In the past several years, there have been a litany of federal and state indictments (and convictions) for health care fraud involving healthcare providers and pharmacies. Most recently, a group of doctors, pharmacies, and federal worker advocates were indicted in connection with a compounded drug scheme that defrauded the federal workers’ compensation program and Tricare out of almost $40 million.

The court documents allege the fraud was coordinated by a Houston couple, John Cruise, CEO of the Injured Federal Workers Advocate Association, and his wife, Lashonia Johnson, the director of a group that helps federal workers who are injured on the job. The couple also ran a pharmacy in Texas that dispensed compounded medicine. The doctors involved in the scheme were allegedly taking kickbacks from Cruise and Johnson for prescribing expensive and unneeded compounds to federal workers referred by a therapy center.

-  Copyright 2018, Stone Loughlin & Swanson, LLP

Lynda Ferrari was injured at work falling down steps in April 2006.  She sought treatment for her right knee and lower back.  Dr. Joan O’Shea performed authorized surgery to address Ferrari’s right-sided herniated discs at L4-5 and L5-S1.  Ferrari experienced increased pain following surgery.  She saw multiple physicians after the surgery, seeking relief for her increased pain.

Ferrari filed a medical malpractice law suit on September 29, 2014 against Dr. O’Shea and Virtua Hospital.  The doctor filed an answer in January 2015 asserting that the law suit was barred by the statute of limitations.  Defendant relied on the employer’s IME in the workers’ compensation case performed by Dr. Anton Kemps in 2009.  In that report, Dr. Kemps opined that Ferrari developed arachnoiditis as a result of the surgery.  He provided an estimate of 5% permanent partial disability.  Defendant argued that more than two years expired from the date of Dr. Kemps’ 2009 report and the filing of the civil law suit.  The trial court ruled in favor of defendant and dismissed the case.

Ferrari appealed and argued that the two year limitations period should not have begun to run in 2009.  Both parties agreed that a medical malpractice case must be filed within two years of the accrual date, but New Jersey law makes clear that the cause of action does not accrue until the injured party discovers that he or she has an actionable claim.  Ferrari argued that the 2009 report from Dr. Kemps did not alert her that the surgery was a failure or that Dr. O’Shea may have committed malpractice.  It just said she developed arachnoiditis.

Ferrari maintained that she had no knowledge of potential malpractice until Dr. Kemps wrote another report in September 28, 2012.  In that second report, Dr. Kemps said that there was no indication that Ferrari “had any material placed within her disc spaces to replace the removed disc.”  He added that a review of the operative report did not show that any stabilization device was inserted to replace the removed disc.  There was also some evidence from a 2013 report of Dr. O’Shea that Ferrari experienced an additional herniation at the site of the operation at L4-5.

The Appellate Division disagreed with the trial judge.  “However, we agree with plaintiff that Dr. Kemps’ September 28, 2012 report was the first concrete information she received suggesting that Dr. O’Shea made a mistake in performing the surgery.  None of the other information defendant cites was reasonably likely to inform either plaintiff or her workers’ compensation attorney that Dr. O’Shea had done anything wrong.”  The Court added, “Until Dr. Kemps’ September 28, 2012 report, none of the doctors suggested that Dr. O’Shea was at fault.”

Based on this analysis, the Appellate Division reversed the dismissal of the civil law suit.  This does not mean that the Court found any evidence of medical malpractice:  it only means that Ferrari will have a chance to prove her medical malpractice case.

The case is interesting because it shows how an IME in a workers’ compensation case for permanency purposes can sometimes create the basis for a medical malpractice claim and indeed start the clock running on the injured worker’s potential civil law suit.  This is one compelling reason why parties need to read IME reports in workers’ compensation very closely.  Sometimes the tendency is to just focus on the overall percentage of disability and potential credits.  But both counsel have to pay close attention to discussions about the effectiveness of surgery.  In this case, the Appellate Division specifically noted that Ferrari’s workers’ compensation attorney would not have been alerted to potential malpractice until he read the September 2012 report.  Moreover, respondent’s lien rights depended on the revival of the medical malpractice law suit, so defense counsel must also be vigilant.  The case underscores why it often does not make sense for workers’ compensation counsel to hold onto IMEs until they get to court at a pretrial hearing.  A report such as this should be sent immediately to opposing counsel, since the Appellate Division in this case concluded that the cause of action accrued the very date of the September 28, 2012 report of Dr. Kemps.

This case can be found at Ferrari v. Joan F. O’Shea, M.D. A-3289-16T2 (App. Div. July 13 2018). We thank our friend Ron Siegel, Esq. for bringing this case to our attention.

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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. 

KANSAS WORK COMP EMERGING ISSUES AND TRENDS - 2018

2018 Kansas Legislature:  The 2018 Kansas legislature enacted several substantive workers compensation law changes related to death benefit claims.  Highly summarized, while the overall $300,000.00 death benefit cap remains, key death benefit statute changes include:  1) the funeral benefit cap was increased from $5,000.00 to $10,000.00; 2) the up-front lump sum payment increases from $40,000 to $60,000.00; 3) clarification of statutory language regarding cut off of payments to minor dependent children when still in high school; 4) increase in caps for dependents, if any, where employee leaves no legal spouse or dependent children; and 5) increase in allowable Conservator expenses for minor dependents up to maximum of $2,500.

Constitutionality of Statute Requiring Use of AMA Guidelines 6^th Ed. –Pardo Kansas Court of Appeals Ruling:  The 2013 Kansas Legislature amended the Kansas Workers Compensation Act to require use of the AMA Guides to the Evaluation of Permanent Impairment6^th Ed. to determine an award of permanent partial disability compensation based on the extent of functional impairment.  Prior to January 1, 2015, the statutorily required AMA Guides edition was the4^th Ed.  The change from use of the AMA Guides 4^th Ed. to the 6^th Ed. became effective for all injuries occurring on or after January 1, 2015.

Since 2015, Kansas claimants and the claimant’s bar have been heard to complained that the AMA Guides, 6^th Ed. so significantly reduces impairment ratings and resulting compensation awards, as to effectively eliminate an adequatequid pro quo substitution of a work comp remedy for the workers’ original civil tort damage remedy.  In the original grand bargain, Kansas injured workers relinquished their common law civil court tort remedy of uncapped damage award potential from a jury of their peers, in exchange for a no-fault benefit remedy system that was intended to adjudicate work injury disputes and deliver medical treatment more quickly and predictably, but with capped disability benefit recovery potential for injured workers and lower costs to employers.

On June 1, 2018, the Kansas Court of Appeals (Kansas’ intermediate appellate court) handed down its ruling in the case ofPardo v. United Parcel Service, Inc., (No. 116,842) concerning the constitutionality of the Kansas Workers Compensation Act’s 2015 adoption of the AMA Guides 6^th Edition in calculating permanent partial disability compensation benefits.

Claimant Pardo was a thirteen-year employee of UPS operating trucks, picking up and delivering loads, and working in the yard with a spotter.  The accidental work injury which was the subject of this claim occurred on March 18, 2015 while climbing on a piece of equipment.  Mr. Pardo slipped on an oil and grease buildup, causing his left arm to jerk, and he felt a pop and pull in his left shoulder.

The focus of Pardo’s constitutional challenge of the legislative requirement that permanent partial disability be computed based on the AMA Guides, 6^th Ed. was a unique 6^th Ed. rating limitation for shoulder injuries.  The 6^th Ed. specifies for a certain type of rotator cuff tear, a 0% -2% permanent impairment rating can be given.  However, the 6^th Ed. also adds the provision not found in the AMA Guides 4^th Ed. that a rating in the range of 0% to 2%for these types of shoulder injuries can only be given once in an individual’s lifetime (AMA Guides, 6^th Ed., Table 15-5, Page 402).

Pardo’s unique fact situation was that he had suffered a prior left shoulder rotator cuff tear in a previous 2013 work related injury, which resulted in a previous left shoulder surgical repair and disability compensation recovery.

When applying the AMA Guides 6^th Ed. to this 2015 claim of left shoulder re-injury, the employer’s argument was that Pardo was entitled to no additional permanent partial disability compensation for this 2015 shoulder work injury.  This is in stark contrast to what permanent disability compensation Pardo would have received had the law allowed Pardo’s impairment and disability compensation to have been based on the old AMA Guides 4^th Ed. language.

Under the previously required AMA Guides 4^th Ed. shoulder rating provisions, had they still been in place in 2015, Pardo would likely have been awarded, for the 2015 re-injury, permanent disability compensation of an additional 10% permanent impairment above the previous 15% permanent impairment Pardo had been awarded for his first left shoulder work injury.

In short, because Kansas required the AMA Guides 6^th Ed. to be used to determine his permanent disability compensation for the 2015 left shoulder re-injury, Pardo is now entitled to zero dollars ($0) additional permanent disability compensation above his previous 2013 original shoulder injury award.  Contrast the $0 permanent partial disability compensation award under the AMA Guides 6^th Ed. for the Pardo 2015 re-injury claim, with the approximate $13,000.00 award he would have received for that 2015 re-injury claim had the old 4^th Ed. version of the AMA Guides still been in place in the statute.

This compensation recovery differential under the AMA Guides 6^th Ed. left Pardo with the obvious legal argument thatas applied to his case the legislative change from the AMA Guides 4^th Ed. to the 6^th Ed. was unconstitutional because not only was the amount of his permanent disability compensation significantly reduced for this second work related shoulder injury, he was actually completely denied any permanent disability compensation remedy under the 6^th Ed. requirement applicable to his 2015 accidental re-injury claim.  Therefore, the quid pro quo basis of the original grand bargain was lost to Pardo as the amended law requiring the use of the 6^th Ed. was applied to his 2015 re-injury claim situation.

The Pardo Kansas Court of Appeals decision reversed the Appeals Board denial of permanent disability compensation benefits.  In doing so, the Court of Appeals held thatas applied to Mr. Pardo, the use of the AMA Guides 6^th Ed. was unconstitutional and remanded the case back to the administrative agency for a determination of permanent impairment and disability compensation entitlement based on the AMA Guides 4^th Ed.

Interestingly, neither the employer nor Pardo filed with the Kansas Supreme Court, a timely Petition for Review by the Supreme Court of thisPardo Court of Appeals decision.  This is because while the outcome of thePardo Court of Appeals decision to reverse the Appeals Board favored claimant Pardo, the very narrow and limited rationale for the decision used by the Court in its opinion to reach that result could be seen as actually potentially benefiting employers in future AMA Guide 6^th Ed. rating disputes.  It appears each side calculated the risks of further appealing this particular Court of Appeals outcome and decided the risks of further appeal to the Kansas Supreme Court were greater than simply living with the outcome of the Court of Appeals decision as written in Mr. Pardo’s case.

Claimant Pardo prevailed in the outcome of this decision in that his case will now return to the Appeals Board and instead of receiving $0 additional permanent disability compensation for the 2015 re-injury, he will likely receive a modest award of some additional permanent disability compensation.  Yet this is a far cry from what claimant Pardo argued for before the Kansas Court of Appeals in this appeal.

Pardo’s basic request to the Kansas Court of Appeals was that the Court determine the entire Kansas Workers Compensation Act unconstitutional and allow Kansas injured workers to regain their original civil tort remedy in Kansas general civil courts, before a jury of their peers.  Pardo argued that his $0 permanent disability compensation award was unconstitutional as it denied him due process, violated equal protection, violated separation of powers and was an unlawful delegation of the State’s legislative powers.

The rationale of the Pardo Court’s ruling did not grant claimant Pardo with the sweeping evisceration of the Kansas Workers Compensation Act his counsel requested of the Kansas Court of Appeals.  The Court rejected Pardo’s recommendation that he be allowed to purse civil tort damages for his 2015 work injury because the requirement of use of the AMA Guides 6^th Ed. denied him a remedy under the Act.  The Court potentially limited the scope and future application of its decision to other Kansas injured workers through its holding that the Act’s use of the AMA Guides 6^th Ed. was unconstitutional, by carefully restricting its determination of unconstitutionallyto this particular claimant’s fact situation as opposed to the entire Kansas Workers Compensation Act as applied to all other current and future injured worker claims.

The current and future impact of this limited Pardo Court of Appeals decision will be closely followed.  Undoubtedly, this will not end the claimants’ bar challenges to the constitutionally of the AMA Guides 6^th Ed. in other fact situations, and other more general constitutional challenges as to the broader pro-employer 2011 reform amendments to the Act.  While other pending and future shoulder re-injury claims in Kansas will likely be resolved by the parties with a compromise consideration of AMA Guides 4^th Ed. impairment ratings for specific rotator cuff re-injury claims, whether thisPardo Court of Appeals decision will impact the routine resolution of Kansas claims involving body part problems beyond just certain shoulder injury conditions is yet to be determined.

Kim R. Martens
MARTENS WORK COMP LAW LLC
Phone: 316.461.0135
E-mail:Kim@MartensWorkCompLaw.com
www.MartensWorkCompLaw.com

On July 13, 2018 the Alabama Court of Civil Appeals released its opinion in Lawler & Cole CPAs, LLC, and Alabama Retail Association d/b/a Alabama Retail Comp v. Donald Cole which was on appeal for the Marion County Circuit Court. In the underlying case the employee’s estate filed a motion for summary judgment on its claim for death benefits based on the employee’s death as a result of a former client shooting her in her office. The employer also filed a motion for summary judgment which was denied. The trial court found that the employee’s death occurred in and arose out of the employee’s employment with the employer.

The parties agreed with the facts of the circumstances of the employee’s death in that the employee had served as the accountant for a Mr. Jimmy Dale Cooper since at least the 1980s. At some point in handling Mr. Cooper’s business, Mr. Cooper was audited and Mr. Cooper ultimately refused to comply with the lawful request of the Alabama Department of Industrial Relations. The employee and her employer subsequently ceased to handle Mr. Cooper’s business at which time the employee told Mr. Cooper she did not want any hard feelings between them because they were friends and they had worked together for such a long time but the employer could no longer handle his business. In February of 2016 Mr. Cooper entered the premises of the employer and ultimately shot and killed the employee. The evidence presented established that Mr. Cooper had stated that he was upset and going to shot the employee because he blamed the employee for the tax problems in his past. Nothing in the evidence established that Mr. Cooper and the employee had any sort of personal disagreement.

Under the Alabama Workers’ Compensation Act, the unexpected willful assault upon an employee by another person constitutes an accident for the purpose of the Act and any injury resulting from shall be compensable if the rational mind can trace the resultant injury or death to a proximate cause set in motion by the employment and not some other agency. SeeGarrett v. Gadsden Cooperage Co., 96 So. 188 1923 and Beverley v. V. Ruth’s Chris Steakhouse, 682 So. 2d 1360, 136, (Ala. Civ. App. 1996). Furthermore, the supporting case law indicates that the employment can still be the approximate cause if the assault was not foreseeable as a natural and anticipated risk of the employment.

In this case, the employer was arguing that the length of time between the interaction between the employee and Mr. Cooper supported that there was something personal that resulted in the employee being killed or that at the very least it was unrelated due to the gap in time. However, the Alabama Court of Civil Appeals pointed out that the plain language of the statue, § 25-5-1(9) clearly and unambiguously provides that the intentional assault would not arise out of the employment if it was committed upon the employee because of reasons personal to the employee and not because of his/her status as an employee or because of his/her employment. In this case, the Alabama Court of Civil Appeals stated that despite the fact that there was a significant lapse in time between the employment related act and the employee ultimately being killed, the evidence was undisputed that Mr. Cooper intentionally assaulted and killed the employee not out of personal ill will but solely because of the employee’s work performed on Mr. Cooper’s taxes. Immediately before opening fire on the employee Mr. Cooper stated his intent to kill the employee because she “f***** (his) taxes”. The Court specifically rejected any contention that an assault would be considered purely personal because of the long passage of time between the professional relationship between Mr. Cooper. Furthermore, while the record may have been vague as to what happened between their professional relationships and the time Mr. Cooper shot the employee it was clear at the time of the assault that Mr. Cooper was angry and blamed the employee for his tax problems and was acting as a result of that. Therefore, the Court of Civil Appeals upheld the trial court’s motion for summary judgment ruling stating that the death of the employee was caused by accident arising out of and occurring in the course of the employee’s employment and therefore, benefits were due to the employee’s estate.

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 About the Author

The article was written by Joshua G. Holden, Esq. a Member of Fish, Nelson & Holden, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields.

Victor Campos worked for the Department of Public Works for the City of Passaic.  On December 23, 2013, he was performing maintenance work at City Hall when he began to feel ill.  He made the decision to go home early, but first he had to notify his employer that he was finished for the day and complete paperwork for his supervisor to sign.  On the way back to the DPW office, a car driven by a co-employee, Miguel Cruz, a police officer in the City, ran a red light and collided with Campos’ car.

Campos sued Cruz for his personal injuries, and he also brought a workers’ compensation claim against the City, which he settled on a Section 20 basis. Counsel for the City and Cruz in the civil action argued that the civil suit was barred because Campos was in the course of his employment when the action took place and he was injured by a fellow employee of the City.  The Superior Court dismissed the civil suit as barred under N.J.S.A. 34:15-8.  That provision prevents civil suits against fellow employees.

On appeal Campos argued that he was just returning to the DPW office for personal reasons: namely to fill out paperwork so he could go home.  He argued that his day was done when he finished working at City Hall.  The Appellate Division disagreed and noted that Campos left the City Hall location to submit required paperwork in order to take off a half-day.  Only after completing paperwork would he be permitted to go home.  The Court concluded that Campos was therefore performing duties “assigned or directed by the employer” at the time of the accident.

That plaintiff was not physically at his workplace when the accident occurred is thus of no moment.  Indeed, as a DPW worker, plaintiff could have been working in any part of the City when he was involved in the accident.

The Court held that part of Campos’s job was to complete paperwork to take off the rest of the day. “The City had a policy requiring him to fill out paperwork prior to going home for the day.  Plaintiff was complying with that policy as directed by his employer.”

Campos also tried to argue that a Section 20 settlement does not bar his damages claim against his employer and co-employee.  The Court gave some interesting analysis on this issue, citing Sperling v. Bd. of Review, 301 N.J. Super. 1, 5 (App. Div. 1997).  “Receipt of a lump sum settlement under N.J.S.A. 34:15-20 constitutes an implied acknowledgement that the claimant’s disability was work-related and compensable under the Workers’ Compensation Act.”  The Court stated:

Having recovered a workers’ compensation award for his injuries, plaintiff now seeks to pursue a negligence claim for damages involving the same accident and resultant injuries.  Because plaintiff’s present claims are prohibited by both statute and common law, the trial court did not err in finding that plaintiff’s receipt of workers’ compensation benefits bars any further recovery at law.

The facts are certainly unusual here, but the reasoning of the Court is sound:  petitioner was driving from one city location to his office at the DRW office to fill out paperwork before he could leave work.  Therefore he was still in the course of his employment.  Plaintiff probably thought the settlement on a Section 20 would keep his potential civil suit alive but the Court treated the Section 20 payment as an admission that the car accident was compensable. The more important point was that an employee cannot sue a co-employee when they are both engaged in work activities.  This case can be found at Campos v. Cruz and the City of Passaic, A-3825-16T2 (App. Div. July 12, 2018).

Thanks to our friend Ron Siegel, Esq. for bringing this case to our attention.

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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. 

Dennis Lomet worked for Lawes Coal Company from 1987 to 2012 when he died of lung cancer at the age of 47.  He installed, removed, or repaired heating and air conditioning equipment.  He never smoked cigarettes.  Before he died, he told one of his treating physicians that he thought he had been exposed to chemicals, soot and asbestos in the course of his employment.  One of his friends testified at trial that he believed he and the decedent were exposed to asbestos during the period from 1987 to 1992.

Mr. Lomet’s widow, Michelle Lomet, testified that her husband would be so dirty when he returned home from work that he would need to take two showers.  When he would blow his nose, there was black material on the tissues.

Petitioner’s expert, Dr. William Lerner, did not give strong testimony regarding exposure to asbestos.  He seemed to assume there was exposure to asbestos:  “In somebody who is exposed to chemicals like that and asbestos with no other smoking history and no other known cause for his lung cancer, a reasonable probability of these carcinogens causing Dennis’s lung cancer. . . is not unreasonable as a conclusion.”

Respondent’s expert, Dr. Jack Goldberg, testified that there was no evidence of asbestos exposure in this case.  He said that if asbestos fibers enter the lung and cause cancer, plaques are visualized on radiographical films.  He said there were none in petitioner’s studies.  He also said that none of the pathological studies indicated exposure to asbestos.  Finally, he said that there were no radiological studies showing that the decedent’s cancer was caused by chemical exposure either.

The Judge of Compensation concluded that there was no objective medical evidence showing that asbestos exposure caused or contributed to the decedent’s lung cancer.  The Judge stated that this is “a case where there is zero medical evidence and 100% medical speculation.”

Petitioner appealed and argued that there was sufficient credible evidence in the record showing exposure to asbestos.  The Appellate Division affirmed the dismissal of petitioner’s dependency claim.  “We have examined the evidence, and concur with the judge of compensation’s finding there was no evidence of substance that causally links Dennis’s lung cancer to asbestos or other chemicals to which he may have been exposed while working for Lawes.”  The Court also said that there was also no evidence of the extent of any exposure, even if there was exposure.

The case is interesting in that it focused on the threshold issue in every asbestos-related pulmonary claim: namely proof of asbestos exposure.  The Court did not believe that statements by the decedent and co-worker that they thought they were exposed to asbestos was sufficient proof of exposure.  Rather, they insisted on objective evidence.  There was no proof of any asbestos remediation project and no showing of any asbestos products in the workplace.  By far the most damaging element of the case was that the radiographic studies showed no asbestos-related plaques in the decedent’s lungs.

The case can be found at Lomet v. Lawes Coal Company, A-1169-16T1 (App. Div. July 11, 2018).

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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. 

Compiled by: Kyla Block

Commissioner Myra L. Griffin was confirmed to the Full Commission on June 29, 2018 to fill the unexpired term of former Commissioner Linda Cheatham. Governor Cooper appointed Commissioner Griffin as an emergency appointment to allow her to act as a Full Commissioner prior to her confirmation by the legislature. Commissioner Griffin will serve the remainder of former Commissioner Cheatham’s term which ends in 2022. Thereafter, she will then be eligible for reappointment to one six year term.

Deputy Commissioner Robert Harris had also been appointed by Governor Cooper to join the full Commission to replace Commissioner Nance, whose term expired on June 30, 2018, but Deputy Commissioner Harris was not confirmed by the legislature. He will remain a Deputy Commissioner for the remainder of his term. After his term ends, Deputy Commissioner Harris could be reappointed to another six year term as a Deputy by the Chair of the Commission.

The position on the Full Commission filled by former Commissioner Nance remains open. The legislature is currently out of session and any replacement is more likely to be announced in January, but Governor Cooper could appointment someone to fill the opening on an emergency basis and that individual would then be subject to confirmation when the General Assembly comes back in to session.

Ashley M. Moore has been appointed as a Deputy Commissioner in Raleigh. Ms. Moore served as a law clerk to Chair Allen, former Commissioner Linda Cheatham, and Vice-Chairman Yolanda K. Stith.

Simon Law Group, P.C.

720 Olive Street, Suite 1720, St. Louis, MO 63101

314-621-2828

MISSOURI WORKERS’ COMPENSATION CASE LAW UPDATE

April 2018 – June 2018

Claimant’s Injury Not Compensable Because There Was Nothing About that Particular Step that Caused Her Injury

MacFedries vs. General Cable Corporation, Injury No. 15-034728

On May 21, 2015, the claimant injured her right knee while stepping up onto a concrete step when she felt a popping in her right knee accompanied by pain.  She reported to her doctors that she was not really doing anything, did not fall, and was simply going up the stairs when she sustained her injury.  It was also noted that she had significant right knee arthritis and had sustained a prior right knee injury in 2014.

At a hearing, the ALJ found that the claimant’s 2015 knee injury was not compensable in light of the fact that she failed to prove she was injured in an accident that arose out of and in the course and scope of her employment.  The ALJ noted that the claimant did not present any evidence regarding the height or rise of the step or show there was anything particular about the step itself that caused her to injure her right knee.  In fact, the claimant testified that she simply stepped onto the step and felt a pop and knee pain.  The ALJ likened these facts to those in Miller vs. Missouri Highway and Transportation Commission, wherein the Court held that an injury was not compensable when the employee’s knee popped while walking on an even road surface, and just because an injury occurs during work does not mean that it arises out of work.  On appeal, the Commission affirmed the ALJ’s decision and Award with a supplemental opinion, wherein it noted that the claimant failed to show that the risk source of her injury, stepping up on a step, was work-related.

Knee Injury from Hurdle on Obstacle Course Compensable Because Claimant was  Encouraged by Employer to Complete Course in Exchange for PTO, and Claimant Not Equally Exposed to Risk of Landing Awkwardly on Obstacle Course Outside of Employment

Reiter vs. Kansas City Police Department, Injury No. 15-103652

The employer owned and maintained an obstacle course on its premises to train cadets, and the employer also allowed officers to earn two days of PTO by completing the course within a specified time limit.  Officers had to complete the course while off-duty and sign a form indicating that any injuries sustained while undertaking the course would be treated as “non-duty related injuries.”  On December 10, 2015, the claimant sustained an injury to his right knee while off-duty after leaping a hurdle on the course and landing awkwardly.  The employer denied the claim, and the claimant underwent an unauthorized ACL repair with Dr. Snyder. 

At a hearing, the employer argued that the injury was not compensable, because it occurred during a recreational activity and while the claimant was off-duty.  The claimant testified that the only reason he participated in the activity was to earn PTO, not for recreational purposes.  The ALJ held that the obstacle course was not a recreational activity, because the employer provided incentives to encourage officers to complete the course, and the injury was found compensable.  The employer was ordered to pay medical, TTD, and PPD. 

The employer appealed to the Commission, which affirmed the ALJ’s decision and Award with a supplemental opinion, wherein it noted that the ALJ came to the correct conclusion but incorrectly cited numerous pre-2005 amendment decisions in her opinion.  The Commission held that the correct analysis was whether the risk source of the injury was one to which the claimant was equally exposed outside of work.  It held that the risk of injury in this case was landing awkwardly while attempting to clear hurdles, and the risk source was the obstacle course. The Commission held that this risk was related to the claimant’s employment because he was encouraged to complete the course in exchange for PTO.  Also, the Commission found that the claimant was not equally exposed to the hazard or risk of landing awkwardly after attempting to clear a hurdle on the employer’s obstacle course in his normal non-employment life.  Therefore, the injury arose out of and in the course and scope of employment and was compensable.  The Commission also found that the waiver the claimant signed prior to undertaking the obstacle course was invalid because an employee cannot agree to waive his/her rights under workers’ compensation.

Summary Judgment Not Proper Due to Genuine Dispute Regarding Material Facts Needed to Establish Claimant Was a Statutory Employee

Barger vs. Kansas City Power & Light Company, Case No. WD80778 (Mo. App. 2018)

FACTS:  The employer (KCPL) was an energy company that used condenser tubes, which were occasionally cleaned in a process that took approximately four days.  KCPL originally used its own employees to clean the tubes, but in 2010, it contracted with a company (Projectile) to perform that task.  The claimant was an employee of Projectile and cleaned the tubes at the plant on five occasions over the course of several years.  On March 21, 2013, he was at the plant to clean the tubes when he sustained an injury to his right wrist.  He filed a workers’ compensation claim against Projectile and subsequently filed a civil suit against KCPL, which argued that the claimant could not file a civil suit because he was a statutory employee of KCPL under workers’ compensation law.  KCPL moved for summary judgment, which the Circuit Court granted.

The claimant appealed and argued that the circuit court should have tried the case rather than granting summary judgement.  On appeal, the Court noted that summary judgement was only appropriate if there was no genuine issue of material fact as to whether the claimant was a statutory employee of KCPL. Under Missouri Workers’ Compensation Law, a person is a statutory employee if the work is performed pursuant to a contract; the injury occurs on or about the premise of the alleged statutory employer; andthe work is in the usual course of the alleged statutory employer’s business.  “Usual business” is defined as activities routinely done; on a regular and frequent schedule; contemplated in a contract or agreement between the contractor and the alleged statutory employer which will be repeated over a short span of time; and performance of which without the contract would require the statutory employer to hire permanent employees. 

HELD:  The Court found there was a genuine dispute as to whether the claimant was, in fact, a statutory employee of KCPL, including questions regarding whether the tubes needed to be cleaned routinely and on a regular and frequent schedule, whether KCPL owned the necessary tools required to complete the work, and whether KCPL would have to hire permanent employees to clean the tubes if they did not contract that work out to Projectile.  Therefore, summary judgment was not proper, and the Circuit Court’s decision was reversed.

Claimant Was Statutory Employee, and Ms. Carter, the Company’s Owner, Found Personally Liable for Benefits

Rodas vs. The Carter Group, Villa Bella LLC, and Aandrea Carter, Injury No. 15-078084

The claimant worked at Villa Bella Apartment Complex when he sustained an injury to his right knee on May 18, 2015.  He was hired as a contractor by The Carter Group to do carpentry, roofing, and anything having to do with remodeling on Ms. Carter’s properties.  Ms. Carter was the sole owner of Carter Group and Villa Bella, neither of which carried workers’ compensation insurance.

At a hearing before an ALJ, Ms. Carter argued that the claimant was an independent contractor, not an employee.  The ALJ found that the claimant was a statutory employee, because Villa Bella routinely engaged in the erection, demolition, alteration, and repair of its properties, and the claimant performed work pursuant to a contract, on or about the premises of the employer, and that work was in the usual course of the employer’s business.  The ALJ ordered Villa Bella and Ms. Carter to pay PPD, TTD, and medical.

Bella Villa and Ms. Carter appealed to the Commission, which affirmed the ALJ’s decision and Award with a supplemental opinion.  The Commission agreed that the claimant was a statutory employee of Bella Villa, which would otherwise have to hire a permanent employee to perform similar work.  However, the Commission also found that Ms. Carter exclusively owned and controlled 100% of both the Carter Group and Villa Bella, which were not legitimate separate corporate entities, and she used these corporations as an “alter ego” in order to avoid her responsibilities under workers’ compensation law.  By not carrying insurance, Ms. Carter caused the claimant to incur substantial uncompensated medical expenses and lost wages.  Therefore, the Commission held that Ms. Carter was personally liable for PPD, TTD, and medical benefits.

Fund Not Liable for PPD Because No Permanent Disability Resulted from Last Work Injury

Collins vs. Kone, Inc. and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 13-023689

The claimant worked as an elevator repairman, and on April 2, 2013, he bent over in an awkward position on his knees to release an emergency hook on an elevator and had a sudden worsening of low back pain.  He was already treating for a prior work-related low back injury that he sustained in April 2012.  Prior to the 2013 incident, he noted improvement in his complaints, which were then temporarily reaggravated by the 2013 incident.  On May 28, 2013, the claimant reported to the treating doctor that his complaints had returned to the level they were prior to the 2013 incident.  The doctor opined there was not a new injury in 2013, because the claimant’s complaints were identical to those he had prior to that incident, and he declined to change Dr. Lennard’s prior work restrictions or disability rating from the 2012 injury.  The claimant and employer entered a settlement agreement for 15% PPD of the body referable to the 2013 claim.

Dr. Paul and Dr. Mullins each issued an IME report.  Dr. Paul assessed permanency in the 2012 injury alone and did not mention the 2013 injury.  Dr. Mullins reviewed the same treatment records and assessed PPD due to the 2013 incident as a separate injury.

The claimant filed a claim against the Fund and testified at his deposition that he had an increase in complaints after the 2013 incident and was not able to return to his job performing elevator repairs.  However, the ALJ did not find his testimony credible because it was inconsistent with his medical records, wherein he also reported an increase in pain after he drove to Fort Leonard Wood to work on an elevator on April 19, 2013, seventeen days after the 2013 incident.  The ALJ held that the claimant did not sustain any additional permanent disability as a result of the 2013 incident, and therefore, the Fund was not liable for any permanency in that matter.  On Appeal, the Commission affirmed the ALJ’s decision and Award.

Employer Liable for Future Medical for Retained Hardware Under Statute Requiring Employers to Provide Prosthetic Devices to Cure and Relieve Effects of Work Injury

Penning vs. Harley Davidson, Injury No. 13-046307

The claimant felt a pop and developed right wrist pain at work on May 13, 2013 while pushing down on a drive train.  He was directed to Dr. Toby, who diagnosed a chronic scaphoid fracture non-union that was pre-existing and not related to the work injury.  Dr. Toby also diagnosed right carpal tunnel syndrome, which he opined was caused by swelling due to the chronic scaphoid non-union, and he performed a wrist fusion with hardware and carpal tunnel release.  At the request of claimant’s counsel, Dr. Guinn evaluated the claimant and related both the fracture and the carpal tunnel syndrome back to the work accident.

At a hearing, the ALJ found Dr. Guinn’s opinion persuasive and awarded 35% PPD of the right hand/wrist.  The ALJ also opined that because the claimant had retained hardware in the right wrist, the employer was liable for future medical referable to the same, pursuant to the statute that requires employers to provide prosthetic devices to cure and relieve the employee from the effects of the work injury.

On Appeal, the Commission affirmed the ALJ’s decision and Award with a supplemental opinion, wherein it noted that the claimant’s condition was causally related back to the work accident, because the accident caused a change in the pathology of the claimant’s wrist that produced immediate, unprecedented pain and disability that necessitated treatment.  The Commission also found that the claim for carpal tunnel syndrome was not prohibited, although the claimant did not specifically plead carpal tunnel syndrome in his Claim for Compensation.

Commission Could Not Commute PTD Award to Lump Sum Because Agreement Did Not Constitute a “Claim,” Lump Sum Amount Was Not Present-Day Value of PTD Benefits, and Agreement Did Not Plead Unusual Circumstances

Dickemann vs. Costco Wholesale Corp., Case No. SC96513 (Mo. Sup. Ct. 2018)

FACTS:  The claimant sustained a compensable work injury in July 2010.  An ALJ ordered the employer/insurer to pay PTD benefits, and that Award became final in April 2014.  In November 2016, the employer and claimant entered into an Agreement to commute the Award to a lump sum of $400,000.00.   However, the Commission refused to approve the Agreement and held that it lacked statutory authority to do so.

The claimant appealed to the Missouri Supreme Court and argued that pursuant to a prior decision inNance vs. Maxon Elec. Inc., a post-Award agreement to forego weekly benefits in exchange for a lump sum payment is a claim, and the Commission has to approve it if the employee fully understands his/her rights, has agreed to the settlement voluntarily, and the agreement was not procured as the result of undue influence or fraud.

HELD:  On appeal, the Court affirmed the Commission’s decision.  It held that the Commission did not have authority to consider the Agreement, because it did not constitute a claim under workers’ compensation law, because the claim had already been resolved in April 2014.  In this opinion, the Court overturned the prior decision inNance.  The Court also held that the Commission did not have statutory authority to approve the Agreement because the lump sum to be paid ($400,000.00) was not the financial equivalent of the present-day value of the PTD benefits, which was at least $590,000.00 when taking account of the claimant’s life contingency.  The Court further held that the Commission could not approve the Agreement because commutation is only allowed under clearly unusual circumstances, but the Agreement did not allege any unusual circumstances.

Missouri Court of Appeals Does Not Have Authority to Review Award of Temporary or Partial Benefits in a Workers’ Compensation Claim

Leech vs. Phoenix Home Care, Inc., Case No. SD35220 (Mo. App. 2018)

FACTS:  The ALJ awarded the claimant TTD benefits in an amended Temporary Award, which was affirmed by the Commission.  The employer filed an appeal with the Court.  The claimant subsequently filed a Motion to Dismiss the employer’s appeal on the grounds that the Court does not have statutory authority to review an Award of temporary or partial benefits.

The employer pointed to a Missouri regulation that states that, “Any party who feels aggrieved by the issuance of a temporary or partial award by any administrative law judge may petition the commission to review the evidence upon the ground that the applicant is not liable for the payment of any compensation…” 8 C.S.R., section 20-3.040.  The employer argued that the Court should consider its appeal because it was denying liability for any compensation in this matter.

HELD:  The Court was not persuaded by the employer’s argument and granted the claimant’s Motion to Dismiss.  It held that it has statutory authority to review an appeal from afinal Award of the Commission, not temporary or partial awards, and as an appellate court, its authority to consider an appeal is governed by statute, not by administrative regulations.

Employer Liable for Total Knee Replacement, Despite Significant Pre-Existing Arthritis, Because Injury Complicated the Arthritis and Caused Increased Pain and Need for Surgery

Pierce vs. Bedrock, Inc., d/b/a Tri-State Motor Transit Co., Injury No. 09-072827

The claimant sustained a compensable right knee injury on September 14, 2009.  Dr. Parmar performed an ACL repair and found evidence of Grade III/IV chondromalacia.  He placed the claimant at MMI and opined that he would need a total knee replacement (TKR) in the future due to his pre-existing arthritis.  Dr. Stuckmeyer evaluated the claimant at his attorney’s request and opined that the need for a TKR flowed from the claimant’s most recent injury.  The claimant settled with the employer for 26% PPD of the right knee, and medical was to be left open for a period of one year after the date of settlement, which was approved on May 4, 2012.  One month later, the claimant demanded that the employer authorize a TKR, which was denied in light of Dr. Parmar’s opinion.

On November 3, 2014, the claimant filed a Motion to Reactivate his claim.  The employer filed an objection, and the claimant requested a hearing.  At a hearing, the ALJ denied the Motion because no new physical evidence or medical opinions were admitted at hearing that were not previously available at the time the claimant voluntarily entered the compromise settlement.  The ALJ also found Dr. Parmar’s opinion persuasive and held that the employer was not liable for the TKR.

On Appeal, the Commission reversed the ALJ’s decision and Award.  It found that regardless of reactivation, it had jurisdiction to determine liability for future medical treatment because the claimant requested surgery during the time period that future medical was to remain open under the settlement agreement.  The Commission also held that although the claimant had a history of prior knee issues before the work injury, he did not require surgical intervention untilafter the work injury.  Therefore, the work injury was the prevailing factor in causing a change in pathology in the claimant’s right knee and a permanent increase in disabling symptoms, which necessitated a TKR.  Therefore, it did not matter if the surgery was required because the work injury complicated a pre-existing condition, because once the accident and injury were found compensable, the claimant only needed to show that the need for treatment flowed from the work injury.

Compensable Occupational Disease Claim for Chronic Right Rotator Cuff Tear Due to Repetitively Slicing Meat and Cheese

Dockery vs. Dierbergs Markets, Inc., Injury No. 14-049534

The claimant, a 64-year-old long-time deli worker, sliced 300-400 slices of various meats and cheeses each shift.  On November 6, 2014, she had sudden onset of right shoulder pain while pulling on a ham.  An MRI showed a full thickness rotator cuff tear.  The employer sent her to Dr. Nogalski, who diagnosed a shoulder strain and chronic rotator cuff tear and recommended conservative treatment, including physical therapy.  She was subsequently released from care and followed up with her own doctor, Dr. Sigmund, who opined that her rotator cuff tear probably was pre-existing, and the changes on the MRI looked chronic, but she may have done something at work to exacerbate the problem or extend the tear.  Dr. Sigmund performed a right shoulder arthroscopy.

Dr. Schlafly evaluated the claimant at her attorney’s request and opined that the years she worked as a deli cutter was the prevailing cause of her chronic rotator cuff tear, because repetitive use of the shoulder could cause a gradual progressive tearing where symptoms do not develop until the tear reaches a certain point in size.  Dr. Nogalski disagreed with Dr. Schlafly and opined that the MRI did not show any acute findings, and work was not the prevailing cause of the tear. 

At a hearing, the ALJ found the opinion of Dr. Nogalski more persuasive and denied compensation.  On Appeal, the Commission noted that the claimant made hundreds of slices of meat/cheese each day using her right hand/arm to operate the slicer, and she also routinely carried heavy boxes of meat weighing 40-50 pounds.  The Commission reversed the ALJ’s decision and Award and held the employer was responsible for past medical expenses, TTD, and 35% PPD of the right shoulder.

Firefighter’s Claim for NHL Due to Exposure to Fumes/Smoke Found Compensable Because Claimant Established Increased Risk/Probability of Developing NHL Due to Occupational Exposure

Cheney (Deceased) and Surviving Spouse vs. City of Gladstone, Injury No. 08-066683

The claimant, a longtime firefighter, developed non-Hodgkin’s lymphoma (NHL).  He filed a workers’ compensation claim, underwent treatment, and subsequently died as a result of the disease on May 22, 2014.  He was exposed to smoke and other emissions during his work as a firefighter, including fumes from burning household objects that contained toxins and carcinogenic chemicals.  He was also regularly exposed to diesel fumes in the fire station due to poor ventilation.

Dr. Lockey and Dr. Koprivica testified that the claimant’s occupational exposure as a firefighter was the prevailing factor in causing his NHL.  Dr. Lockey cited a statistical correlation between firefighting and NHL.  Dr. Shah testified on behalf of the employer that NHL has no known cause and is a disease to the lymphatic system, not the respiratory tract or cardiovascular system, and age, race, and obesity are known risk factors for NHL.  The claimant’s treating oncologist also opined in a report that it is impossible to know the cause of NHL.

At a hearing, the ALJ found that the claimant failed to prove that his job duties as a firefighter were the prevailing factor in causing his NHL.  The ALJ found the opinions of Dr. Shah and the oncologist persuasive and opined that statistical correlation does not equal causation.  The claimant argued that the firefighter presumption should apply, which states that “diseases of the lungs or respiratory tract, hypotension, hypertension, or disease of the heart or cardiovascular system, including carcinoma, may be recognized as occupational diseases for the purposes of this chapter and are defined to be disability due to exposure of paid firefighters of a paid fire department… if a direct causal relationship is established.”  The ALJ rejected this argument because medical causation had not been established, and NHL was not one of the diseases listed in that provision.

On Appeal, the Commission reversed the ALJ’s decision and Award.  The Commission held that with respect to occupational disease, the claimant does not need to establish causation to a medical certainty.  The Commission found the claim compensable because it found that there was an increased risk of contracting NHL as a result of occupational exposure as a firefighter.  The Commission did opine it was unclear whether NHL qualifies as one of the diseases in the firefighter provision, but it ultimately found that it did not matter, because the claim was compensable regardless.  Therefore, the employer was ordered to pay death benefits to the claimant’s dependent widow.

No Safety Penalty Because Telling Employees to Obey Any Safety Rules at a Customer’s Plant Was Not Sufficient to Trigger a Penalty

Marquess (Deceased) and Estate of Jesse Marquess and Estate of Patricia Marquess vs. Fischer Concrete Services, Inc. and University of Missouri Healthcare, Injury No. 11-068578

The claimant was working as a pneumatic tanker truck driver for the employer and delivered material to customers’ plants.  It was customary for drivers to open the center hatch on the top of the tank to allow it to be filled.  The trucks had ladders on the side, but some customers required drivers to use a “gantry,” which was a platform with a permanent set of steps and railings.  On August 27, 2011, the claimant was on site at a customer’s plant (Plant) when he climbed the ladder on his truck to open the hatch and fell to the ground, and he was rendered a paraplegic.  The Plant did require all drivers to use a gantry while on the property.  There was a written safety rule posted on the wall at the Plant that announced this policy.  The employer had a policy that while on site at a customer’s plant, all drivers were to adhere to any safety rules at that facility.  During treatment, the employer paid only 50% of the medical bills and TTD, because it argued it was entitled to a safety penalty because the claimant failed to comply with its policy when he violated the Plant’s safety rule regarding the gantry.

At a hearing, the ALJ declined to award a safety penalty because the Plant’s rule was not the employer’s safety rule, and simply stating that drivers should adhere to a customer’s rules is akin to suggesting that a worker should “be safe” or “not do anything stupid,” which is not sufficient to trigger a safety penalty.  The ALJ found the claimant PTD and ordered the employer to pay the rest of the TTD and medical owing and provide future medical.  The claimant subsequently died, and his surviving spouse filed an Amended Claim for death benefits before she also died, at which time her estate was substituted as a claimant, along with the claimant’s estate and the guardian of their dependent granddaughter.

On appeal, the Commission affirmed the ALJ’s decision and Award with respect to the safety penalty, reasoning that telling drivers to obey the safety rules at other companies’ facilities is akin to telling drivers to “obey all traffic laws,” which has previously been found insufficient to assert a safety penalty.  The Commission also considered the issue of death benefits and held that the prevailing cause of the claimant’s death was underlying coronary artery disease, not any conditions relating to his work injury.  Therefore, the employer was not responsible for the same.

No Safety Penalty Because Employer Failed to Show It Made Reasonable Efforts to Ensure Employees Obeyed Reasonable Safety Rules

Elsworth vs. Wayne County Missouri, Case No. SD34919 (Mo. App. 2018)

FACTS:  The claimant, an 18-year-old who was on the job less than a month, was driving a dump truck when he rounded a corner and rolled the truck, which placed him in a persistent vegetative state.  He had a commercial drivers’ instruction permit for two weeks prior to his first day of work, and he was directed to drive the dump truck by himself.  The employer alleged the claimant was speeding and not wearing a seatbelt at the time of the accident, and it argued it was entitled to a safety penalty reduction in benefits.

Evidence at the hearing indicated that the claimant was accompanied by other drivers on a few occasions and was told on at least two occasions to wear his hard hat and seatbelt and observe all traffic laws while driving.  No other evidence was presented at the hearing regarding what, if any, specific safety training the claimant underwent.  The ALJ found that the employer failed to prove it was entitled to a safety penalty.  On appeal, the Commission affirmed the ALJ’s decision and Award.

HELD:  On appeal, the Court noted that in the past, specific factors have been considered to determine whether an employer has taken reasonable efforts to cause compliance with safety rules, including: distribution of written safety materials; scheduling and presentation of regular training seminars educating employees concerning the rules; warning employees that disciplinary action will be taken if employees fail to follow necessary guidelines; completion by employees of a written test to confirm understanding of the rules; and whether known violations of the safety rules have previously gone unpunished.  The Court held that the Commission could have found from the evidence that the employer did not provide specific training regarding dump truck safety and did not make reasonable efforts to enforce safety rules, especially considering that the claimant was directed to drive a commercial vehicle by himself with almost no experience.  The Court affirmed the Commission’s decision and Award.

Employer Liable for PTD After Right Rotator Cuff Tear/Repair and Conservative Left Shoulder Treatment, Despite Fact that Claimant Had Only Second Grade Education and Could Not Speak English, and Claimant Did Not Develop Left Shoulder Symptoms Until Two Years After Work Accident

Pineda vs. EFC Corporation, Injury No. 06-036310

The claimant, a 59-year-old employee from Mexico with a second-grade education and limited English skills, sustained a shoulder injury on April 28, 2006 while lifting heavy windows at work.  The doctor diagnosed a partial rotator cuff tear and labral tear and performed an arthroscopic repair.  The claimant continued to have significant difficulty with the right shoulder after surgery, despite undergoing injections.  He returned to work and sustained a second injury on January 31, 2008, when he developed left shoulder pain, which he attributed to using only his left arm at work to compensate for his right shoulder.  He treated conservatively for the left shoulder.  The employer was not able to accommodate the claimant’s restrictions beginning in February 2009, and he has not worked since.

Both parties submitted expert opinions.  Dr. Volarich evaluated the claimant at his attorney’s request, and Dr. Lennard evaluated him at the employer’s request.  Both doctors assessed PPD of the bilateral shoulders and recommended permanent restrictions.  Dr. Volarich believed the conditions in both shoulders resulted from the 2006 work injury and opined that the claimant was PTD as a result of the 2006 injury alone.  Dr. Lennard opined the left shoulder condition was the result of a separate work injury that occurred in 2008.  With respect to vocational evaluations, Mr. Eldred opined the claimant was PTD as a result of the April 2006 injury alone.  Mr. England opined that considering Dr. Lennard’s restrictions in combination with the claimant’s academic limitations and language barrier, he was likely unemployable.

At a hearing, the ALJ held that the claimant was PTD in light of the fact that he continued to take narcotic pain medication, needed to lie down during the course of the day, and is unable to speak, read, or write in English.  The ALJ also held that the claimant’s left shoulder condition followed as a natural and legitimate consequence of the original accident in 2006, and there was not a separate injury in 2008.  Therefore, the employer was liable for PTD benefits instead of the Fund.  On appeal, the Commission affirmed the ALJ’s decision and Award with a supplemental opinion, wherein it agreed that the claimant’s left shoulder complaints were the result of the 2006 work injury.

Employer Liable for PTD Benefits for Operated Rotator Cuff Tear, Despite Fact He was Already Limited by Age, Education, and Other Life Factors; Future Medical Left Open Due to Retained Hardware

Duarte vs. Butterball LLC and Treasurer of the State of Missouri as Custodian of Second Injury Fund, Injury No. 09-111523

The claimant was a 76-year-old from Peru who spoke very little English, and who reportedly earned a college degree in Peru.  He developed right shoulder pain while working for the employer on the meat processing line, which involved repeated overhead cutting and pulling to remove the meat from 58 turkeys per minute.  The claimant treated on his own with Dr. Ogden, who diagnosed AC joint osteoarthritis and a chronic rotator cuff tear due to arthritis.  Dr. Lieurance performed an unauthorized right shoulder arthroscopy on June 24, 2009 and a second surgery on April 21, 2010.  The claimant was not able to return to work for the employer after March 31, 2009 due to his shoulder restrictions, and he testified that he was also rejected for a job with another employer for that reason.  The claimant did have several pre-existing conditions, including cataracts and DDD of the lumbar and cervical spine, but he did not have any work restrictions referable to those conditions.

At his attorney’s request, the claimant was evaluated by Dr. Volarich, who placed him at MMI, assessed 40% PPD of the right shoulder, and recommended permanent work restrictions of no overhead use of the right arm and lifting restrictions.  Dr. Parmet evaluated the claimant on behalf of the employer and diagnosed degenerative arthritis with a secondary rotator cuff tear, and he opined that pre-existing arthritis was the prevailing factor in causing the claimant’s condition, not his job duties.  Vocational experts for both parties opined the claimant was PTD and unemployable.  However, Mr. Eldred opined he was PTD due to the right shoulder injury alone, whereas Mr. Dreiling opined he was not PTD due to the right shoulder injury alone, because that injury would not impact the claimant’s ability to perform prolonged standing/walking.

At a hearing, the ALJ found the injury compensable.  With respect to PTD, the ALJ noted that although the court could weigh factors such as the employee’s age, education, physical condition, work history, job skills, and pain when determining PTD, those are not ratable disabilities that are subject to liability from the Fund.  Therefore, the ALJ held that the claimant was PTD as a result of the last injury alone, despite the fact that he was already very limited in the types of work he could perform when he moved to the United States due to his age, education, and other life factors.  The ALJ also concluded that future medical should be left open in light of the fact that the claimant had retained hardware which may require further intervention in the future.  Therefore, the employer was found liable for PTD benefits as well as TTD, past medical, and future medical.  On Appeal, the Commission modified the ALJ’s decision and Award with respect to TTD benefits but otherwise affirmed the Award with respect to PTD and future medical.

Disability Payments Not Credited Against TTD Award Because Employer/Insurer Failed to Clearly Raise the Issue or Provide Any Records at the Hearing to Prove Entitlement to a Credit for Same

Barnett vs. Harley Davidson, Injury No. 15-065149

The claimant worked as an engine assembler at Harley Davidson for 12 years, and he alleged complaints to multiple body parts due to his repetitive job duties.  He treated in plant medical and was then directed to his PCP, who recommended injections and then performed a cervical fusion at C5-6.  Both sides obtained medical opinions, and at a hearing, the ALJ awarded 25% PPD of the body referable to the cervical spine as well as PPD and TTD.

On Appeal, the employer argued it was entitled to a credit for short-term disability payments received by the claimant during the time TTD was owed.

The Commission affirmed the ALJ’s decision and Award with a supplemental opinion.  The Commission declined to award a credit because the employer failed to raise the issue at the hearing or present any records or documentation regarding the source of any short-term disability payments to the claimant.  Pursuant to statute, no benefits derived from any source besides the employer and workers’ compensation insurer shall be considered in determining the compensation due.  Therefore, without documentation that short-term disability payments were made by the employer or the employer’s workers’ compensation carrier, the employer failed to meet its burden to prove that it was entitled to a credit.

Insurer Liable for Enhanced Mesothelioma Benefits Despite Fact that Insurer Did Not Insure Employer During Period of Last Exposure; Statute Providing Enhanced Benefits Constitutional When Applied to Claims Filed After January 1, 2014, Regardless of Date of Last Exposure

Accident Fund Insurance Co.; E.J. Cody Co., Inc. vs. Casey/Murphy, Case No. SE96899 (Mo. Sup. Ct. 2018)

FACTS:  The claimant worked as a floor tile installer for several different companies, and he last worked as a tile installer for the Employer from 1984-1990.  During that time, he was exposed to asbestos while removing old tile.  He retired in 1990, was diagnosed with mesothelioma in 2014, and filed a Claim against the Employer in February 2015.  At the time the Claim was filed, the Employer had an insurance policy purchased from the Insurer with a mesothelioma endorsement that provided coverage for all mesothelioma claims filed on or after January 1, 2014.  The Insurer did not insure the Employer from 1984-1990, when the claimant was last exposed.  The claimant subsequently died from mesothelioma, and his widow (Murphy) proceeded with the Claim following his death.

At a hearing, the ALJ found the Employer/Insurer liable for the enhanced benefits.  On appeal, the Commission affirmed the ALJ’s decision and Award and held that the last exposure rule did not apply to claims made under the toxic exposure provision.  Therefore, the Insurer was liable for the enhanced benefits, despite the fact that it did not insure the Employer at the time of last exposure.  The Commission also limited recovery to Murphy because the amended claim did not identify the claimant’s eight adult children as dependents/claimants.

On appeal, the Insurer argued that it could not be liable for this Claim because it did not insure the Employer at the time the claimant was last exposed to asbestos, and it argued that the toxic exposure provision was unconstitutional if applied retrospectively.  Murphy argued that the Commission erred by excluding Casey’s eight children from the final Award. 

HELD:  The Missouri Supreme Court affirmed the Commission’s decision and Award but modified it with a supplemental opinion, wherein it included Casey’s eight children in the Award.  The Court found that the Employer accepted liability under the statute when it purchased a policy from the Insurer to cover additional benefits for all mesothelioma claims filed on or after January 1, 2014, which would include the current Claim, which was filed in 2015.  The insurance endorsement specifically stated that it applied to any claims filed after January 1, 2014.  The Court reasoned that “the relevant inquiry in this matter is not under whose employment Mr. Casey was last exposed, but whether the terms of the employer’s policy provide coverage.”  The Court also found that the provision was not unconstitutional as applied in this case, because the Claim was filedafter January 1, 2014, and the Employer/Insurer affirmatively agreed to provide coverage for mesothelioma claims filed after January 1, 2014.  It did not matter that the claimant’s employment and exposure with the Employer occurredprior to January 1, 2014.

Notably, the Court found that the last exposure rule that is used to determine liability for occupational disease claimsdoes not apply to toxic exposure claims.  Therefore, it is unclear whether any/every employer who has employed a claimant that was exposed to asbestos during that employment will have potential liability for enhanced benefits under this provision.

Travelers Did Not Effectively Cancel Policy Prior to Date of Injury Because Did Not Provide Unequivocal, Advanced Notice of Cancellation That Strictly Complied with Policy’s Terms

Chudnovtsev vs. BSI Constructors, Inc; St. Louis Brick & Stone, Injury No. 14-027901

St. Louis Brick (SLB) was a subcontractor of BSI.  It purchased workers’ compensation insurance from Travelers for the period November 2013 – November 2014.  According to the terms of the policy, it could be cancelled unilaterally if Travelersmailed or delivered advanced written notice of the cancellation.  SLB had an inconsistent payment history.  On March 13, 2014, Travelers issued a Notice of Cancellation (March Notice) for non-payment with an effective date of April 2, 2014 and advised that the policy “is cancelled,” although it also noted that cancellation could be rescinded if the minimum amount due was received before that date.  One month later, on April 15, 2014, Travelers generated a lapse of insurance letter (April Letter) to advise SLB that coverage was terminated as of April 2, 2014.  However, this again advised that coverage could be reinstated if SLB paid the outstanding premium.  On April 17, 2014, SLB generated a check payable to Travelers.  However, a stop payment order was issued sometime between April 22, 2014 and April 24, 2014, and Travelers returned the check.

On April 21, 2014, the claimant sustained a compensable injury while working for SLB and filed a workers’ compensation claim against SLB and BSI, the general contractor.  Travelers argued it did not have a valid policy for the alleged April 21, 2014 date of injury because the policy was cancelled on April 2, 2014.  The parties entered into an agreement regarding permanency, and the only remaining issue was whether Travelers was responsible for payment of benefits as opposed to BSI’s insurer.

At a hearing, the ALJ noted that notice of cancellation in Missouri must be very specific, strictly comply with the terms of the policy, unequivocal and unmistakable, and it must be a present cancellation that is not dependent upon some future event.  The ALJ concluded that the March Notice was not an effective cancellation because it advised that Travelers could rescind the cancellation upon receipt of the minimum due.  The ALJ also found that the April Letter did not effectively cancel the policy because it did not provide advanced notice of the cancellation prior to the April 2, 2014 cancellation date, pursuant to the terms of the policy.  The ALJ did conclude that the April Letter could have effectively cancelled after the April 15, 2014 date, except that Travelers could not prove that it “mailed or delivered” the notice as required by the policy.  Simply showing a copy of the letter with SLB’s address was not sufficient.  Therefore, the ALJ held that Travelers did have an effective insurance policy on the claimant’s date of injury and was responsible for paying workers’ compensation benefits.  On appeal, the Commission affirmed the ALJ’s decision and Award.

Patrick Malone began working for the Pennsauken Board of Education in 2007 as a custodian.  He said he would sweep floors, take out the trash, clean the blackboards and desktops, remove gum and shoe marks from floors, sometimes climb ladders, and clean toilets, floors and walls.  He also said in the summer he would remove furniture and filing cabinets and put them in the hallway so that classrooms could be cleaned.  He said he did a lot of kneeling, stooping, and squatting, but he never said how frequently he did any of these tasks.  He had been doing this work for many years with other employers.  By 2012 he began to experience constant pain in both knees and was diagnosed with osteoarthritis in both knees.  In 2012 and 2013 he had both knees replaced.

Malone filed an occupational claim petition against the Pennsauken Board of Education, alleging that his work duties aggravated his preexisting but asymptomatic osteoarthritis, requiring bilateral knee replacements.  The Board of Education, represented by Capehart Scatchard, denied the claim.

Petitioner produced Dr. Ralph Cataldo, an anesthesiologist, as his expert.  Dr. Cataldo said that he found objective findings consisting of surgical scars from the knee replacements and some swelling about both knees.  He said that in his opinion the work duties aggravated petitioner’s preexisting osteoarthritis because petitioner was asymptomatic in 2007 and was symptomatic after performing work duties.  He estimated 70% permanent partial disability in each leg.

Respondent produced Dr. Francis Meeteer, a family and occupational medicine physician, who testified that petitioner’s osteoarthritis condition was chronic, progressive and degenerative and due to the natural aging process, not to work.

The Judge of Compensation found Dr. Cataldo to be more credible.  She commented as follows:

[w]hen called upon to make findings neither the Court or medical experts should ignore commonly known facts to wit:  an extensive amount of bending, squatting, and lifting can cause increased discomfort in one’s knees.  The Court finds the testimony of Dr. Cataldo satisfies the burden of establishing a causal connection with probability that Petitioner’s injuries were aggravated by his occupational duties.

The judge awarded petitioner 55% permanent partial disability credit 20% for prior disability plus one year of temporary disability benefits for the year petitioner was out of work because of his knees.  The permanency award came to $109,214.  Petitioner returned to work for the Board of Education.

Respondent appealed and argued that Dr. Cataldo’s opinion was a net opinion, meaning that he never provided any medical basis for his opinion on causation.  The Court agreed, noting that there was minimal evidence in this case.  “First, there was no evidence concerning how often and to what extent Malone engaged in the various physical activities about which he testified to perform his job duties.  Simply to identify the tasks he performed and that they entailed “a lot” of kneeling, stooping, and squatting fails to impart any reliable information about how arduous and physically demanding Malone’s job actually was.”

The Court added that the medical evidence was also deficient. “Second, the only objective medical evidence Cataldo identified were the surgical scar and the swelling he found around each knee. Neither form of evidence indicates – and Cataldo did not explain – how Malone’s job duties aggravated the underlying osteoarthritic condition.”

The Appellate Division criticized the simplistic analysis on causation performed by Dr. Cataldo. “In the final analysis, the crux of Cataldo’s opinion is that, because Malone’s knees were asymptomatic before but became symptomatic after he began working for the Board, then his knee condition must have been caused by the tasks he performed for the Board.”  The Court said that the record is devoid of the necessary objective medical evidence to establish a causal connection between Malone’s bilateral knee condition and his work duties.

For these reasons, the Appellate Division reversed the award and ruled in favor of the Board of Education.  The Court did not remand the case for further findings.

This case is significant for practitioners and employers because it shows that the focus in occupational orthopedic claims, just like pulmonary claims, must be on medical or scientific evidence supporting or rejecting causation.  In an occupational claim, unlike a traumatic claim, the claimant must show not only that the condition arises from work and occurs during work, but also that the medical condition is produced by causes that are characteristic of or peculiar to work in a material degree.

In the end, Dr. Cataldo based his opinion on timing, not medical analysis.  It is clearly flawed reasoning to assume proof based on timing alone in an occupational disease claim.  His contention was that there was causation merely because petitioner became symptomatic after working with a preexisting osteoarthritic condition. It is the sort of logic that would support a causal connection between the rooster crowing and the rising of the sun. As Lora Northen, Esq. of Capehart Scatchard has often stated in seminars, that sort of logic would mean that sleeping causes carpal tunnel syndrome because the numbness and tingling usually happen at night.

Petitioner lost this case because there was absolutely no testimony at trial regarding any medical studies or literature showing that bending, stooping or squatting worsens preexisting osteoarthritis to the degree that knee replacements are needed. In fact, the Arthritis Foundation promotes an exercise program for those with osteoarthritis. The question is the degree of physical activity which is helpful or harmful. In this case, the record was silent on the extent and frequency of physical activity engaged in by the petitioner.

This case was expertly handled by Adam Segal, Esq. of Capehart Scatchard with assistance on the trial and appellate briefs by the undersigned. The case can be found at Malone v. Pennsauken Board of Education, A-3181-16T1, (App. Div. June 29, 2018).

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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.