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Kenneth Nichols worked for Midstates Packaging, Inc. as a mechanic.  He was injured on April 7, 2008, while trying to take the transmission out of a Hyster forklift.  While underneath the forklift, Nichols heard a pop in his shoulder when the forklift rolled off the blocks and over his left shoulder.  He did not notice that his skin was broken by the fork lift; however, he reported the injury to his supervisor immediately and a co-worker drove him to Somerset Medical Center.  An x-ray was taken but was negative for fracture, and petitioner was told he pulled a muscle.

            Nichols returned to work but continued to feel pain, which he reported to his supervisor.  Two weeks later he saw his family doctor, Dr. Berdini, who prescribed antibiotics and pain medication.  One week later he saw an orthopedic surgeon, who said that if the pain did not get better, he might need surgery because he had an infection.  Nichols developed a sore red lump on his collar bone.  In May 2008, his doctor told him he would need to have an abscess drained but Nichols declined because he lacked insurance.

            In June 2008, Nichols drove to Virginia for a family funeral, collapsing upon arrival.  He was diagnosed in the hospital with liver failure, MRSA, a broken collar bone, some broken ribs and a herniated disc, spending 11 days in the hospital.  He needed a PICC line to deliver antibiotics.  On returning to New Jersey, he was advised that his job had been terminated.

            Nichols denied any prior injuries to his lower back, ribs, clavicle or shoulder, and he denied any prior MRSA condition.  He continued to see Dr. Berdini and also continued to develop new health issues, such as infections under his arms and on his scrotum, as well as numbness in his left toes.  He had an MRI done at St. Luke’s Hospital which revealed a swollen spine.  He was referred to a pain specialist, who noted that his right pinkie finger became completely rigid.  He began taking OxyContin and Percocet three to four times a day as well as antibiotics and sleeping pills.

            Respondent denied causation between petitioner’s injury and his MRSA condition.  When petitioner went to Somerset Medical Center, the history said “pain, pop after lifting heavy object this am.”  His Regional Manager testified that Nichols told him he was injured pushing a tow motor.  The records from the hospital in Virginia said he had fallen from a forklift about two months ago, injuring his left shoulder.

            The diagnosis differed among the experts in the case.  Petitioner’s expert, Dr. Theodora Maio, diagnosed a fractured clavicle and fractured rib, although the x-rays of the left shoulder showed no fracture.  She thought that the x-rays may not have included the clavicle portion.

            Dr. Leonard Joachim, an internist for the petitioner, found that the blunt injury made the skin more vulnerable to MRSA, which he felt was probably contracted at Somerset Hospital Emergency Room. 

            Respondent produced Dr. Kenneth Peacock, an orthopedic surgeon, who did not believe that the injuries were consistent with the various descriptions of the accident.  He noted that the x-rays showed no fracture while acknowledging that the x-rays did not show the medial clavicle.  Dr. Peacock felt that it would have been very difficult for petitioner to have carried out daily activities with these fractures had they happened in early April.

            Respondent’s internist, Dr. Monroe Karetzky, felt petitioner had MSSA (methicillin-susceptible staphylococcus aureus), not MRSA.  He said that the scrotal testicular fistula could not be related to an incident that happened a year before the fistula manifested.

            The Judge of Compensation found for petitioner.  She said as follows:

Granted, petitioner’s history of the accident varies a little each time he relates it, but the general idea is constant.  He hurt his shoulder at work and went to the hospital for treatment immediately.  The MRSA infection correlates with the accident in time and area of the body affected as well as treatment in the hospital, a risk factor for MRSA.  Unfortunately, petitioner is not the most articulate communicator, nor is he sophisticated as to medical causation.  He described the accident as a shoulder injury.  The hospital interpreted this to mean the shoulder joint and consequently x-rayed the joint.

The Appellate Division affirmed the ruling for petitioner, stating that the findings of the Judge were supported by credible evidence in the record.  It noted that the standard is one of reasonable probability. While there were discrepancies in the petitioner’s history of the accident, the Appellate Division agreed that these were well evaluated by the Judge of Compensation and were found to be of little weight.  The Court also noted that the petitioner was under the influence of morphine when he described the accident to the hospital staff in Virginia.  The case can be found at Nichols v. Midstates Packaging, Inc., A-2445-12T2 (App. Div. August 1, 2014). It shows how complex MRSA claims can be in workers’ compensation and how important the timeline is in deciding compensability.

On July 18, 2014, the Alabama Court of Civil Appeals released its opinion in Arthur Barney v. Elizabeth Bell, as personal representative of the estate of Maurice Bell, deceased, and William Clay Teague. In the underlying action, Barney sued two Montgomery attorneys for legal malpractice arising out of a personal injury and workers’ compensation claim they handled for Barney. Barney was injured in a work-related car accident in July of 2010. He retained the two attorneys to represent him in his claim against his employer for workers’ compensation benefits, and in a negligence claim against the driver of the other vehicle who caused the accident. Pursuant to Code Section 25-5-11, an employer or its insurer is entitled to reimbursement of workers’ compensation benefits it has paid if the claimant also recovers damages from a third-party. However, the Act provides that the employer’s right to reimbursement is subject to a portion of the employee’s attorney’s fees incurred obtaining a settlement or judgment against the liable third party. The employer’s pro-rata share of attorney’s fees is an amount proportional to the reduction in the employer’s liability, and is generally equal to the contingency fee agreement that the attorney has with the claimant.

Barney settled his workers’ comp claim for $42,500, of which the attorneys received a 15 percent fee in the amount of $6,375. However, as a material term of that settlement, the employer’s insurer reserved its rights to full reimbursement of over $65,000 in workers’ compensation benefits that it had paid Barney from any recovery Barney might later obtain as a result of the negligence action against the third party. The third party’s insurer later settled with Barney in the amount of $45,000. Since Barney had signed a 50 percent contingency fee agreement with his attorneys for handling the personal injury case, his attorneys forwarded half of the $45,000 settlement to the insurer. The attorneys then retained the other $22,500 as their fee, pursuant to their agreement with Barney. Barney then filed suit against the attorneys, alleging legal malpractice. Barney alleged that his attorneys had charged him excessive attorney’s fees in violation of Alabama law, and that they also retained some of his money for their own benefit. Specifically, Barney alleged that the insurer agreed to reduce its subrogation interest to $22,500, and that the attorneys were only entitled to $11,250 pursuant to their 50% contingency agreement. Additionally, Barney alleged that his attorneys were not entitled to retain the $6,375 attorney fee they had collected on the workers’ compensation settlement, because they had been fully compensated in the third-party case.

One of the defendant attorney’s testified that he had received a letter from an attorney informing him that he could not retain the $6,375 fee based on the holding inBynum v. City of Huntsville. However, the defendant attorney stated that he was not aware of the holding in that case, and that he did not believe he had to refund the fee to Barney unless a Court ordered him to do so. The insurer’s claims adjuster admitted in deposition that she agreed to accept half of the third party recovery in satisfaction of its statutory reimbursement of subrogation rights. However, the totality of her testimony suggested that she understood that the defendant attorneys were entitled to the other half of the $45,000 settlement, as the employer’s pro-rata share of Barney’s attorney fees.

At trial, the defendant attorneys offered the claims adjuster’s testimony, and moved for summary judgment on the grounds that the insurer did not compromise its claim, and that they were therefore entitled to the fees they had collected. The trial Court granted their motion, effectively dismissing Barney’s malpractice claims, and Barney appealed. The Court of Appeals found that the insurer did not compromise its reimbursement claim. The Court of Appeals agreed with the trial Court’s finding that the insurer’s agreement to accept $22,500 was actually an agreement to accept the full $45,000, and then pay the 50% pro-rata share to Barney’s attorneys. Therefore, the attorneys were permitted to keep the other $22,500 as their fee. However, the Court of Appeals stated that the case of Bynum v. City of Huntsville required that the Court should credit the proceeds of the third-party settlement against any workers’ compensation benefits awarded before assessing attorney’s fees, in order to prevent a claimant from paying exorbitant attorney’s fees to an attorney who prosecutes both the worker’s compensation claim and a third party claim. Since the amount of the third-party tort case settlement exceeded the amount of the workers’ compensation settlement, the attorneys were not entitled to retain the attorney’s fees they had collected on the workers’ compensation case after they received their fee on the tort claim. Therefore, the Court of Appeals reversed that portion of the trial Court’s Order, directing the trial Court to enter a judgment for compensatory damages in the amount of $6,375.00 on Barney’s malpractice claim, and to determine what, if any, punitive damages Barney is entitled to.

My Two Cents

This case raises several interesting issues. While the defendant attorneys were apparently wrong in retaining the $6,375 fee from the workers’ compensation claim based on the holding inBynum v. City of Huntsville, the Court’s conclusion that it amounts to malpractice is a bit of a stretch. Alabama law requires that an attorney shall be required to use such reasonable care and skill and diligence as other similarly situated legal service providers in the same general line of practice in the same general area ordinarily exercise in a like case. Attorneys are required to use a reasonable level of skill to research and discover the rules. While every attorney is expected to knowcommonly known rules of law, they are not required to know every rule of law orevery case on a particular issue.

Another interesting issue is whether this holding has any implications in cases where a claimant retains one attorney to handle his workers’ compensation case, and another to handle a related tort case. It would hardly seem fair to deprive one attorney of a fee for handling a worker’s compensation case, just because another attorney received a hefty fee on a related tort case.

However, this ruling may be good news for employers in some cases. If the employer knows that the claimant’s attorney cannot take a fee on the workers’ compensation claim due to a situation similar to the one inBarney, the employer should theoretically be able to obtain a better settlement. For instance, if the claimant settles a case for $100,000, he typically only gets $85,000 after 15% attorney fees are deducted. However, if the attorney cannot take a fee, that same case could probably be settled for $85,000, because the attorney fee would not be deducted, leaving the claimant with the same amount of money.

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ABOUT THE AUTHOR

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

In Ex Parte Diamond Scaffold Services Group, Inc., the employee filed suit for workers’ comp benefits in Washington County, Alabama. Diamond objected asserting that Washington County was not a proper venue since the accident occurred in Mobile County and it did not conduct business in Washington County. In support of its request that the case be transferred to Mobile County, Diamond submitted evidence that the company was doing work as a subcontractor for ThyssenKrupp, and, although ThyssenKrupp did business in both Washington and Mobile County, the accident occurred in Mobile County.

The employee responded with evidence that ThyssenKrupp did business in Washington County, but the employee did not present any evidence indicating that Diamond also did business in Washington County. In any event, the trial court denied Diamond’s change of venue request. Diamond then filed a Petition for a Writ of Mandamus asking that the trial court’s order be set aside and for the case to be transferred to Mobile County.

The Appeals Court noted that when a defendant is a corporation, like Diamond, venue is proper in the county where the accident occurred, where the defendant’s principal office is located, or where the plaintiff resides if the defendant conducts business in that county. The Appeals Court noted that the plaintiff presented no evidence to the trial court that Diamond was conducting business in Washington County, and it was undisputed that the accident occurred in Mobile County. Although the plaintiff pointed out that ThyssenKrupp conducted business in Washington County, the Appeals Court noted that Diamond was the only defendant in the lawsuit, and therefore, the locations where ThyssenKrupp did business was irrelevant. The Court stated that Diamond was an agent of ThyssenKrupp, and held that it was shown no authority which would allow an action against an agent in any county where its principal does business. The Court noted that such a rule could yield shocking results. Specifically, the Court explained that ThyssennKrupp was an international corporation doing business at locations throughout the world, and it would make no sense to hold that an agent such as Diamond, which does business only in one county, might be subject to being sued anywhere its principal does business.

The Appeals Court ruled that there was nothing in the record which would allow the case to proceed against Diamond in Washington County, and ordered the trial court to transfer the case to Mobile County. In effect, employers who are subcontractors for larger companies are not automatically subject to suit in every county where the larger companies’ do business.

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About the Author

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

In a long awaited decision, the Supreme Court of New Jersey has overturned an award in the matter ofJames P. Renner v AT&T (A-71-11) (068744).  The case has drawn national attention because it dealt with a stroke claim from an employee who telecommuted quite regularly.

            Cathleen Renner worked for AT&T for 25 years as a salaried manager.  She telecommuted three days a week from home and worked the other two days in the office. On September 24, 2007, Ms. Renner worked on a project due the next day.  She spoke with her husband, who was on a business trip, around 11:00 p.m. and told him that she would be working through the night.  Her work was often deadline driven, and she would put in whatever hours were necessary to get the work done on time. 

Her son testified that she started working when they got home from dinner on September 24, 2007.  She was still working when he went to bed around 10:30 p.m.

At 7:50 a.m. she took her son to catch a school bus and grabbed her leg in pain while walking out of the house.  At 9:00 a.m. she told a co-worker by email that she did not feel well but would complete the project.  She did in fact complete the project at 10:30 a.m. and sent an email confirming this to her co-workers.

At 11:34 a.m. she called the Edison Township EMS saying she could not breathe.  She was pronounced dead on arrival at the hospital from a pulmonary embolism. An autopsy confirmed that she died of a pulmonary thromboembolism that became lodged in the main trunk of her pulmonary artery.  Her husband filed a dependency claim which eventually led to an award for petitioner at both the Division level and the Appellate Division level.

Petitioner’s expert, Dr. Leon Waller, testified that sitting at her desk the day before and day of her death contributed to her deep vein thrombosis. He said that the sedentary nature of her work “was the precipitant in her getting a pulmonary embolism which resulted in her demise.”  He gave an opinion that the cause of death was a pulmonary embolism caused by deep vein thrombosis.  He said that the clot was large and probably took hours to form, probably originating in her leg.

Respondent’s expert, Dr. William Kritzberg, said Ms. Renner’s death was caused by her morbid obesity, birth control pills, age and an enlarged heart.  He believed that her risk factors contributed more to her death than extended sitting at her desk.  He also disagreed that there was evidence of a clot in the legs or deep vein thrombosis. 

The Supreme Court reviewed the relevant statute, N.J.S.A. 34:15-7.2 and the leading decision ofHellwig v. J.F. Rast & Co., 110 N.J. 37 (1995). It said that this section of the law “reinstated the presumption that coronary-artery disease and heart attacks are the result of natural causes.” Further, the Court summarized the operative standard:

To sustain a Workers’ Compensation petition premised upon cardiovascular injury, a claimant must demonstrate that the harm was caused by a work effort or strain involving a substantial condition that exceeds ‘the wear and tear of the claimant’s daily living’ outside of the claimant’s work responsibilities. Hellwig, supra., 110N.J. at 42; see also N.J.S.A. 34:15-7.2.

The Supreme Court interestingly did not focus on a comparison between the decedent’s non-work activities and her work activities.  Her husband had testified that his wife was very active with her children both in and outside the home.  Instead, the Court focused on the language regarding a “substantial condition.”  The Court said, “Based on this record, we conclude that there has been no showing that Cathleen’s death resulted from a work effort or strain involving a substantial condition or event.”

            The Court found that her extended sitting while working at home “does not constitute a ‘work effort or strain involving a substantial condition, event or happening’ to support a compensable cardiovascular claim.”  It commented that Ms. Renner “was not confined to a specific space or instructed not to move from her workstation.”  The Court reasoned that Ms. Renner “was free to take breaks, during which she could stand, stretch, leave her workstation for a bathroom break or refreshments, or briefly exercise.”

            The case is important to practitioners because there are precious few reported workers’ compensation cases involving injuries during telecommuting.  It is also important because it focused on that part of the definition on cardiovascular claims involving proof of a substantial condition, event or happening.

Inex Graham worked for the Port Authority of New York and New Jersey.  She began her employment in June 1987 as a toll collector.  She was injured in 1989 when she slipped and fell while working at the Holland Tunnel.  She received an award in 1993 of 30% partial permanent disability for her left leg and 12.5% for her low back.

            On September 11, 2001, petitioner was attending a training session on the sixty first floor of the North Tower of the World Trade Center.  After the American Airlines plane struck the building, she walked down the stairs to safety.  Outside she was told to “run for her life.”  She scraped her knee but walked safely away before the building collapsed.  She was covered in white ash and reached a center where others helped clean her up.  She was transported to University Hospital in Newark where she was decontaminated and sent home.  She never returned to work.

            Petitioner filed a claim petition alleging orthopedic and psychiatric injuries from the events of September 11^th.  She alleged that she injured her back with left radiculopathy while running for her life, and she alleged psychiatric injuries from the day’s events, particularly from witnessing a co-worker being crushed in an ambulance as the tower fell. 

            Petitioner produced two experts at trial:  Dr. Vin Gooriah and Dr. Morris Horwitz.  Respondent produced Dr. David Gallina.  Its orthopedic report of Dr. Philip Keats was introduced into evidence by agreement of the parties.

            The Judge of Compensation awarded petitioner 75% of partial total on a psychiatric basis and 10% for her orthopedic claim with a credit of 5% for a prior low back sprain.  Neither party was aware of the prior 1993 workers’ compensation judgment at the time.  The Port Authority sought reconsideration after it became aware of the prior award, arguing that the two awards together gave petitioner 113% of partial total disability.  The Judge thereafter reduced the award to 75% of partial total with a credit of 12.5%.

            The Port Authority appealed on several grounds, including the failure of the Judge to properly credit the prior award.  The Appellate Division faulted the Judge of Compensation for not explaining why Dr. Gooriah’s testimony on the psychiatric aspect of the case was given credence over Dr. Gallina’s testimony.  Dr. Gooriah only saw petitioner once on October 1, 2007, while Dr. Gallina saw petitioner three times:  June 10, 2004, February 15, 2005, and September 28, 2006.  He opined that petitioner had a 5% disability on a psychiatric basis; Dr. Gooriah opined that petitioner had a 75% disability.

            The Court said:  “In accepting Dr. Gooriah’s recommended disability of seventy-five percent, the court made no findings and gave no explanation as to how it arrived at the figure.  The court simply restated Graham’s complaints, and concluded that the award is ‘fully supported by the testimony of Dr. Gooriah, by the petitioner’s testimony concerning her inability to function both at work and a normal life pursuits.’”

            In the opinion of the Appellate Division, Dr. Gallina had the benefit of three exams and was able to chart petitioner’s progress.  “When Dr. Gallina saw Graham in 2005, he noted that ‘she had really substantially improved.’”  He attributed the improvement to psychological counseling she had received.  “Finally, Dr. Gallina remarked that the medication prescribed by Graham’s psychiatrist had helped to calm down some of the anxiety she had been experiencing.  Dr. Gallina’s assessment after his second evaluation of Graham was that she had demonstrated ‘considerable functional improvement although she still indicated that she had some symptoms.’”

            The Court observed that Dr. Gallina still found petitioner had PTSD in his last exam but it was in partial remission.  Petitioner had no signs of depression, was able to drive a car, go to restaurants, go shopping, and her sexual libido had improved.  In a crushing admission at trial, Dr. Gooriah admitted that he could not state whether petitioner had improved more than three years after he examined her because of the lapse in time since his examination.  “Clearly, Dr. Gooriah could not present a reliable opinion based on objective medical evidence as to whether Graham showed improvement or regressed, as he only saw her on one occasion.”

            The Appellate Division reversed and remanded and reminded practitioners that an expert opinion on partial permanent disability must be supported by a recent medical examination.

            This case may be found at Graham v. The Port Authority of New York and New Jersey, A-5419-11T3 (App. Div. March 12, 2014). It is an unusual case because the Appellate Division seldom reverses a Judge of Compensation on the amount of disability.  This was not a dispute about whether petitioner had psychiatric disability from work:  the issue was how much disability she had.  The key to the victory by defense counsel was in skillfully highlighting the greater familiarity which Dr. Gallina had with the petitioner over Dr. Gooriah, and also in highlighting specific activities which petitioner was able to engage in as of the last examination by Dr. Gallina. By contrast, Dr. Gooriah merely parroted petitioner’s complaints, leaving the Judge very little basis to adopt Dr. Gooriah’s opinion as being more credible.

On July 25, 2014, the Alabama Court of Civil Appeals considered an interesting scenario where the trial judge granted an employee’s motion to strike the employer’s defenses to compensability that were asserted in its Answer and then entered an Order requiring the employer to pay for disputed medical treatment. The court also denied the employer’s motion for an independent medical examination. As a result, the employer petition the Court of Appeals for a writ of mandamus as to all three rulings.

The genesis for the above referenced flurry of motions, was a general denial filed by the employer in its Answer. This means that the employer disputed each and every allegation in the Complaint and admitted nothing. The employee took issue with the inconsistent nature of denying all allegations in the Complaint while, at the same time, paying indemnity and medical benefits, and asserting a statutory right to an IME. Basically, it was the position of the employee that the employer could not, on one hand, deny the claim while, on the other hand, treat it as accepted.

In Alabama, if the compensability of a claim is denied, then medical treatment cannot be compelled until the issue of compensability has been determined by either a trial on the merits or by way of a successful motion for summary judgment. Rather than proceed with either of these two options, the employee sought to simply have the denial itself removed from the Answer thus clearing the way for the judge to order that medical treatment be provided. While the employee gets creativity points for this approach, the Court of Appeals pointed out that the Alabama Workers’ Compensation Act and the Alabama Rules of Evidence prohibit an employee from using the payment of indemnity and/or medical benefits against an employer as an admission of compensability. Further, the employee was unable to provide any legal support for the proposition that filing a motion for an IME amounted to an admission of compensability. Since there was no apparent inconsistency between the employer’s Answer and its subsequent actions, the Court of Appeals granted the petition as to the struck defenses and the order to compel medical treatment. However, it denied the petition as to the employer’s IME request.

My Two Cents:

Even when a claim is denied and indemnity benefits are not provided, employers often times continue to provide medical care until a final ruling is made by a judge. When this option is exercised, it allows employers to retain control of the medical treatment, just in case they eventually lose. It also allows the employee to continue to receive medical treatment during the litigation process. If the Court of Appeals had ruled differently in this case, it would have likely had a chilling effect on the payment of early medical benefits. This was a good ruling for employers and employees alike.

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About the Author

This article was written by Michael I. Fish, Esq. of Fish Nelson & Holden LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atmfish@fishnelson.com or any firm member at 205-332-1448.

Earlier this month, we reported on a case where a trial court denied an employer’s motion to transfer venue based on the doctrine of forum non conveniens. The Alabama Court of Civil Appeals subsequently denied the employer’s petition for a writ of mandamus noting that such a petition is an extraordinary remedy and will only be granted if the trial court clearly abused its discretion. That opinion was clearly an example of when the first to file was rewarded by filing first.

More recently, the Court of Civil Appeals released an opinion on July 11, 2014, wherein it, again, refused to grant the employer’s petition for a writ of mandamus. This time, it was the party that placed second in the race to the courthouse that ended up winning the venue battle.

Specifically, the employer filed a workers’ compensation complaint in Mobile County. The employee then filed a motion to transfer the action to Clarke County based, in part, on the doctrine of forum non conveniens. It was undisputed that the employer’s principal place of business was in Mobile County and that the employee had been transferred to a Mobile hospital on the day of the accident. It was further undisputed that the employee resided in Clarke County at the time of the accident and on the date of filing the lawsuit, the accident occurred in Clarke County, and that at least some of the employee’s medical treatment and therapy occurred in Clarke County. There was a dispute as to whether or not there existed any witnesses to the accident.

Based on the foregoing, the trial judge granted the employee’s motion and transferred the matter to Clarke County. In denying the employer’s petition, the Court of Appeals noted that it could not find that the trial court exceeded its discretion in transferring the action.

My To Cents:

Although this appears on its face to be a different result than the case reported on earlier this month, the Court of Appeals’ basically ruled the same way. In both cases, the Court held that the trial court did not abuse its discretion.

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About the Author

This article was written by Michael I. Fish, Esq. of Fish Nelson & Holden LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atmfish@fishnelson.com or any firm member at 205-332-1448.

Mary Liu worked as a dealer at Bally’s Casino in Atlantic City.  On November 10, 2012, she was dealing a game of poker.  A customer whom she knew well “signified a check by forcibly striking the table very hard.” Petitioner was not facing the customer and felt startled by the noise.  She said her heart began to race and her hands cramped up.  Petitioner initially rejected an offer to take her to the hospital.

            An hour or so later, petitioner felt her body shaking with numbness in the back of her head.  She felt her heart rate increase with chest pain and was transported by wheel chair to a taxi, having declined the use of an ambulance.  She was treated and released by the hospital.

            The next day petitioner requested medical leave.  She saw Dr. Arvind Patel, M.D., an authorized physician, who diagnosed an acute anxiety reaction and suggested she could return to work.  The following day petitioner advised Bally’s that she did not feel well enough to return to work.  She said her own family doctor diagnosed a heart problem and took her out for a month.

            On November 16, 2012, petitioner resumed working but again found her heart rate increasing with hand cramping.  She was taken to the ER by ambulance and discharged.

            Dr. Patel saw petitioner again and suggested that she return to see him in a week.  Petitioner did not feel that Dr. Patel was helping her and was sent to Dr. Gary Glass, a psychiatrist.  He recommended a three-week absence from work. 

            Petitioner saw Dr. Glass on January 7, 2013.  He recommended an additional two to three weeks before returning to work.  On January 23, 2013 Dr. Glass saw her for follow-up and recommended a neurological consultation given petitioner’s ongoing complaints of weakness and headaches.  When he saw her again on February 7, 2013, he also recommended that she return to work on February 11, 2013.  At that point petitioner became more animated and began complaining about cramping in her arms and fingers.

            When Dr. Glass saw her on February 9, 2013, he kept her out of work again until March 4, 2013.  In the interim, the neurological evaluation was done, including an EMG, EEG, and MRI, all of which were normal.  The neurologist recommended physical and occupational therapy and found that her problems were caused by anxiety.

            On March 1, 2013, Dr. Glass wrote that he disagreed with the neurologist and felt that petitioner had become accustomed to being off work and simply did not want to return to work any longer.  He cleared petitioner to return to work on March 7, 2013.

            Petitioner claimed that her family doctor, Sun Miao, M.D., prescribed psychiatric care and put her out until May 31, 2013.  She never produced the report, however, from Dr. Miao.

            On March 28, 2013, petitioner contacted Bally’s Las Vegas HR office and sought medical leave with a projected return to work date of May 31, 2013.  She was informed that she was not eligible for FMLA and would need to request a personal leave.  She also called Dr. Glass to report that her symptoms were severe.  Dr. Glass felt petitioner was exaggerating her symptoms and concluded that she was at maximal medical improvement.

            Petitioner next applied for personal leave per the employee contract, which allowed for up to 60 days.  She also requested an IME.  Bally’s arranged a consultation  with Dr. Charles Meusburger, M.D.   When petitioner contacted HR she failed to inform Bally’s that she was departing for an extended trip to China to see her parents.  HR tried to reach her but she had already left for China.  She did reach Bally’s at one point and said that her “phone was not working and she was out of the country relaxing.” 

            Petitioner missed the first appointment with Dr. Meusburger but when she returned from China, she rescheduled the exam for June 6 and June 13, 2013.  In the interim Ballys notified her on May 9, 2013 that her employment was terminated for violating the personal leave policy. 

            Dr. Meusburger saw petitioner in June and opined that petitioner suffered from an adjustment disorder with anxiety and depression as well as a panic disorder related to work.  Petitioner filed a claim petition and motion for medical and temporary disability benefits relying on the opinion of Dr. Meusburger. 

            The Judge of Compensation did not conduct a hearing on the motion.  Instead, he reviewed the papers filed by both parties and entered an order against Bally’s to retroactively reinstate temporary disability benefits.  He also ordered that such benefits would continue into the future.  The Judge of Compensation prepared a supplemental opinion stating that he “abided by Dr. Meusburger’s findings that petitioner’s condition, that of post-traumatic stress, was a direct result of her experience on November 10, 2013.”  He did not comment on why he disregarded the opinion of Dr. Glass, nor why he did not require testimony from the medical experts. The Judge also rejected the applicability of the decision inCunningham v. Atl. States Cast Iron Pipe Co., 386 N.J. Super. 423 (App. Div.),certif.. denied. 188 N.J. 492 (2006).

            The Appellate Division recited numerous reasons for its reversal of the Judge of Compensation in this matter. 

            1) The court said that the Judge of Compensation erroneously relied on a statement Dr. Mesuburger made that petitioner’s family physician kept her out of work from March 26, to May 31, 2013.  No such report was ever produced.

            2) When Dr. Glass wrote his report on March 7, 2013 stating petitioner could work, there was no countervailing medical report from any doctor.  The Appellate Division noted, “Rather, the petitioner decided to take an extended vacation out of the country, claiming that leave was ordered by her family physicians.” 

            3) The Court noted that the Judge of Compensation made no causation findings and completely ignored Dr. Glass’s opinion that petitioner could return to work in March.  There was no analysis of why the Judge of Compensation chose to rely on the IME doctor, who saw petitioner twice, over Dr. Glass, who saw petitioner seven times over many months. 

            4) There was no discussion in the Judge of Compensation’s opinion about why the Judge disagreed with Dr. Glass’s view that petitioner was exaggerating her symptoms because she did not want to return to work, nor any discussion about the Judge’s disregard of Dr. Patel’s opinion.

            5) The Court also pointed out that there was no support in the record for the Judge’s conclusion that Dr. Glass “mistakenly sent petitioner back to work.”  Nor did the Judge evaluate the normal neurological reports that showed no objective explanation for petitioner’s symptoms in her chest, arm or hands.

            6) The Judge of Compensation also assumed facts that were not in the record in deciding that there was a traumatic event at work.  The Court observed that the Judge inaccurately described the work event as “a fight broke out at the petitioner’s table while she was dealing cards.”  There was nothing in the record about such a fight.

            7) The Judge also failed to address the issue of petitioner’s choosing to go on an extended vacation to China without clearing the leave with HR.  The Judge of Compensation found petitioner “did not abandon her job.”  Yet he did not mention anything about the trip to China.

            8) Most significantly, the Court concluded that the Judge erred in finding thatCunningham did not apply.  That case says that when an employee is terminated or quits, he or she is not eligible for temporary disability benefits unless the employee can prove he or she would have been working but for the work injury.  In this case, Bally’s argued that petitioner was not entitled to temporary disability benefits because she had been fired and because she never proved she would have been working.  In an unusually blunt comment, the Court said, “We further note the legal conclusion that Cunningham is inapplicable is wrong.”   The Court commented that “[p]etitioner’s voluntary removal from the work force preceded Dr. Meusburger’s medical evaluation diagnosing her as suffering from post-traumatic stress and other disorders.”

            9) Lastly, the Court cited to the Rules of the Division of Workers’ Compensation which require a Judge of Compensation to conduct a hearing and hear testimony from witnesses when a respondent rebuts the allegations of petitioner’s motion for benefits.  In this case, the Appellate Division concluded that petitioner should have produced live testimony, and the Judge of Compensation should not have ruled on the papers alone. 

            This decision can be found at Liu v. Bally’s Casino, A-0737-13T3 (App. Div. July 18, 2014).  Perhaps the most unusual aspect of the decision is the final paragraph: “Reversed and remanded to a different judge of compensation for review, including an evidentiary hearing, in accordance with our opinion.”

South Dakota Supreme Court

Whitesell v. Rapid Soft Water & Acuity

James Leach/Charles Larson

Issue: Whether a workers’ compensation carrier must pay the full amount of medical expenses incurred or whether it has to simply reimburse the health carrier for expenses actually paid.

The background of this case is not all that important, but the holding will have significant impacts going forward. This was a workers’ compensation claim whether the insurer denied surgery to the cervical spine. The department held a hearing and found the surgery was related to the work injury and the employer and insurer were responsible for the surgery.

Claimant had very good health insurance, which paid for the cervical fusion. The amount billed by the health providers was over $100,000. However, the amount paid by the health carrier was just over $20,000. After the department’s decision, the insurer reimbursed the health carrier their $20,000, and paid the claimant his out of pocket expenses. The claimant filed a motion with the department seeking to require the insurer to pay the full amount of the charges.

The department held the insurer satisfied its obligation by reimbursing the health carrier for what was actually paid. The circuit court reversed and held the full amount of the bills had to be paid to the health carrier, with the claimant’s attorney receiving a fee on those bills. The matter was appealed to the South Dakota Supreme Court.

The court reversed and held the insurer’s obligation was only to reimburse the health carrier for payments actually made. The applicable statute indicates that in the event a denied claim is later determined to be compensable, the insurer shall immediately "reimburse" the parties who made payments. The court said the plain language of the statute must be applied, and rejected the claimant’s argument that this would encourage wrongful denials.

This decision will have a huge impact going forward. With the requirement that everyone have health insurance, we will hopefully see more claims where a claimant has personal health insurance. If health insurance pays for something that is later determined to be responsible, your obligation is to reimburse the health carrier. The amount paid by the health carrier will be a substantial reduction on what was charged, depending on the health carrier.

Isack v. Acuity

Jon Sogn/Rick Orr

Issue: Whether the claimant’s attorney in a third party action is entitled to an attorney fee on the amount recovered by the insurer.

The claimant in this case was in a horrible automobile accident (semi versus car), and will be living in an assisted living facility his entire life. The claimant brought suit against the driver of the semi seeking damages from the accident. The claimant was also receiving benefits from the insurer as the injury occurred while he was working.

The insurer paid for medical expenses, and was to be reimbursed when the claimant settled with the semi driver. The insurer also received a credit on future "like damages" that the claimant received (lost time and medical benefits). The question was whether the insurer had to pay a fee to the claimant’s attorney for recovery of past and future medical expenses. The court held the insurer had to pay a fee, but the decision was very factual, and will not have much impact going forward.

The court indicated an insurer can hire its own attorney to protect its subrogation interest, and to negotiate the future credit. The insurer is not required to pay a fee to the claimant’s attorney as long as the insurer’s attorney takes an active role and actively participates in the litigation. The finding in this case was that the insurer’s attorney’s contribution was "de minimum" when compared to the work of the claimant’s attorney. The court could have held that an insurer is never allowed to protect its own interest, which would have had a huge impact on future claims. Instead, the decision states it is a factual question on whether the attorney did enough to warrant not paying the claimant’s attorney.

While this was case adverse to the insurer, it likely will not have any real bearing on future cases. The court’s language allows for a carrier to protect its own interest and avoid paying an attorney fee, but only if their attorney actively participates and substantially contributes to resolving the underlying claim.

South Dakota Department of Labor

Jacobson v. Rupp Masonry Construction

Robert A. Christenson/Eric Kerkvliet

Issue: Whether employer’s denial of specific medical benefits triggered the two year statute of limitations on future medicals.

Claimant suffered a work-related injury in 1987 that was primarily denied. The parties settled the dispute and Employer agreed to pay for future medical treatments directly and causally related to claimant’s alleged 1987 work injury. In 1998, Claimant suffered a slip and fall that was not work related and submitted medical bills related to that slip and fall to work comp. Employer denied medical benefits specifically associated with the slip and fall. On September 4, 2012, Claimant treated with Dr. Mitchell Johnson from Orthopedic Institute and Dr. Johnson recommended surgery. Dr. Johnson opined that the surgery was needed to correct problems caused by the 1987 injury. Employer filed for summary judgment stating that its denial of benefits in 1998 triggered the two year statute of limitations, barring Claimant’s claim for medical benefits.

The Department denied summary judgment and stated that the settlement agreement left open all medical benefits directly related to the 1987 injury. The 1998 denial only applied to that specific claim for medical benefits and did not prevent any future claim for medical benefits. Since SDCL 62-7-35 allows for a partial denial, the statute of limitations only applies to those benefits denied. In other words, the denial was too specific, and so it only applied to the dates of treatment identified. Moral of the story: it’s better to draft denial letters broadly.

Anderson v. Global Polymer Industries, Inc. and Cincinnati Insurance

Gary Schumacher/Charles Larson

Issue: Whether Claimant’s case should be dismissed for failure to prosecute.

I tried to get a case dismissed for failure to prosecute. There had been more than a year with no activity so it was up to the discretion of the department whether to dismiss the case. I was hoping that with one of the judges leaving, the other two would be a little more prone to get cases off of their desk. The motion to dismiss was denied as the claimant’s attorney had been gathering medical records within a couple weeks of the motion. While that should not count as "activity," the department felt it would be unfair to dismiss the claimant’s case.

Jordan Baker v. Rapid City Professional Hockey and Ace American Insurance Co

Steve Siegel/Greg Erlandson

Issue: Whether the collective bargaining agreement removes Claimant’s claim from the Department’s jurisdiction.

This is a case where a semi-professional hockey player was injured while playing hockey for the employer. The claimant sought medical treatment for his injury and the employer refused to pay for the treatment. The collective bargaining agreement specifically addressed how players would receive worker’s compensation benefits and directed that any disputes will be resolved through arbitration. Claimant filed a petition for benefits with the Department and Employer claimed the Department had no jurisdiction pursuant to the arbitration clause in the collective bargaining agreement.

In analyzing the jurisdictional issue, the Department held that SDCL 62-3-2 (work comp exclusive remedy for work injuries) precluded Claimant from seeking a remedy via arbitration as arbitration is contrary to law. The Department was quick to note that the arbitration clause was only unenforceable as it related to workers’ compensation matters and may be utilized for all other matters.

This case really has little bearing going forward. The interesting part is that I just saw where the Department signed an order allowing two parties to entire into a binding arbitration. The difference was that the Department entered the order allowing arbitration versus the parties simply putting it into a contract that is not approved by the Department.

Klinkner v. Lamont Company and Midwest Family Mutual Insurance Co.

Kara Semmler/JG Shultz

Issue: Whether certain withheld documents pursuant to Attorney Work Product are discoverable.

This is another case dealing with withheld documents and a motion to compel those documents. Claimant had a compensable injury to his hand in 2012. Eventually, Employer retained a nurse case manager on April 2, 2013. On April 9, 2013, Claimant’s attorney made contact with the nurse case manager and on April 10, 2013, Claimant’s attorney contacted Insurer. Claimant filed a petition for hearing on August 14, 2013. Employer answered the petition and denied any further benefits. Claimant sent discovery to Employer and Employer, who objected to the production of the nurse case manager notes claiming they were created in anticipation of litigation. Claimant moved to compel the production of the nurse case manager notes.

The Department used the same analysis as prior cases when determining whether the documents requested were protected by the attorney work product doctrine. Specifically, the Department held that "the test we apply for determining whether a document or tangible thing is attorney work product is whether in the light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation."

Employer argued that it anticipated litigation from the time Claimant hired an attorney. Claimant argued litigation could not be anticipated prior to the denial of benefits in Employer’s answer to the petition. The Department disregarded both arguments. It stated that the fact that Claimant hires an attorney to insure his rights are protected does not automatically signal that litigation is imminent. In this case, the correspondence from Claimant’s attorney was focused on insuring that the claims process proceeded smoothly. The Department also held that the date of denial was not pivotal as litigation could be anticipated prior to a denial, thus prompting a petition for hearing. In the end, the Department found that the date Claimant filed his petition was the date Employer could anticipate litigation.

While the Department used the correct test, I believe it reached the wrong conclusion. It’s absurd to think that the insurer in this case didn’t anticipate litigation until the petition was filed. I think that if the decision was appealed, the circuit court would find a different date applied. This is a good warning to be careful what is in your notes, and the nurse case manager notes, as that information will likely be produced.

Clyde v. Hardees and American Family Insurance

Brad Lee/Jeremy Nauman

Issue: Whether sheltered employment is considered regularly and continuously available employment to defeat a perm total claim

This case deals with a worker who was injured at Hardees and suffered elbow and cervical pain. It was a compensable claim. Claimant was given permanent work restrictions of no push, pull or lift greater than 5-10 pounds and avoid repetitive bending or twisting of the cervical spine. Hardees was unable to accommodate those restrictions and Claimant was terminated.

Claimant filed for unemployment and received such benefits. Claimant made about 150 job contacts while receiving unemployment benefits. Employer denied indemnity benefits while Claimant was receiving unemployment benefits. Eventually, Employer arranged for Claimant to work for All Facilities, Inc. doing telephone survey work. Basically, Employer paid All Facilities, Inc. to hire Claimant, thus subsidizing Claimant’s wages with All Facilities, Inc. Claimant only worked for All Facilities, Inc. for a short time due to alleged increased pain symptoms from doing her work activities.

Eventually, Claimant made a perm total claim on the fact that she was 58 years old, had only a high school education, had no real work experience outside of fast food (was a stay at home mom for 20 years) and her physical condition limited the available jobs. Employer denied benefits. The Department held that Claimant carried her burden to show that she was obviously in the odd-lot disability category and that the burden shifted to Employer to show that some form of suitable work was regularly and continuously available to Claimant. Employer argued that the All Facilities, Inc. position met that burden.

Among her arguments against Employer’s allegation that the All Facilities, Inc. position met Employer’s burden, Claimant argued that the All Facilities, Inc. position was not a bona fide opportunity because it was sheltered employment. Basically, Claimant argued that the only she had the position with All Facilities, Inc. was because Employer was paying All Facilities, Inc. for every expense associated with Claimant’s employment at All Facilities, Inc. In relying on an US Department of Labor case and an Illinois work comp case, our Department held that a single offer of employment for a sheltered position does not meet the Employer’s burden to show that work is regularly and continuously available to Claimant that fits within her work restrictions and meets or exceeds her workers’ compensation rate. This case applied to a perm total case, and likely will not have an impact on non-PTD cases.

On a side note, the Department also held that receiving unemployment benefits does not automatically mean that Claimant is not disabled for purposes of workers’ compensation.

If you have any questions, please contact Charlie Larson at 605-336-2424 orcalarson@bgpw.com. Thanks!

Issue: Whether a workers’ compensation carrier must pay the full amount of medical expenses incurred or whether it has to simply reimburse the health carrier for expenses actually paid.

The background of this case is not all that important, but the holding will have significant impacts going forward. This was a workers’ compensation claim whether the insurer denied surgery to the cervical spine. The department held a hearing and found the surgery was related to the work injury and the employer and insurer were responsible for the surgery.

Claimant had very good health insurance, which paid for the cervical fusion. The amount billed by the health providers was over $100,000. However, the amount paid by the health carrier was just over $20,000. After the department’s decision, the insurer reimbursed the health carrier their $20,000, and paid the claimant his out of pocket expenses. The claimant filed a motion with the department seeking to require the insurer to pay the full amount of the charges.

The department held the insurer satisfied its obligation by reimbursing the health carrier for what was actually paid. The circuit court reversed and held the full amount of the bills had to be paid to the health carrier, with the claimant’s attorney receiving a fee on those bills. The matter was appealed to the South Dakota Supreme Court.

The court reversed and held the insurer’s obligation was only to reimburse the health carrier for payments actually made. The applicable statute indicates that in the event a denied claim is later determined to be compensable, the insurer shall immediately "reimburse" the parties who made payments. The court said the plain language of the statute must be applied, and rejected the claimant’s argument that this would encourage wrongful denials.

This decision will have a huge impact going forward. With the requirement that everyone have health insurance, we will hopefully see more claims where a claimant has personal health insurance. If health insurance pays for something that is later determined to be responsible, your obligation is to reimburse the health carrier. The amount paid by the health carrier will be a substantial reduction on what was charged, depending on the health carrier.

This was my case so if you have questions on it, please give me a call at 605-336-2424 or email me atcalarson@bgpw.com.   Thanks!

Charlie Larson