department of Highways & Transportation, Injury No. 07-124759,the claimant injured his neck and subsequently developed right arm, upper and lower back symptoms at work. He also had several pre-existing injuries. As a result of the work injury, he developed a small disc protrusion at C6-7 and a tiny herniation at C5-6.  He received authorized treatment with Dr. Coyle who treated him conservatively with injections and physical therapy and placed him at MMI on February 27, 2008, with respect to his low back.  In August  2008, for reasons not explained in the Award, the claimant returned to Dr. Coyle who recommended an MRI of the lumbar spine, which showed a tethered cord at L3 and a protrusion at L5-S1, which the doctor stated were not causally related to the work injury. Dr. Musich, the claimant’s expert, stated in his report that the claimant’s condition at L3-4 “could” have been caused by his work injury. Ms. Gonzalez provided a vocational evaluation at the claimant’s request on December 27, 2011 stating that the claimant was currently unable to compete on the open labor market, but did not specify as to when the claimant became unemployable. 

At a hearing, an ALJ found that the claimant sustained a work injury to his neck, right arm and back.  Dr. Musich merely found that the claimant’s subsequent L3-4 condition “could” be work related whereas Dr. Coyle explicitly stated that the condition was not work related.  Therefore, the ALJ found Dr. Coyle more credible and did not find the employer/insurer liable for the claimant’s L3-4 condition. The ALJ imposed permanent partial disability liability on the Fund for the claimant’s pre-existing conditions but did not award permanent total disability benefits.

Employer Responsible for Disc Bulge While Claimant Was Working For Them But Not Responsible For Herniation Two Years After Claimant Left Work

In Harris v. Penske Truck Leasing Co., Injury No. 11-110474, the claimant alleged an occupational disease to his neck as a result of his repetitive job duties with operating a fork truck which required him to look over his right shoulder 75 to 85% of each work day. An MRI in 2012 showed a disc bulge at C4-5. The claimant stopped working for the employer in 2012. Two years later, an MRI in 2014 showed a disc herniation at C4-5. The claimant obtained a report which connected a disc bulge at C4-5 to his work but did not connect the herniation.  Specifically, his expert found the disc bulge was work related because the claimant put mechanical pressure on his neck by repeatedly rotating it to the right, which narrowed the foramina on the right side of his neck and developed the disc bulge.

Conversely, the employer/insurer obtained a report which stated that the claimant’s neck conditions were not work related. The employer/insurer’s expert stated that looking backwards is a normal movement and therefore, cannot be the cause of the claimant’s neck condition. The employer/insurer’s expert specifically addressed the herniation and stated that given that the claimant stopped working in August of 2012, it was not work-related. At a hearing, an ALJ found in favor of the claimant and imposed liability for a disc bulge at C4-5 but not for a herniation.  Therefore, the ALJ found the employer/insurer responsible to provide treatment to cure and relieve the disc bulge, but not the herniation.  On appeal, the Commission summarily affirmed.

Employer Responsible for PTD After Claimant Worked 38 Years As Electrician and Unable to Return to Electrical Work Due To Lifting Restrictions

In Maloney v. Alpha Energy & Electric, Inc., Injury No. 10-048928, the claimant was injured at work when he was working on a receptacle box and was shocked by hot wires. The claimant had a high school education and completed vocational training as an electrician. His entire 38 year career had been spent working as an electrician.  Following the work injury, Dr. Hess performed a cervical discectomy and fusion from C5-6 to C6-7.  Thereafter, the doctor placed the claimant in the medium category for physical restrictions.  The claimant then obtained a report from Dr. Stuckmeyer who gave lifting restrictions of 20 pounds, no working overhead with either arm, and no extending his neck beyond the neutral position.  Mr. Cordray provided a vocational evaluation stating that the claimant could not return to work as an electrician, that his electrical skills did not transfer to other occupations, and that he was too old to be retrained. At a hearing, an ALJ found that the claimant was PTD as a result of the work injury.  On appeal, the Commission summarily affirmed.

Video Surveillance Not Admissible at Hearing Since Employer Did Not Comply With Continuing Request For Production

In Burlison v. Department of Public Safety, Injury No. 09-065236, the claimant sustained a work-related injury to her shoulder when a patient grabbed and twisted her arm. At a hearing, the claimant was found to be PTD as a result of the RSD in her arm. At the hearing, the employer/insurer did attempt to submit into evidence video surveillance which was taken of the claimant but the ALJ refused to consider that evidence in light of the fact that the video surveillance footage was never provided to the claimant’s attorney. The claimant’s attorney had previously sent a Notice of Deposition to the employer’s superintendent and the notice included a request for statements and any video taken of the claimant. The employer/insurer did not have any video at the time of the request and argued it did not have to produce the video since the video was not received until after the request had been made. The ALJ disagreed and stated the claimant’s attorney can request surveillance pursuant to a civil rule despite the fact that the workers’ compensation statute does not apply to videos. In this case, the claimant’s attorney did not forward a Subpoena Duces Tecum to the superintendent which is required by the civil rule, but the superintendent voluntarily appeared for the deposition and therefore, had a duty to produce any videos. While the superintendent may not have had the video at the time of the deposition, there is a continuing duty to produce video, so once the employer obtained the video, they were required to provide the claimant’s attorney the same.

Employer Responsible For PTD Benefits Because Claimant Was PTD Before Second Work Injury

In McDonald v. Midland Radio Corporation, Injury No. 07-106174, the claimant sustained injuries on May 22, 2007 and June 23, 2007. On May 22, 2007 the claimant fell over a cart containing boxes, and tore her left rotator cuff. The claimant requested medical treatment but it was not provided and she continued to work without accommodations until her June 2007 injury. On June 23, 2007 the claimant was lifting a radio when she sustained a partial rotator cuff tear of the left shoulder. Authorized treatment was then provided and the claimant eventually underwent surgery. She also sought psychiatric treatment and Dr. Hill diagnosed her with depressive disorder and generalized anxiety disorder, for which her May 22, 2007 accident was the prevailing factor. Conversely, Dr. Hughes, the employer/insurer’s expert, believed that the claimant’s depression disorder and generalized anxiety disorder were caused by a genetic component and not related to either of the work accidents. Specifically, Dr. Hughes diagnosed a pain disorder but believed that condition was caused by the claimant’s inner drive to remain disabled rather than to any actual physical injury. The claimant had an eighth grade education, low academic skills and had flunked the GED on several occasions. She worked the majority of her career in unskilled positions. At a hearing, the ALJ found that the claimant’s left shoulder condition and her psychological conditions were a result of her May 22, 2007 accident, and rendered her PTD. In light of the fact that the ALJ found that the claimant was rendered PTD as a result of the May 2007 accident alone, PTD liability was imposed solely against the employer/insurer and no liability was imposed on the Fund. On appeal, the Commission affirmed.

Unexplained (Idiopathic) Fall Compensable When Nature of Employment Causes Risk to Claimant

Gleason v. Treasurer of Missouri, Case No. WD77607 (Mo. App. Ct. 2015)

FACTS:  The claimant fell from the top of a railcar he was inspecting sustaining injury to his head, neck, right shoulder, clavicle and ribs.  The claimant had no memory of the circumstances leading up to the fall, the fall itself or the three days after the fall when he was hospitalized.  In other words, the claimant could not explain why he fell.

The claimant settled his claim against the employer/insurer and the Stipulation stated that he sustained a compensable injury in the course and scope of his employment.  The claimant then proceeded to a hearing and sought benefits from the Second Injury Fund.  At a hearing, the ALJ stated that because the claimant could not explain why he fell, the matter was not compensable as he could not prove that his injuries came from a risk or hazard which was related to his employment and which he was not equally exposed to normal non-employment life.  On appeal, the Commission affirmed.  The claimant appealed pro se.

HOLDING:  On appeal, the Appellate Court reversed and remanded the decision. Specifically, the Court noted that although the claimant could not explain why he fell, it was a known fact that his work exposed him to the risk of falling from a railcar, which is the activity that caused his injuries.  The Court further noted that such a risk is not one that he would have been exposed to in normal non-employment life.  Specifically, the Court stated that the focus is not on what the claimant was doing when he suffered his injuries, but rather should be what was the “risk source” of his injury.  While the claimant could not explain what activity he was engaged in when he fell, the Court found that he did satisfy his burden of showing that his “risk source,” falling from a railcar, was what caused his injuries and was a risk he was not equally exposed to in his normal non-employment life. The Court also looked to prior case law and distinguished this case fromMiller and Johme. In Miller, the claimant’s knee popped while crossing the street to his truck and inJohme the claimant fell off of her shoe. The Court stated that in those two cases, the claimants’ injuries stemmed from activities to which they would be equally exposed in non-employment life whereas in this case, the claimant was exposed to falling off a railcar, which is a risk he would not be equally exposed to in non-employment life. Therefore,Miller and Johme were correctly decided as non-compensable cases whereas this instance involved a compensable injury.

Of note, the Second Injury Fund argued that unless claimants are required to prove why they fell, then recovery for idiopathic injuries will be available.  The Court disagreed with that argument and stated that idiopathic injuries can be raised as an affirmative defense to bar compensability.  In other words, once the claimant has met his burden of proving that he sustained an injury in the course and scope of his employment, the employer/insurer or Fund can then raise the affirmative defense that the claimant’s injury was idiopathic.

Editor’s Note: The Court appears to be stating that if the claimant was injured by a risk to which he was not equally exposed to in normal non-employment life (e.g, falling off of a train car) then he does not need to explain why or how the injury occurred but if there is a question as to whether the claimant’s injury stemmed from a risk to which he was equally exposed in non-employment life (e.g, walking down the street) then he does need to explain why or how the injury occurred.

Claimant’s Fall Down Steps Not Compensable

In Cotter v. Nitelines USA, Inc., Injury No. 12-046083, the claimant worked on occasion at the VA Hospital. The claimant testified that on April 29, 2012, his date of injury, he worked from 4:00 P.M. to midnight. He testified his shift had ended and he was leaving the VA Hospital and walking to the parking lot area (which was not owned by the employer) to return home. While descending the staircase of the parking lot, the claimant testified that he missed a step because it was dark. He fell and fractured his left ankle. 

At a hearing, the claimant was confronted with evidence that it was 4:00 P.M. when he left the VA Hospital on his date of injury and he conceded it would not have been dark at that time. The ALJ denied compensability on several grounds. First, the ALJ held that because the claimant injured himself after he had completed his shift, that his injury did not occur “during a single work shift” as required by Statute. Additionally, the ALJ found that the extension of premises doctrine did not apply in this case, because the claimant fell in a parking lot which was not owned or controlled by the employer. Finally, the ALJ found that the claimant’s fall on the steps was a risk to which he was equally exposed in his normal non-employment life.

On appeal, the Commission affirmed but largely disagreed with the ALJ’s reasoning. First, the Commission stated that the claimant does not necessarily have to be on the clock to sustain a compensable accident. Second, the Commission stated that the extension of premises doctrine may be available to employees, such as the claimant in this case, who are working on a temporary or loaned basis at a premises other than that of their immediate employer. The Commission stated that an employee whose work entails travel away from the employer’s primary premises is considered to be in the course of employment during the trip except when on a distinct personal errand. The Commission did state that when employees are working on a temporary or loaned basis at a premises other than that of their immediate employer, the application of the extension of premises doctrine would be more complicated, but the Commission did not definitively state whether the extension of premises doctrine would in fact apply to such instances. However, the Commission affirmed on the basis that the claimant was confronted with time sheets he filled out and he agreed on cross-examination that it would not have been dark at 4:00 P.M. when he was descending the steps. Additionally, the Commission noted that there is no mention of a workplace injury or any fall on a stairway in the claimant’s earliest medical treatment records. Therefore, the Commission affirmed and compensability was denied

Claim Denied Because Claimant Could Not Identify Specific Activity that Caused His Injury

In Barrientos v. Ben Hur Construction, Injury No. 10-108268, the claimant was an iron worker in charge of a project to build a mezzanine.  In order to accomplish the job, he was required to manually move all construction materials into the building.  He stated that he had some pain in his low back for at least one week leading up to December 28, 2010 but had no leg pain.  On December 28, 2010, the alleged date of injury, he was cutting screens all day, which required lifting and twisting. He completed the task without feeling anything out of the ordinary in his back or legs.  However, he then went home, went to bed and woke up in the middle of the night with excruciating pain in his back and left leg.  He was seen at St. John’s Mercy Medical Center on December 29, 2010 and it was noted that his “pain was associated with no known injury (iron worker so does lots of heavy lifting at work but no specific event).”  In his deposition, the claimant testified that he could have injured his back by erecting the steel, doing everything by hand, unloading the truck, or moving the steel into the building by hand.  At a hearing, he testified that he was injured due to eight hours of cutting and stacking security screens.  The ALJ denied compensability finding that the claimant alleged an accident, and in order for him to have a compensable accident, he must identify by time and place of occurrence the event or strain which gave rise to his complaints. In light of the claimant’s inability to point out when or what activity caused his low back complaints, the ALJ denied compensability.

On appeal, the Commission affirmed but stated that they believed it was possible for repetitive lifting throughout a single work shift to constitute a singular event or strain for purposes of proving an accident.  However, they believed that in this case, the claimant failed to show any identifiable injury as a result of his work duties on December 28, 2010.

Claimant Slip/Fall While Walking in Public Street on Lunch Break Denied

In Obic v. St. Louis Antique Lightning Company, Injury No. 11-044808, the claimant was at work when he left for his 30 minute lunch break and walked across the street to eat at a restaurant. Upon returning from the restaurant, while walking in the middle of a public street, a strong gust of wind hit the claimant and he fell over, sustaining injury to his right arm. At a hearing, an ALJ denied compensability finding that the injury did not arise out of and in the course of the claimant’s employment. Specifically, the ALJ found that the claimant chose to leave for lunch and was not directed by his employer to leave the premises for lunch. Therefore, the ALJ found that the claimant was not injured by any condition of his employment.

On appeal, the Commission agreed with the ALJ and stated that nothing about the claimant’s employment required him to leave the workplace to eat lunch. Also, there was no indication that his employment was located in an area more prone to wind gusts than elsewhere. Therefore, the Commission held that the claimant’s injury arose from a risk unrelated to the employment and to which he was equally exposed in normal non-employment life.

Claimant, a Traveling Surveillance Employee, Sustained Compensable Fall in Public Bathroom

In Eberhard v. G4S, Injury No. 11-090670, the claimant, a traveling surveillance employee, was traveling for work when she stopped to use the restroom in a McDonald’s. While in the restroom, a heavy toilet dispenser fell on her right shoulder and face, injuring her. At a hearing, an ALJ found the matter compensable.

On appeal, the Commission found that the claimant’s injuries arose from a risk related to her employment activities because she was required to use public restrooms due to the unique nature of her work, in that she had to travel far distances. Additionally, the Commission stated that use of public restrooms exposes people to risks greater than using private restrooms. While the Commission did state that people generally use public restrooms in their normal non-employment life, the Commission stated that the nature of the claimant’s work exposed her to a greater frequency of using public restrooms and therefore, she was unequally exposed to this risk. Finally, the Commission stated that simply because the claimant was not on the employer’s premises did not mean that her claim did not arise out of and out of the course of her employment. Specifically, the Commission stated that the claimant sustained injuries while she was on the job, and therefore, the injuries arose out of the course of her employment.

Returning to Work Does Not Mean Claimant is Employable on Open Labor Market

Archer v. City of Cameron, Case Nos. WD77320 & 77321 (Mo. App. Ct. 2015) 

FACTS: The claimant sustained a herniated disc and radicular symptoms in the course and scope of his employment in 2008. He worked light duty from 2008 through 2010, during which time he worked within his restrictions laying concrete but did not do repetitive heavy lifting as he had done prior to his work injury. During his time on light duty, he was accommodated by his employer, as he was allowed to take breaks whenever he wanted, many of his co-workers helped him perform his duties, he no longer performed any heavy lifting, and he frequently took breaks in his truck to alleviate pain. In 2010 he sustained a sprain/strain to his back while in the course and scope of his employment.

At a hearing, an ALJ found the claimant was PTD and assessed 35% disability from the 2008 injury and 7.5% disability from the 2010 injury. PTD benefits were imposed on the Fund. The Fund appealed to the Commission arguing that the claimant was already PTD as a result of the 2008 injury. The Commission agreed with the Fund, finding that while the claimant continued to work after his 2008 injury, he was heavily accommodated and did not perform work at the level “customarily performed by the average person engaged in such work.” Therefore, the Commission shifted all liability to the employer/insurer. The employer/insurer appealed.

HOLDING: The Court of Appeals affirmed and agreed with the Commission’s finding that although the claimant returned to work following his 2008 injury, he could still be found PTD as a result of that injury, especially in light of the multiple accommodations he was provided when he returned to work.

Commission Awards TTD Benefits While Claimant Recovers From Injury and is Working For FriendBut Not the Employer

In Gamble v. Chester Bros. Construction Company, Inc., Injury No. 08-087820, the claimant tore his rotator cuff and underwent surgery. It is not explicitly stated in the Award but it appears the claimant worked for the employer/insurer as a laborer. The claimant was unable to return to work for his employer following the work injury but worked five months for a friend doing “odd jobs.” The claimant testified that 90% of the work he did for his friend was simply supervising other employees. The ALJ awarded TTD benefits for the period that the claimant worked those “odd jobs.”

On appeal, the employer/insurer argued that the claimant should not be entitled to TTD benefits for the periods that he worked between the time that he was injured and the time he was released from care in September 2011. The Commission disagreed with this argument, and stated that the question is the claimant’s earning capacity, not his actual earnings when determining whether he is entitled to TTD. The Commission stated that all of the claimant’s jobs during the period which he was awarded TTD were obtained through his acquaintance, and therefore, were not obtained through competition in the open labor market. Therefore, they agreed with the ALJ and found that the claimant was not disqualified from receiving TTD benefits for those time periods.

Contract Waiving Workers’ Compensation Benefits Signed by Claimant Did Not Establish Claimant Refused a Drug Test Because the Contract Did Not Contain Language to That Effect

In King v. American Employer Group 3, Injury No. 13-063318, the claimant had sustained a pre-existing injury in 1994 for his back. In 2011, he was diagnosed with fibromyalgia. The claimant began using marijuana, which he testified was to cope with his fibromyalgia and ongoing symptoms from the 1994 injury. On August 10, 2013, while walking at work, the claimant slipped and fell, injuring his tailbone. The employer requested the claimant submit to a drug test that day and told him that if he tested positive for drugs, his workers’ compensation claim “may not be handled.” The employer testified that the claimant refused to be tested. The employer testified that therefore, they provided the claimant with a document which stated that the claimant gives up his right to file a workers’ compensation claim and will be responsible for all medical expenses. Additionally, the document stated that the claimant waives all rights to future claims against the employer that may arise from the work accident. However, the contract did not state that the claimant’s signature was proof that he refused to take a drug test. The employer testified that they offered the claimant this contract as an alternative to taking the drug test, the claimant opted to sign the contract, and that was proof that the claimant refused to take the test. The claimant testified that he told the employer he may test positive because of marijuana he used prior to the injury but denied refusing to take a drug test.

At a hearing, an ALJ found that the claimant’s injury was compensable. With respect to the drug issue, the ALJ found the claimant’s testimony more credible than the employer’s testimony, because the release which the claimant signed on his date of injury contained no reference to a drug refusal and the employer could not explain why such a clause was not included in the release. The employer/insurer appealed and the claimant also appealed, asking for the costs of the proceedings on the basis that his claim was defended without reasonable grounds.

The Commission affirmed the decision, and stated that they would not yet determine the issue of imposing costs of the proceedings.

Non-Forensic Drug Tests Are Not Persuasive Enough

In Hertzing v. Beck Motors, Inc., Injury No. 09-025872, the claimant was injured on April 14, 2009, when he slipped and fell. The claimant received treatment at St. Mary’s Health Center on April 16, 2009, at which time a urine drug screen was positive for cocaine metabolites. Documentation of St. Mary’s Health Center stated that “testing for above analytes was performed only for medical purposes on urine using screening methodology. Occasional false positives and negatives due to interfering substances can occur. Confirmation testing is available by request.” The claimant testified that he did not use cocaine of his date of injury and provided testimony from an expert toxicologist, Dr. Vasiliades, who testified that the claimant did have an inactive metabolite in his system which was produced by the body breaking down cocaine, but it had no pharmacological effect. The doctor further testified that the window for detecting benzoylecgonine in the urine is around three days and is not an illegal drug. The ALJ did not award a reduction in benefits pursuant to the St. Mary’s drug test.

On appeal, the Commission affirmed. Regarding the drug penalty, the Commission was not persuaded by the non-forensic drug test results from St. Mary’s Health Center, and instead credited the claimant’s testimony that he did not use cocaine at work or in the few days prior to his work injury.

Claim Filed Against Fund Not Time Barred Because Claim Filed Within One Year of Settlement With Employer/Insurer

In Couch v. Treasurer of Missouri, Injury No. 11-047929, the claimant sustained injuries on June 22, 2011, to her head and neck. She filed a Claim for Compensation against the employer/insurer and the Fund on July 12, 2011. Subsequently, she settled with the employer/insurer on March 28, 2013. When the claimant settled her June 22, 2011 claim against the employer/insurer, the Second Injury Fund was dismissed by the claimant. The claimant then filed a new claim against the Fund on December 5, 2013, nine months later. At a hearing, an ALJ noted that a claim against the Second Injury Fund must be filed within two years after the date of injury or within one year after the claim is filed against the employer/insurer, whichever is later. The ALJ stated that her claim against the Fund was not time barred because her claim against the Fund was filed within one year after her settlement of the claim against the employer/insurer. The ALJ found that filing a settlement involving the claimant and the employer/insurer constitutes a “claim” and therefore, she filed her claim against the Fund within one year of settling her claim against the employer/insurer, so her claim against the Fund was not time-barred. On appeal, the Commission affirmed.

Employer/Insurer Responsible for Additional Treatment to Cure and Relieve Effects of Work Injury Only if Claimant Requests it

In Aufdenberg v. Drury Inn, Inc., Injury No. 08-115098, the claimant sustained an injury to his left shoulder on December 16, 2008. He received authorized treatment with Dr. Taylor and physical therapy was recommended. The claimant reported at physical therapy that he was 90% - 95% improved but still had some range of motion problems. On February 13, 2009 the claimant requested that Dr. Taylor return him to full duty, which the doctor did. After returning him to work, the claimant’s shoulder immediately began to bother him. The claimant then went to Dr. Miller on November 30, 2009 for treatment on his own. In May 2010 the claimant contacted the adjuster and demanded additional treatment, which was provided with Dr. Nogalski. Eventually, the claimant submitted for an IME with Dr. Lehman, who did not recommend any further treatment to address the work injury, but did refer the claimant back to Dr. Miller for treatment under his private insurance for arthritis. Thereafter, Dr. Miller performed surgery to repair a torn labrum. At a hearing, the ALJ sided with the claimant and found that his work injury was the prevailing factor in his torn labrum. The ALJ also found that the employer/insurer was liable for the costs of the surgery performed by Dr. Miller in 2012. However, the ALJ did not impose liability on the Employer/Insurer for the medical expenses accrued when he treated with Dr. Miller on his own in 2009. On appeal, the Commission summarily affirmed.

Frances Atiapo worked as a truck driver for Goree Logistics, Inc.  Goree contracted with Owen Thomas, a freight broker, to transport goods for another company.  While driving a load of goods for Goree, Frances Atiapo was injured in a motor vehicle accident in Colorado.  Goree did not have workers’ compensation insurance and denied Mr. Atiapo’s claim, contending he was an independent contractor and that workers’ compensation coverage was not required because Goree employed less than three employees.  The Commission ultimately found Owen Thomas liable as a statutory employee and ordered it to pay Atiapo workers’ compensation benefits pursuant to N.C.G.S. § 97-19.1.  In its Amended Opinion and Award, the Commission also assessed penalties against Goree and its principal, Mandieme Diouf, for failing to carry workers’ compensation insurance.

In Atiapo v. Goree Logistics, Inc., the Court of Appeals agreed with the Commission’s decision to hold Owen Thomas liable for Atiapo’s workers’ compensation claim as a statutory employer under N.C.G.S. § 97-19.1.  Although Owen Thomas contended it was only a freight broker, the court decided Owen Thomas had extended its role beyond a broker to that of a contractor under § 97-19.1.  The court noted Owen Thomas used its own judgment in selecting motor carriers for its clients and controlled aspects of the motor carrier’s work, including the delivery of the goods, the frequency with which motor carriers reported to Owen Thomas, and the temperature at which the freight was maintained during transport.  Owen Thomas also retained any monies received from its clients above amounts paid to its chosen motor carriers.  In addition, the court rejected Owen Thomas’ argument that § 97-19.1 was preempted by federal laws regulating interstate commerce, holding that the federal preemption established in 49 U.S.C. § 14501(c)(1) does not apply in these circumstances.

Although Goree did not employee three or more employees, the court also upheld the assessment of penalties against Goree and Diouf for failing to carry workers’ compensation insurance. The Commission had concluded that the number of employees Goree employed was irrelevant because § 97-19.1 imposes liability on a motor carrier under the Workers’ Compensation Act irrespective of the number of the motor carrier’s employees. Also, N.C.G.S. §§ 97-9 and 97-93 require employers subject to the Act, in this case Goree, to secure compensation for their employees and to maintain workers’ compensation insurance.

Risk Handling Hints:  In holding the freight broker liable where its contracted motor carrier was uninsured, and in penalizing the motor carrier, theAtiapo case demonstrates the broad reach of N.C.G.S. § 97-19.1, along with the policy of the Act to ensure compensation for injured employees. Atiapo also leaves open the question of whether a contractor under N.C.G.S. § 97-19 who employees less than three individuals can be penalized for failing to maintain workers’ compensation coverage.  Freight brokers would benefit from reviewing their contracts and obtaining valid certificates of insurance from subcontractors who agree to provide coverage.  Motor carriers should also carefully assess their insurance coverage to ensure compliance with N.C.G.S. §§ 97-9, 97-19.1 and 97-93.

The Atiapo case was of special interest to our firm, as we serve many commercial transportation clients. PartnersBill Bulfer and Brad Inman have spent much of the past decade working directly with industry associations and our clients to ensure a favorable risk environment. We believe there are alternative defense strategies available and encourage commercial transportation providers and their carriers to discuss with us some of our more coordinated, holistic approaches to defending these claims.

SCENARIO ONE: An employee has a preexisting arthritic knee condition that his personal physician says will require imminent knee replacement. Three months later this employee steps off a truck at work feeling pain in the knee.  He reports the incident to his employer, who sends him for treatment.  The doctor orders an MRI, stating that he feels that the employee needs a total knee replacement. The doctor writes that this incident “aggravated” the prior knee condition.

SCENARIO TWO: An employee has suffered with severe back pain for many years, treating unsuccessfully with many surgeons and has been informed she will have to live with the pain or get surgery. The employee is pushing a cart at work one day and feels pain in her back.  She sees a workers’ compensation doctor, who orders an MRI showing extensive spondylolisthesis.  The doctor states that this incident “aggravated the back condition.”  The employee now agrees to undergo fusion surgery.

Should the employer be paying tens of thousands of dollars for surgery and eventual permanency in these two scenarios? These are very common occurrences, but is there a common understanding of the term “aggravation?”  Does it mean one thing to doctors and another thing to workers’ compensation practitioners? In this writer’s experience, doctors often mean something completely different than attorneys. One thing is clear:  if the treating doctor says that the work incident aggravated a prior condition, the Judge of Compensation will require the employer to pay for surgery and for permanency.

So the ultimate answer in both scenarios above depends on what the legal definition of aggravation is.  In both cases, the employee had been told of the need for surgery before any incident at work.   If the authorized doctor means that the work activity simply caused “more pain” on a temporary basis with no real change in the underlying condition, then no, the employer should not be paying for surgery or permanency.  Nonetheless, employers pay for these kinds of surgeries over and over again because the treating doctor says that work “aggravated” the prior condition.  

There are two main reasons that workers’ compensation costs are overpaid in New Jersey, and for that matter, in most states: one is the lack of understanding of the legal definition of “aggravation,” and the other is the failure to take a detailed past medical history. A good explanation of what aggravation means comes from the case of Peterson v. Hermann Forwarding Co., 267 N.J. Super. 493 (App. Div. 1993),certif. denied, 135 N.J. 304 (1994

In the Peterson case, the employee suffered a traumatic accident on October 1, 1982 getting out of his truck.  He missed a month of work and could no longer return to work with his company, which had ceased operations.  He obtained employment four months later with another trucking company.  He drove back and forth to New Jersey, stating that “empty trailer bouncing” caused his right leg to get numb.  He said he had to bend down in a squat position, which hurt his back.  He also said his neck would stiffen up as well.  He left this company, Mid-Florida, because the hours were too long.  Then he worked for four more trucking companies.  The last trucking company he worked for was Yellow Freight, where he worked only six days.  He ultimately found that the pain levels were intolerable, so he stopped working in June 1984 and never worked again.  He brought claims against all the trucking companies, and the Judge of Compensation found that the last employer was responsible for total disability because the work there aggravated his prior back condition.

On appeal the Appellate Division reversed, stating that all the areas of the body which hurt petitioner while working in these subsequent employments were the same areas he originally injured in 1982. “Clearly, because of his pre-existing conditions, petitioner’s work activities at the subsequent employment caused him to suffer greater pain than he would have experienced had he remained sedentary.  However, an employer is not required to compensate an employee for pain.  There must be proof of a work related injury or condition resulting in permanent disability.”

The court also added the following:  “While the work efforts of petitioner in this case may be considered strenuous by some, they were not unusual for petitioner’s line of work.  It was what he would have been able to do but for the October 1982 accident.” Another case which clarifies the need for objective evidence of worsening to satisfy the definition of aggravation isKozinsky v. Edison Products Co., 222 N.J.Super. 530 (App. Div. 1988).

While Peterson was an occupational aggravation case, the logic that the court employed is important to appreciate.  The pain petitioner was complaining of at trial was the pain he had experienced all along, and there had been objective change over the years. N.J.S.A. 34:15-36 only requires an employer to pay partial permanent disability if the work injury produces objective changes which either cause a lessening to a material degree of working ability or a substantial impairment of non-work activities.

Practitioners should ask doctors not whether the work conditions “aggravated” the prior condition but whether there is any objective change from the prior condition -- or just a temporary increase in pain.  In other words, if one compares the prior MRI with the new MRI, and there is no change, there is no aggravation.  There may be some temporary increase in pain, but pain is subjective.  If there is a difference in the MRI results showing a worsening of the condition, then the employment activities will be found to have aggravated the prior condition.

As a practical matter, anyone who has a long-standing painful back or knee condition knows that almost any physical activity can cause a temporary increase in pain.  For a person with an advanced arthritic knee condition, even the act of walking can cause swelling and pain.  But a temporary increase in pain is not aggravation under the law.  Employers end up picking up enormous medical and indemnity costs mainly because treating doctors misunderstand the legal definition of aggravation, causing general health care costs to be passed through workers’ compensation.

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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. 

On April 2, 2015, Alabama Republican State Senators Del Marsh and Cam Ward submitted Senate Bill 330, which proposes drastic reforms to The Alabama Workers’ Compensation Act. If the legislature passes SB-330 and Governor Bentley signs it into law, it would be the biggest change to the Act since the 1992 Amendments. A full text of the proposed bill can be found , but the major proposed changes are outlined below.

MY TWO CENTS:

The last time we saw this many proposed changes to the Alabama Workers’ Compensation Act was on December 9, 2011, when State Senator Arthur Orr (R-Decatur) pre-filed a bill (SB77) for the 2012 legislative session. That bill never made it out of the Senate Business and Labor Committee. I would not expect this bill to make it out of committee either. There are simply too many controversial suggested revisions lumped together into one bill for there to be any chance of success. In order for such broad sweeping change to take place, it will be necessary to form a committee where all interested parties are represented and then hammer out a bill that is mutually acceptable before it is filed. That is the process that allowed the 1992 amendments to become law.

If SB-330 becomes law, § 25-5-11.1 of the Act would be amended to make it illegal for an employer to terminate an employee where the "substantial motivating factor" for the termination is that the employee instituted or maintained a workers’ compensation claim. Under the current law, the employee must prove that filing a workers’ compensation claim is the sole reason for the termination.

MY TWO CENTS:

Alabama is an employment at will state. This means you can fire someone for a good reason, a bad reason, or no reason at all. We currently have an exception to that rule in § 25-5-11.1 when the employee can prove that he or she was terminated solely for filing a workers’ compensation claim or filing a written notice of a safety rule. This means that if the employer had another valid reason for terminating the employee, then it is not considered to be a wrongful termination. If the employee can demonstrate that the other reason is a mere pretext, then it does not qualify as another valid reason and it would still be considered wrongful termination. To allow the new standard proposed above would have the effect of forcing employers to retain bad employees. It would also likely encourage more misconduct on the part of injured employees because of their new termination proof status.

§ 25-5-56 would be amended to provide a presumption that any settlement would be in the best interest of the employee, so long as the employee is represented by a licensed Alabama attorney. Additionally, any proposed settlement rejected by the Court would be reassigned to another judge and any statements or arguments made by the parties, witnesses or judge at the settlement hearing where the settlement was not approved would not be admissible in subsequent proceedings. Additionally, §25-5-56 would provide that advanced payments or payments of medical benefits of any kind shall not be considered an admission against interest or admission of liability.

MY TWO CENTS:

This is a good idea and would likely have unanimous support. The judge reassignment and confidentiality aspect of the bill was actually addressed by a committee appointed by then presiding judge of Jefferson County, Scott Vowell over 10 years ago. Both employee and employer interests agreed that it was a good idea and Judge Vowell adopted it as a local rule. The advanced payments aspect of the bill is already addressed by the Alabama Rules of Evidence. Evidence of such payments is already not admissible.

§ 25-5-57 would be substantially amended by increasing the number of weeks for permanent partial disability (PPD) benefits from 300 to 400 weeks. Additionally, permanent total disability (PTD) benefits would be cut off either after 500 weeks or after the employee attains 75 years of age – whichever is longer. §25-5-68 would be amended to completely remove the $220.00 per week statutory PPD cap, replacing it with a cap equal to 80% of the state’s average weekly wage or 100% of the employee’s pre-injury average weekly wage – whichever is less. To put that in perspective, an employee earning $1,000 per week who suffers a back injury resulting in a 50% permanent partial disability would be entitled to as much as $150,000. Under the current law, the employee would be limited to a maximum of $66,000.

MY TWO CENTS:

The $220 cap is low and probably needs to be bumped up at least to some degree. However, there needs to be a conversation between employee and employer interests on how best to effectuate such change. Simply introducing a bill proposing such drastic change does nothing more than make such change impossible during this legislative session. The proposed caps on PTD are a good start on how to negotiate such change but there needs to be more discussion.

§ 25-5-77 would be amended to provide that if an employee is dissatisfied with the initial treating physician selected by the employer and further treatment is required, the employee may select a new physician from a panel ofsix physicians selected by the employer (currently it is four). Additionally, § 25-5-77 would be amended to provide that if five years pass during which time an injured employee receives no medical treatment by his or her authorized treating physician for the injury, there would be a rebuttable presumption that any subsequent medical treatment would be unrelated to the injury. Additionally, after seven years without such treatment, there would be a conclusive presumption that the employee would not be entitled to any further medical treatment – with previously implanted medical or prosthetic devices being the sole exception. There would also be new provisions providing for pain management treatment and requirements that an injured worker receiving controlled substances sign a formal written agreement with the pain management physician. Under the proposed law, if the employee violates the agreement, her or she may lose his or her right to further pain management treatment. Another new provision would allow employers to select the pharmacy where injured workers’ get there prescriptions filled.

MY TWO CENTS:

It is hard enough to populate a panel of four in some of the more rural areas of Alabama. Requiring a panel of six could become impossible in some situations. Especially when you have an employee that gets kicked out of pain management or dismissed from the care of a treating physician for bad or inappropriate behavior. The five and seven year cut off periods sound nice but the reality is that we will see requests to return to the doctor every 4 years even when treatment is not needed. The pain management cut off aspect of the bill sounds nice except that it says may rather than shall. This means that it has absolutely no meat to it and renders the employer powerless to cut benefits when the employee is getting kicked out of pain management.

§ 25-5-88 would be amended to provide that the Courts must enter judgment within ninety (90) days of any workers’ compensation trial. Additionally, the bill would increase the maximum amount of attorney’s fees an injured worker’s attorney can charge, from 15% to 25%. It would also provide that a court can award up to 25% of the reasonable value of medical services, if the legal services provided for the injured worker are for the procurement of medical treatment previously denied.

MY TWO CENTS:

I have never understood why attorneys are limited to 15% on the award of indemnity benefits. I think that raising it is probably a good idea. However allowing a fee representing 25% of the reasonable value of denied medical services is a bad idea. If an employer exercised its right to deny a back injury claim and the judge subsequently ordered that it was compensable, the fee on the medical alone could end up being higher that the contingency fee on the indemnity award. Such an award would be more in the nature of a penalty and have the effect of scaring employers into paying for treatment that may not be owed.

§ 25-5-110 would provide compensation for psychological conditions which result from the hazards of the employment in excess of those ordinarily incident to employment in general, even if the psychological condition was not precipitated by a physical injury to the body.

MY TWO CENTS:

Alabama is a physical-mental state. This means you have to have a physical injury before you can successfully claim any type of psych condition. You do not have to have a significant physical injury but you have to have been physically injured at least to some degree. To allow employees to claim psych without the physical injury requirement would open the flood gates of psych claims.

§ 25-5-293 would be amended to require that utilization reviews be conducted by a board certified physician of the same specialty, licensed in Alabama.

MY TWO CENTS:

This would not be a terrible idea if it also included a presumption that such an opinion by a UR doctor would be considered to carry the same weight as the authorized treating physician. As it stands now, Alabama judges almost always side with the treating physician so it is unclear what this part of the bill is trying to accomplish.

Changes to § 25-5-311 would amend the composition of the Workers’ Compensation Medical Services Board. Instead of five licensed Alabama physicians, the Board would be comprised of two claims professionals chosen by the Alabama Workers’ Compensation Organization (AWCO), two employer representatives chosen by the Alabama Counsel of Association of Workers’ Compensation Self-Insureds’ Fund, two physicians and two provider practice managers chosen by the Medical Association of the State of Alabama, four hospital representatives chosen by the Alabama Hospital Association, a physical therapist chosen by the Physical Therapist Association of Alabama, two "employee representatives", chosen by the Alabama Association for Justice (the trial lawyers), and one judge chosen by the Alabama State Bar. Medical providers, other than hospitals, would be reimbursed at a rate equal to an amount 7.5 % greater than the rate customarily paid by the largest health care service plan in the state. Hospitals would be entitled to a maximum reimbursement rate of 1.2 times the Medicare National Base Rate multiplied by the Diagnosis-Related Group Weight Value as published by Medicare. Brand name drugs would be reimbursed at a rate equal to the average wholesale price, plus $5.00. Generic drugs would be reimbursed at 30% less than the wholesale price, plus $5.00. Additionally, injured workers not be allowed to have the medication prescriptions filled in any facility or business establishment in which the prescribing physician has a financial interest.

MY TWO CENTS:

This probably gives us a good road map on how to form a committee that can actually effectuate change that is mutually acceptable to all. Without all interested parties at the table negotiating a true compromise, nothing is likely to ever be accomplished. For an example of how it was done in 1992, I suggest that you read the first four paragraphs of Tuscaloosa attorney Steve Ford’s articleNew Alabama Workers’ Compensation Act published in The Alabama Lawyer in September of 1992. If you would like a copy, please shoot me an e-mail and I would be more than happy to send you one.

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ABOUT THE AUTHORS

The summary of SB-330 was written by Charley Drummond and the My Two Cents portion was written by Mike Fish. Both are attorneys at Fish Nelson & Holden, LLC, 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. The firm is a member of The National Workers’ Compensation Defense Network (NWCDN), which is a national network of reputable law firms organized to provide employers and insurers access to 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 authors atmfish@fishnelson.com, cdrummond@fishnelson.com, or (205) 332-3430.

United Heartland, Inc. and Camanche Community School District v. Kathaleen Brown, Court of Appeals of Iowa, No. 14-1070

Claimant, Kathaleen Brown, taught fourth grade at the Camanche elementary school from 1998 through 2010. In the fall of 2000, Claimant developed severe bronchitis and also received treatment for multiple asthma attacks. Between March 2003 and May 2010, Claimant saw her family physician more than two dozen times for respiratory problems. After being hospitalized for pneumonia in 2007, Claimant noticed mold on the filter of a humidifier she had brought into her classroom. The school followed up with four separate indoor air quality investigations between 2008 and 2011. The 2008 study revealed ventilators in Claimant’s classroom were “covered by a layer of particulate material.” Carpet dust samples showed fungal growth. An industrial hygienist suggested the school develop a “remedial cleaning strategy.”

Following a reactive breathing attack at school in May of 2010, Claimant did not return to work. On June 2, 2010, Claimant sought an opinion from Dr. Charles Bruyntjens, a pulmonary specialist. He diagnosed Claimant with occupational environmental lung disease, hyper-reactive airways, and shortness of breath. He found the school environment either started her condition or aggravated a preexisting condition.

Claimant filed a claim for workers’ compensation benefits on October 28, 2010, alleging she was exposed to contaminants in her workplace affecting her lungs, bronchial passages, and whole body. The school district filed an answer denying her allegations.

In April 2011, Claimant saw Dr. Jason Wittmer, a pulmonologist. Dr. Wittmer found no abnormal lung function and no airway obstruction. In August 2011, Claimant’s attorney arranged for an independent medical examination with Dr. Joel Kline. Dr. Kline reached an opinion that Claimant suffered from asthma, which had been substantially aggravated by exposures she received while at the school. In September 2011, the school district’s attorney sought an opinion from Dr. Laurence Fuortes. Dr. Fuortes opined “the elementary school was not grossly contaminated” at least “in the post remediation period.” Dr. Fuortes also found Claimant did not show a “chronic impairment of the respiratory system.”

On April 10, 2012, a deputy workers’ compensation commissioner issued an arbitration decision finding Claimant met her burden of proving an injury arising out of her employment. The school district appealed and the arbitration decision was affirmed on May 9, 2013. The school district sought judicial review. The district court affirmed the agency’s decision. The school district challenges the judicial review ruling on appeal.

The school district contends substantial evidence does not support the acting commissioner’s conclusion that Claimant suffered from “a pulmonary function injury” related to her work. The school district highlights the opinions of Dr. Wittmer and Dr. Fuortes and also contends the agency found Dr. Bruyntjens “was simply not credible” and asserts Dr. Kline’s opinion was based on erroneous information supplied by Claimant. Additionally, the school district argues Claimant cannot show her injury was caused by harmful conditions in the elementary building.

The Court of Appeals finds substantial evidence to back the agency’s conclusion that Claimant suffered a pulmonary function injury. The agency was entitled to rely on Dr. Kline’s assessment of Claimant’s lung injury and its nexus to the school environment, as well as accepting at least some of the opinions from Dr. Bruyntjens. The Court of Appeals also agrees with the district court that the agency record contains expert evidence establishing a causal connection between her injury and conditions in the elementary school. The record is replete with proof that water had infiltrated the roof and ceiling tiles in the fifty-year-old wing of the school building that housed the fourth grade classrooms where Claimant taught.

In summary, the Court of Appeals finds that the agency’s findings of fact were supported by substantial evidence and its application of law to the facts was not irrational, illogical or wholly unjustifiable.

Call Mark Bosscher or Lee Hook with any questions @ 515-243-2100.  We’d be happy to help, whether it be a quick or a complex issue!

On March 20, 2015, the Alabama Court of Civil Appeals released its opinion in Good Hope Contracting Company, Inc. v. McCall wherein it upheld an order compelling medical treatment but reversed an award of attorney’s fees. At the trial court level, evidence was presented that the authorized pain management doctor recommended a steroid injection. The request was sent to utilization review (UR) and it was determined not to be medically necessary by an orthopedic surgeon with a subspecialty in pain management. Based on the UR doctor’s opinion, the procedure was denied. The employee then filed a motion to compel the procedure and a motion for contempt alleging that proper UR protocol was not followed. Specifically, it was alleged that the orthopedic surgeon was not a peer of the authorized pain management doctor because managing pain was not is specialty. The trial court granted the motion to compel the injection but declined to grant to the motion for contempt. Despite this fact, the Court still awarded $18,375.00 in attorney’s fees.

On appeal, the Alabama Court of Civil Appeals upheld everything but the award of attorney’s fees. In order for such fees to be awards, the employee would have needed to be successful on his motion for contempt.

My Two Cents:

In the Unites States, attorney’s fees are not typically awarded to the prevailing party absence absent a contractual obligation or unless the prevailing party can demonstrate willful and contumacious behavior on the part of the opposing party. This is known as the American Rule. In this case, the Court of Civil Appeals determined that, because proper UR procedures were followed, the employer had a legitimate, debatable and arguable basis for its denial and, therefore, could not be held in contempt of court. Had the Court of Civil Appeals allowed the award of attorney’s fees to stand in this case, it would have resulted in similar motions being filed every time employers exercised their lawful right to deny medically unnecessary treatment in a permissible manner.

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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 atmfish@fishnelson.com or by calling him directly at 205-332-1448.

NID, Inc., and Great West Casualty Company v. Troy Monahan, Court of Appeals of Iowa, No. 14-0292

On March 15, 2007, Claimant, Troy Monahan, fell at work, landing on his left side. He treated at a local hospital and was prescribed medication. On September 28, 2007, NID assigned Claimant to a project. Claimant did not think he was physically able to do the project, and he left without ever returning to work. Over the next two years Claimant treated on multiple occasions for pain on his left side.

On February 26, 2009, Claimant filed his petition in arbitration, alleging a March 15, 2007, work-related injury to his upper left extremity, including shoulder, elbow, and hand. The matter came on for hearing in March 2010. The joint hearing report shows the parties stipulated that Claimant sustained an injury on March 15, 2007, that arose out of and in the course of his employment with NID. The parties disputed whether the injury caused disability, Claimant’s entitlement to healing period benefits or to permanent partial disability benefits, and whether Claimant’s medical expenses were causally connected to the injury.

On June 1, 2010, Monahan filed a petition for alternate medical care seeking arthroscopy recommended by Dr. Neff, an orthopedic surgeon who Claimant, on his own volition, treated with. NID filed its answer, disputing liability for Claimant’s “current left shoulder complaints for which he seeks care.” The agency dismissed the petition for alternate care.

On October 27, 2010, the agency filed its arbitration decision. The deputy found Claimant’s work injury was causally related only to the left hand carpal tunnel syndrome and awarded benefits for the period Claimant was off work following carpal tunnel surgery. The deputy ordered that Claimant was entitled to alternate medical care, specifically that “defendants shall provide claimant a second opinion by an orthopedic doctor of their choosing for his shoulder.” The parties appealed and cross-appealed the arbitration decision. In April 2012, the agency issued its appeal decision, affirming and adopting the arbitration decision.

On April 15, 2013, Claimant filed a second application for alternate medical care. The agency dismissed the application, explaining “before any benefits can be ordered, including medical benefits, compensability of the claim must be established, either by admission of liability or by adjudication.” The agency granted Claimant’s request for rehearing. It held the defendants were “barred by the doctrine of res judicata from contending they are not liable for claimant’s continued shoulder problems.” The rehearing decision also stated: “Since the April 2, 2012 appeal decision, defendants have not provided claimant with a second opinion regarding care for his shoulder injury. Defendants are therefore ordered, once again, to provide the alternate medical care prescribed in the October 27, 2010 arbitration decision in this case.” The agency then imposed attorney’s fees and costs as a sanction against NID.

NID sought judicial review of the rehearing decision. The district court concluded the application for alternate medical care “should have been dismissed” because causation was still at issue. The court remanded the case to the agency to hold a hearing on causation. Both parties filed post-ruling motions. The court summarily denied all postruling motions. This appeal and cross-appeal followed.

Claimant concedes the agency erred in applying the doctrine of res judicata to conclude that NID was barred from contesting causation and liability. He argues that the agency decision should nonetheless be affirmed by application of the doctrine of judicial estoppel because NID previously stipulated to causation and liability. The Court of Appeals concludes NID stipulated only that Claimant suffered a work-related injury. NID actually contested causation and liability at every point in these proceedings. Because NID has not asserted inconsistent positions, there is no reason to apply the doctrine of judicial estoppel. The Court of Appeals thus affirms the district court insofar as it held the agency committed legal error in holding res judicata barred NID from denying causation and liability and also insofar as it declined to judicially estop NID from denying causation and liability.

Additionally, the Court of Appeals agrees with the district court that section 86.42 is the appropriate method for seeking judicial enforcement of the agency’s orders and that the agency erred by ordering compliance with the agency’s prior order in the context of an alternate care proceeding. The agency does not have the authority in an alternate medical care proceeding under section 85.27(4) to enforce a prior order.

Finally, the Court of Appeals finds sanctions against NID were not appropriate. The agency’s primary basis for imposing sanctions was NID’s failure to comply with the appeal decision and obtain a second medical opinion regarding Claimant’s shoulder. That issue was not properly before the agency in this alternate medical care proceeding, and NID had a legitimate basis to contest causation and liability.

Given the Court of Appeals’ conclusion the agency erred in applying res judicata, erred in issuing an enforcement order in an alternate medical care proceeding, and erred in imposing sanctions, the appropriate remedy is remand to the agency for dismissal of the alternate medical care petition.

Tyson Foods v. Maria Gaytan, Court of Appeals of Iowa, No. 14-1397

Claimant, Maria Gaytan, suffered a left shoulder injury while working at Tyson’s in November 2005. She filed a petition in arbitration for workers’ compensation benefits with the Iowa Workers’ Compensation Commissioner. In his arbitration decision, the deputy commissioner concluded the injury was the cause of permanent disability and Claimant had “a 40 percent loss of earning capacity or industrial disability.” Claimant was awarded two hundred weeks of permanent partial disability benefits. Tyson did not seek intra-agency review of the decision.

In June 2010, Claimant underwent left shoulder surgery. In March 2012, Claimant filed a review-reopening petition asserting a change of condition since the arbitration decision. She claimed she suffered additional industrial disability as a result of the November 2005 injury. In his review-reopening decision, the deputy commissioner found that at the time of the arbitration decision, Claimant had a two percent permanent impairment to the body as a whole. Since her surgery, Claimant’s functional impairment had risen to ten percent to the body as a whole. Given this record, Claimant had carried her burden of proof that she had a change in condition related to her work injury with Tyson since the original award of benefits. The deputy then awarded Claimant healing period benefits from June 23, 2010, through May 24, 2011, and permanent total disability benefits commencing on November 22, 2005.

Tyson appealed the decision to the Commissioner, and the Commissioner affirmed the decision without additional comment. Tyson then filed its petition for judicial review. In denying the petition, the district court concluded there was substantial evidence of a change in Claimant’s condition after the original arbitration decision and substantial evidence supported an award of permanent total disability benefits under the odd-lot doctrine and an award of healing period benefits from June 23, 2010, through May 24, 2011. The district court affirmed the Commissioner’s review reopening decision in its entirety.

Tyson now appeals, arguing substantial evidence does not support a finding that Claimant sustained a change in condition since the original arbitration decision. It also argues the award of permanent total disability benefits was not supported by substantial evidence.

The Court of Appeals affirms the district court’s decision affirming the Iowa Workers’ Compensation Commissioner’s decision. The Court noted that the district court’s ruling identifies and considers all the issues presented. The cardinal rule of administrative law is that judgment calls are within the province of the administrative tribunal, not the courts, and the Court is statutorily obligated to afford due deference to the commissioner’s findings of fact.

Call Mark Bosscher or Lee Hook with any questions @ 515-243-2100.  We’d be happy to help, whether it be a quick or a complex issue!

Steven J. Bell Jr. v. 3E a/k/a Electrical & Engineering Co., and Travelers Indemnity/CT, Court of Appeals of Iowa, No. 14-0044

On March 19, 2010, Claimant, Steven Bell Jr., was working as an “inside sales” representative for Electrical & Engineering Co. (3E) when he slipped and fell in the 3E lobby. The fall resulted in a left wrist sprain, a trauma-induced ganglion cyst, lower back strain, and a contusion to the left shoulder and elbow. Claimant underwent surgery to remove the cyst from his wrist in early May and continued physical therapy for his wrist and shoulder. After leaving physical therapy in mid-May 2010, Claimant returned at the end of the month complaining of increased back pain. An MRI done on Claimant’s back revealed no problems or “abnormalities of the lumbar spine.” On June 24, 2010, Claimant was released to work without restrictions. 

On June 4, 2010, Claimant filed a petition with the workers’ compensation commission. The deputy found Claimant’s accident left him with a five percent industrial disability. On October 15, 2012, the commissioner adopted the findings of the deputy. Claimant sought judicial review, and on July 9, 2013, the district court affirmed the commissioner on all grounds. Claimant now appeals.

Claimant argues the commissioner erred in not considering his possible career as a firefighter in determining his lost earning capacity. Claimant received a degree in fire and science technology in 1997 and passed the examinations required to serve as a firefighter, but had not applied for any firefighter positions since 1997. He claims the workers’ compensation statute does not require an employee to have pursued a particular position to establish he or she has the capacity to perform it. The Court of Appeals agrees with the district court’s analysis in finding that the commissioner “properly considered the fact of [Claimant]’s minimal work experience as a firefighter when he chose not to include any lost earning capacity from employment as a firefighter.”

Claimant also claims the commissioner failed to make the credibility findings required by Iowa Code section 17A.16 (2011). The Court of Appeals finds the agency complied with section 17A.16, noting, “We do not hold the commissioner to technical compliance with this provision as long as we can determine where finding of facts end and conclusions of law begin or otherwise can track the commissioner’s analytical process.” The agency decision is divided into a finding-of-fact section and a conclusion-of-law section. The decision logically sets forth the commissioner’s thought process. The decision gives specific findings on Claimant’s credibility and while other credibility findings are not explicit, they can be discerned from the direction of the analysis.

Claimant also argues the issue of permanent disability was not ripe for adjudication because the doctors did not find he had reached maximum medical improvement (MMI) for his back injury. The Court of Appeals finds the commissioner’s decision that Claimant had reached MMI was supported by substantial evidence. In an independent medical examination, a doctor opined the Claimant had reached MMI for his back in June 2010 and only suggested future treatment for pain management; ongoing pain does not extend the healing period if it does not decrease the industrial disability.

Douglas Moad, By his Wife Sharon Moad, v. Gary Jensen Trucking, Inc., Court of Appeals of Iowa, No. 14-0164

Claimant, Douglas Moad, worked as a truck driver for Gary Jensen Trucking, Inc. On December 1, 2008, Claimant was driving his truck within the course of his employment when an SUV driver drove his SUV across the median and struck Claimant’s truck head-on. The other driver died at the scene. Claimant died roughly three months later. Thereafter, Claimant’s wife Sharon filed a claim for workers’ compensation death benefits on Claimant’s behalf, asserting the injuries from his December accident were the cause of his eventual death. Defendant admitted Claimant suffered injuries in his accident, but it denied that those injuries caused or contributed to Claimant’s death.

A hearing was held before a deputy workers’ compensation commissioner in September 2012. Several conflicting expert opinions were offered on the cause of Claimant’s death. Dr. Bruce, the cardiologist who treated Claimant the day of his demise, testified it was his opinion that Claimant’s probable cause of death was a massive pulmonary embolus, though it was also possible he died from a massive myocardial infarction. Dr. Watt testified that the consequences from Claimant’s accident could lead to the tendency to have a pulmonary embolus. The employer’s expert, Dr. Ronald Vessey, opined it was “most probable” that Claimant “died of the sudden death syndrome secondary to having developed an acute event.” Sharon’s expert, Dr. Dan Fintel, a cardiologist, concluded that “a cardiac etiology was the most likely cause of [Claimant’s] persistent chest discomfort, and was a direct consequence of the motor vehicle accident.”

In November 2012, the deputy commissioner entered his decision denying Sharon’s claim. The deputy noted the opinions of Drs. Vessey and Fintel and stated that the “opinions of both doctors are possible scenarios, and perhaps equally persuasive (reading Dr. Fintel’s opinions in the best light). However, the claimant has the burden of proving causation by a preponderance of the evidence.” Sharon appealed the deputy’s decision, and the Iowa Workers’ Compensation Commissioner affirmed the decision. Sharon then filed a petition for judicial review of the commissioner’s decision, challenging the agency’s factual findings, its legal conclusions, and its application of facts to the law. Following a contested hearing, the district court entered its judicial review ruling reluctantly affirming the agency decision.

The Court of Appeals affirms the district court’s ruling, finding substantial evidence supports the agency’s finding that Sharon did not prove by a preponderance of the evidence that Claimant’s accident was a cause of his tragic death. The commissioner relied upon Dr. Vessey’s opinion that Claimant was simply “one of the 250,000-300,000 Americans who die every year of cardiovascular collapse.” Consequently, the agency’s decision was supported by substantial evidence, and the Court of Appeals cannot conclude the agency’s decision to accept Dr. Vessey’s opinion over the other experts was irrational.

Sharon Moad, Individually and as Personal Representative of the Estate of Douglas Moad, et al., v. Richard Libby, as Personal Representative of the Estate of Matthew Libby, et al., and Dakota Truck Underwriters, et al., Court of Appeals of Iowa, No. 14-0290

Douglas Moad was a resident of South Dakota. He was employed as a truck driver by a South Dakota trucking company, Dakota Truck Underwriters (DTU). Pursuant to South Dakota law, DTU voluntarily paid workers’ compensation benefits to Moad arising out of a work-related traffic accident occurring in Iowa. Douglas Moad accepted the workers’ compensation benefits paid by DTU. Douglas deceased several months after the traffic accident. Sharon sought workers’ compensation benefits in Iowa. She also filed this civil suit against the motorist causing the traffic accident. DTU intervened in this case, asserting a workers’ compensation subrogation lien for the benefits paid to Douglas. Ultimately, Sharon settled this case with the underinsured and uninsured motorist insurance carriers and moved to strike the subrogation lien on the settlement proceeds. The parties agreed that DTU had a right to reimbursement if South Dakota law controlled the subrogation question and no right to reimbursement if Iowa law controlled the subrogation question.

The district court held Iowa law applied and granted Sharon’s motion to extinguish DTU’s lien. DTU appealed. In the first appeal, the supreme court concluded the district court and this court incorrectly analyzed the conflict of laws issue. The supreme court remanded the case “to the district court to consider the extent to which section 185 of the Restatement (Second) applies in this case.” The district court concluded Restatement (Second) section 185 applied to this case, concluded that South Dakota law controlled the subrogation question, and held that DTU had a valid lien against the settlement proceeds under South Dakota law for compensation benefits already paid to Moad.

Sharon timely appealed the district court’s order. Sharon first contends the district court erred in concluding Restatement (Second) section 185 was applicable to this case. Section 185 provides as follows:

"The local law of the state under whose workmen’s compensation statute an employee has received an award for an injury determines what interest the person who paid the award has in any recovery for tort or wrongful death that the employee may obtain against a third person on account of the same injury."

Sharon contends an “award” can only be paid following an adjudicative determination of entitlement to benefits, and as DTU voluntarily paid workers’ compensation benefits, section 185 is inapplicable. The Court of Appeals disagrees, finding that Sharon’s interpretation of section 185 is too narrow. Sound policy reasons actually militate against Sharon’s interpretation of section 185; it is at odds with workers’ compensation schema, generally, to adopt a rule that incents employers and insurance carriers to contest claims for no reason other than to preserve subrogation rights.

Sharon also argues that South Dakota law should not determine the subrogation issue because she filed in Iowa a workers’ compensation claim for benefits related to Douglas’s death. The Court of Appeals disagrees, stating that the fact that Sharon sought additional benefits in Iowa is not at all relevant to whether DTU has subrogation rights for benefits already paid pursuant to another state’s law.

Accordingly, the Court of Appeals finds the district court did not err in applying section 185 of the Restatement (Second) of Conflict of Laws and did not err in denying the plaintiff’s motion to strike the lien. The case is remanded to determine the amount of the lien.

Heritage Care and Rehabilitation and Midwest Employer’s Insurance Company v. Debra True, Court of Appeals of Iowa, No. 14-0579 

Claimant, Debra True, began working in 2007 as a dietary aide for the employer. She injured her right shoulder while taking out the trash in 2010. Medical treatment was provided for a short time. Claimant did not miss any days of work due to the injury, so no weekly workers’ compensation benefits were paid. On March 1, 2011, Claimant filed a petition with the workers’ compensation commissioner seeking medical benefits under Iowa Code section 85.27 (2011) for the injury. The case was set for a hearing on February 24, 2012.

Prior to that hearing on January 20, 2012, Claimant filed a motion to amend her petition to include a claim for temporary and permanent disability benefits. Claimant also submitted, and the commission accepted, a $100.00 filing fee. The case proceeded to hearing on February 24, 2012, where it was brought to the deputy’s attention that the $100.00 filing fee was paid and accepted with the motion to amend. Because the fee was accepted, the deputy concluded the agency had deemed the motion to amend to be a petition in arbitration, that filing had occurred prior to the running of the statute of limitations, and therefore, Claimant should be permitted to make a claim for weekly benefits.

After the hearing, the deputy issued a decision awarding a thirty-percent industrial disability to Claimant. The employer appealed to the commissioner, who summarily affirmed the award of benefits and also affirmed the deputy’s decision regarding the motion to amend. The employer filed a judicial review petition with the district court challenging the agency’s ruling on the statute of limitations issue and the award of benefits. The district court affirmed the agency’s decision, and the employer now appeals.

The Court of Appeals concludes the agency’s decision to permit the amendment is not irrational, illogical, or wholly unjustifiable. The employer asserts this ruling was in error because Claimant was required to file an original notice and petition for permanency benefits prior to the statute of limitations running, not just a motion to amend. However, there is no statutory or administrative rule requiring Claimant to file a separate petition for each type of workers’ compensation benefit she seeks from the employer arising out of the same injury. The commissioner concluded a motion to amend was the proper procedural course to take when a petition alleging the same injury for the same date against the same employer is already on file, and the Court of Appeals agrees.

The Court of Appeals also concludes substantial evidence supports the factual findings of the agency and the agency’s award of thirty percent industrial disability is not irrational, illogical, or wholly unjustifiable. The deputy commission assigned a thirty percent industrial disability after  concluding Claimant has clearly lost earning capacity as she is now restricted from overhead and heavy work activities. The deputy noted Claimant’s age and the fact that she had to give up her part-time work. The deputy also stated that the restrictions imposed would preclude Claimant from some food server and food preparation jobs that were in her prior work experience. The Court of Appeals therefore affirms the district court's judicial review decision affirming the agency's award of workers' compensation benefits.