State News

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

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

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

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

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

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

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

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

By Cortney Lemos-Crawford and Kelsey Paddock

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

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

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

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

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

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

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

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

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

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

My Two Cents

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

About the Author

This blog submission was prepared by Mike Fish, an attorney with Fish Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Fish by e-mailing him at mfish@fishnelson.com or by calling him directly at 205-332-1448.

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

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

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

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

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

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

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Simon Law Group, P.C.

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

314-621-2828

MISSOURI WORKERS’ COMPENSATION CASE LAW UPDATE

January 2019 – March 2019

Claimant Not Injured in Course and Scope of Employment Because Claimant Was Equally Exposed to Risk of Walking on Even Flat Surface Outside of Work                     

Annayeva vs. SAB of the TSD of the City of St. Louis and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 13-000909

On January 8, 2013, the claimant, a teacher, sustained an injury when she slipped and fell.  She had just entered the school building using a general entrance and was carrying student papers and lesson plans, although she was not “clocked in” at the time.  She did not see any defects in the linoleum tile floor, and when filling out an investigation report, she did not mention any ice, salt, or dirt on the floor that caused her to slip and stated that she “could not determine the cause of the accident.”  The claimant alleged injuries to numerous body parts as well as a psychological injury.  She underwent minimal authorized treatment, and when no additional treatment was authorized, she treated on her own.

At a Hearing, the ALJ found the claimant’s testimony not credible and opined that her description of her disabilities verged on the point of malingering.  The ALJ noted there was little or no objective medical findings to support any of the claimant’s anomalies, and her claim was denied due to lack of causation.

On appeal, the Commission affirmed the ALJ’s decision and Award with a supplemental opinion wherein the Commission found that this matter was not compensable because the claimant was not injured in the course and scope of her employment.  The Commission found that nothing about the claimant’s work caused her to fall, and the hallway was “normal” where she fell.  When specifically asked by her attorney, the claimant testified that the floor was dirty and moist, but the Commission did not find her testimony credible and noted that none of the medical records noted any hazardous conditions on the hallway floor.  The Commission found that without additional support in the record showing the alleged hazardous condition of the hallway floor, the only risk source was that of walking on an even flat surface, to which the claimant was equally exposed in her normal non-employment life.  Therefore, the claimant failed to show that her injury arose out of and in the course and scope of employment.

Claimant Injured in Course and Scope of Employment in MVA While Traveling to Patient's Home;  Employer Not Entitled to Safety Violation Penalty, Even Though Claimant Was Not Wearing Seatbelt, Because Employer Did Not Have a Separate Safety Policy Requiring Use of Seatbelt

Hayden vs. SW Center for Independent Living, Injury No. 16-104167

The claimant was injured on October 7, 2016 while working as a home health aide.  She was required to secure all health forms and documents for the company regarding her patients in a secure place within her home, received assignments by phone call from the scheduler, and she frequently traveled directly from home to the first patient’s residence to begin working.  On the date of accident, the claimant dropped off her son at school, returned to her home, completed initial paperwork on her patients, and then began driving from her home to a patient’s home.  The route she was taking was a direct route to her patient’s home, although in the opposite direction of the employer’s principal place of business.  She was in a motor vehicle accident and was ejected from the vehicle.  She sustained multiple injuries to her back, ribs, and shoulders as well as to her left lower extremity, which was amputated below the knee.

The claimant gave conflicting statements regarding whether she was wearing a seatbelt at the time of the accident, but the accident report indicates that she was not using a seatbelt.  The employer presented no evidence of a specific safety rule requiring the use of a seatbelt, and the claimant could not recall such a rule.

In a temporary and partial Award, the ALJ found that the claimant was traveling to her first assignment of the day at the time of the accident, not to the employer’s principal place of business.  The ALJ also found that the claimant was traveling to that location solely for the benefit of the employer, and traveling for work placed her at an increased risk of injury that to which she was exposed in her normal non-employment life.  Therefore, the ALJ found that the claimant was injured within the course and scope of her employment.  The ALJ also found that the employer was not entitled to a safety violation penalty simply because the claimant failed to wear a seatbelt while operating a motor vehicle, despite the fact that wearing a seatbelt was required by law.  This was because there was no credible evidence that the employer had adopted a separate safety rule requiring that employees wear seatbelts while driving.  On Appeal, the Commission affirmed the ALJ’s Decision and Award.

Employer/Insurer Admitted Prevailing Factor When It Failed to Timely Answer the Claim for Compensation, and Commission Found Injury Occurred Within Course and Scope of Employment

Wright vs. Echota Systems, Inc. and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 12-091385

In April 2012, the claimant, a 70-year-old electrician, was required to climb seven flights of stairs to reach his tools because the elevator was out of order.  When he reached the seventh floor, he suffered a stroke followed by a series of subsequent strokes in 2014 and 2015.  The claimant did have a prior cardio embolic stroke as well as a history of CAD, atrial fibrillation, and hypertension, and he was taking blood thinners on his date of injury.  Evidence also established that he had done work of a similar nature at other high-rise buildings at other locations in the months leading up to his date of injury.  The claimant’s attorney filed a Claim alleging that the claimant was PTD and also that the claimant was injured “in the course and scope of his employment while climbing seven flights of stairs and exerting unusual and extraordinary physical exertion, which was the prevailing factor in causing his stroke and resulting in severe injury and permanent disability.”

Dr. Farrar and Dr. Sand opined that the prevailing factor in causing the claimant’s stroke was his preexisting medical conditions, not climbing seven flights of stairs.  Dr. Koprivica examined the claimant at the claimant’s attorney’s request and opined that the claimant was at risk of having a stroke because of his medical conditions, but the prevailing factor in causing this particular stroke was the unusual stress of climbing seven flights of stairs.

At a Hearing, the ALJ noted that the employer/insurer had filed a late Answer to the Claim for Compensation, and therefore, all facts alleged in the claim were deemed as admitted.  The ALJ found that this included the allegation that climbing seven flights of stairs was the prevailing factor in causing the stroke and resulting injury and disability.  The ALJ found that the claimant was injured in the course and scope of employment and was PTD as a result of the primary injury alone, and the employer/insurer were responsible for paying PTD benefits as well as past and future medical.

On appeal, the Commission affirmed the ALJ’s decision and Award with a supplemental opinion.  The Commission found that the test for course and scope has two prongs.  Whether the accident was the prevailing factor in causing the injury was the first prong, and this was admitted when the employer/insurer failed to file a timely Answer.  The second prong was whether the hazard or risk was unrelated to the employment to which the claimant would have been equally exposed outside of work in his normal nonemployment life, and the Commission held that it was not.  Therefore, because “exerting unusual and extraordinary physical exertion” resulting from climbing seven flights of stairs was the prevailing factor in causing the injury, and the stroke did not come from a risk unrelated to employment, the ALJ made the correct legal conclusion that the claimant’s injury arose out of and in the course of his employment.

No Missouri Jurisdiction Because Accident Did Not Occur in Missouri, and Claimant Failed to Show That Contract of Employment was Made in Missouri or Employment was Principally Located in Missouri During 13 Calendar Weeks Prior to Diagnosis

Wilson vs. Liquid Environmental Solutions Corporation and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 11-109554

The claimant worked as a driver for the employer, and he testified that his routes required him to drive in Kansas, Nebraska, Missouri, and Arkansas.  However, the employer’s principal office was located in Kansas, and the claimant was required to begin and end each day by dropping off his truck there.  At his deposition, he did not indicate how much driving he did in each state, and he did not present any evidence regarding where a contract of employment was entered into.  In his Claim for Compensation, the claimant alleged that he developed bilateral carpal and cubital tunnel syndrome as a result of his repetitive job duties as a driver.

At a Hearing, the ALJ ultimately found this matter was not compensable because the claimant failed to establish Missouri jurisdiction.  The ALJ found that the claimant failed to present any evidence regarding contract formation or that his employment was principally localized in Missouri within the 13 weeks preceding the work injury.  The ALJ noted that the employer was located in Kansas, the claimant drove through Missouri but did not work from a Missouri location, and he received his job assignments at the Kansas office.  The ALJ found that the claimant bears the burden of proving his employment was principally located in Missouri, and he failed to meet that burden.

On Appeal, the Commission affirmed the ALJ’s decision and Award with a supplemental opinion, wherein it noted that some important factors to be considered in determining whether employment is localized in Missouri include:  Where the workday starts and ends; whether the employer has an office in the state claimed; whether the duties performed in a state are merely incidental to the position; where the employee receives orders, pay, and supervision; if the employee’s duties required travel, whether evidence establishes that most miles are within a certain state; and whether a base of operations is in the state.  The Commission found that the claimant failed to establish that any of those were true of Missouri in this claim.

ALJ Finds Employer/Insurer Liable for PTD Due to Permanent Work Restrictions   and Claimant’s Need to Lie Down During Day

Hickmon vs. Propak Logistics, Inc. and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 13-024814

On April 10, 2013, the claimant, a 39-year-old high school graduate, injured his right hip and low back.  Dr. Krempec performed a right hip arthroplasty with arthroscopic labral repair and open femoral osteochondroplasty on October 31, 2013, placed the claimant at MMI without restrictions on March 25, 2014, and assessed 12% PPD of the hip.  The claimant attempted to return to work with the insured, but he was unable to work a full day, and he did not return to work again after May 1, 2014.  He proceeded to treat on his own for back complaints, and Dr. Ciccarelli performed a lumbar fusion and recommended permanent restrictions of no lifting over 35 pounds or repetitive bending or lifting.  The claimant was subsequently terminated by the insured due to his permanent work restrictions.

The claimant had history of working physically demanding jobs after high school.  He stopped working for three years following a motor vehicle accident in June 2007 wherein he sustained injuries to his right shoulder and low back.  He subsequently returned to full time employment performing maintenance on semi-trailers, which required him to frequently lift over 35 pounds, bend, twist, and climb.  He left that position for a higher paying job with the insured.  He worked for the insured for 13 months full time in a position that required him to lift and turn pallets weighing up to 80 pounds throughout the day.  The claimant testified that he was able to successfully perform all of his job duties despite ongoing back and shoulder complaints.

The claimant was evaluated by Dr. Stuckmeyer at his attorney’s request, and he recommended permanent work restrictions and subsequently opined the claimant was PTD as a result of the last injury alone and recommended future medical treatment.  Mr. Cordray opined the claimant had no transferable work skills and had below-average intelligence, was limited to sedentary work only given Dr. Stuckmeyer’s restrictions, and was unemployable.  Ms. Doering evaluated the claimant at the employer’s request and opined the claimant was able to continue working in the open labor market.

At a Hearing, the claimant testified that he had trouble with prolonged standing and walking, lifting, and bending, and he has to lie down to relieve his symptoms.  He also testified that he had difficulty sleeping due to his complaints.  Despite video evidence showing the claimant adjusting straps under a refrigerator in the bed of a truck and playing with four toddlers while seated on the ground and wrestling with them, the ALJ found the claimant credible and the opinion of Mr. Cordray more persuasive than that of Ms. Doering.  The ALJ held that the claimant was PTD as a result of the last injury alone and ordered the employer/insurer to provide PTD, future medical, and TTD.  On Appeal, the Commission affirmed the ALJ’s decision and Award.

Claimant Entitled to TTD Because Not Terminated for Cause and TPD Because She Only Worked 40 Hours Per Week and Earned Less While on Light Duty

Lana vs. Old Castle, Inc., Injury No. 17-022682

The claimant sustained an injury to her right elbow while working for the employer.  Her job duties included lifting, manipulating, and sometimes breaking cinder blocks weighing up to 36 pounds.  The claimant initially underwent authorized treatment with Dr. Towle and was placed on light duty.  However, after reviewing a video of the claimant’s job duties, Dr. Towle opined that the elbow injury was not work related.  The claimant’s doctor, Dr. Rosenthal, concluded that the claimant’s condition was related to work and recommended surgery and work restrictions.  The claimant was subsequently terminated for violating the employer’s no-call/no-show policy for three consecutive workdays.

While on light duty, the claimant was limited to a 40-hour work week and was earning approximately $412.02 less per week than her pre-injury average weekly wage.  She demanded TPD for the periods that she worked light duty as well as past and ongoing TTD after she was terminated from employment on January 17, 2018.

At a Hearing, the ALJ found Dr. Rosenthal’s opinion more credible than that of Dr. Towle and ordered the employer to provide additional medical treatment.  The ALJ also noted that the employer’s policy actually stated that a claimant could not miss three consecutive workdays without notifying her supervisor at least one hour prior to the start of the shift.  The ALJ found the claimant’s testimony credible regarding the fact that she provided timely notice to her supervisor for two of the three days that she missed from work.  Therefore, the ALJ concluded that the claimant was not terminated for cause and was owed continuing TTD.  The ALJ also awarded TPD for the period the claimant was working light duty and was limited to working no more than 40 hours per week, because she was earning less per week than her pre-injury average weekly wage, because she was previously working overtime.  On Appeal, the Commission affirmed the ALJ’s decision and Award.

Court Rejected Employer/Insurer Appeal Because Brief Failed to Include Specific Page References to The Record and Failed to Address the Evidence on The Record That Supported Commission’s Award 

Customer Engineering Services vs. Odom, Case No. SD35638 (Mo. App. 2019)

FACTS:  The 56-year-old claimant was injured on June 21, 2012 while lifting a large photo printer with two other people.  He treated with Dr. Roeder, who diagnosed tendinopathy and a partial right distal biceps tendon tear and performed right elbow surgery.  The doctor subsequently diagnosed CRPS of the right upper extremity and referred the claimant for ganglion blocks.  The claimant also treated with Dr. Lennard, who placed him at MMI on August 26, 2013.  He proceeded to treat on his own and underwent pain management.  The claimant did also have pre-existing disabilities, including a left knee injury which required surgery in 2010.  He obtained an Associate’s Degree in Photo Production Technology and had a history of working as a field support technician for photo labs.

At a Hearing, the ALJ found the claimant was PTD as a result of the work injury alone and noted he had unpredictable chronic pain that required opioid medication that caused cognitive deficits, and he had permanent restrictions from Dr. Lennard and Dr. Roeder.  On appeal, the Commission affirmed the ALJ’s decision and Award.  The employer appealed the Commission’s decision and Award.  It argued there was not sufficient evidence on the record to support an Award of PTD or future medical. 

HOLDING:  The Court of Appeals noted that the employer’s brief did not include page references to the record on appeal, and it failed to address the favorable evidence on the record that supported an Award of PTD benefits and future medical, which stripped the employer’s argument of any analytical or persuasive value.  The Court affirmed the Commission’s decision and Award, although it did modify the amount of past medical owed by the employer/insurer.

After at least four decades of disagreement on lien reimbursement calculations in high third party settlements, the Appellate Division this week handed down a reporteddecision in Liberty Mutual Insurance o/b/o Sabert Corporation v. Jose R. Rodriguez, A-0112-17T4 (App. Div. April 2, 2019).  Betsy Ramos, Esq., co-chair of Capehart’s litigation department, successfully argued the cause for the workers’compensation carrier.

The facts of the case are simple.  Mr. Rodriguez was injured in 2012 arising out of his employment with Sabert Corporation.  Liberty Mutual, the workers’ compensation carrier for Sabert, paid $148,590.40 in workers’ compensation benefits including medical and temporary disability benefits.  Mr. Rodriguez sued the tortfeasor and settled his third party suit for $1,200,000.  The question was how to calculate Liberty Mutual’s lien:  was it two thirds or higher than that percentage?  The law firm for Rodriguez sent a check for two thirds minus $750 for costs.  Liberty Mutual rejected the offer and filed an order to show cause and verified complaint claiming that the percentage should be calculated based on the actual fee paid by the injured worker to his lawyer as a percentage of the overall settlement.

There is a standard court rule for legal fees in large civil settlements.  Rodriguez paid his third party lawyer based on the court rule at that time:  one third of the first $500,000; 30% of the next $500,000 and 25% of the next $500,000 for a grand total of $366,666.  The current court rule applies to stages of $750,000 today.  Rodriguez actually paid 30.56% of the total settlement of $1,200,000 in counsel fees.  Liberty Mutual therefore argued that its lien should not be 66.67% but rather 69.44% (100 minus 30.56 = 69.44).  The trial court agreed with Liberty Mutual, and Rodriguez appealed to the Appellate Division, which affirmed the trial court.

Rodriguez argued that Liberty Mutual should be limited to two thirds because he paid only one third of the first $500,000 to his lawyer, and Liberty’s lien did not exceed $500,000.  It totaled $148,590.40.  The Appellate Division reviewed conflicting decisions on this issue, one Supreme Court case going back to 1955 (favoring Liberty’s position) and one reported Appellate Division decision from 1974 (favoring Rodriguez’s position). 

In the end, the Court ruled that the 1955 Supreme Court decision in Caputo v. Best Foods, Inc., 17 N.J. 259 (1955) was binding on the Court in spite of subsequent Appellate Division decisions that took issue with Caputo.  The Court ruled in favor of an approach which focuses on how much the injured worker paid his or her lawyer.  One takes that figure as a percentage of the total settlement.  So Liberty Mutual’s lien was in fact 69.44% of the $148,590.44 or $103,181.20 because that is the composite percentage of how much Rodriguez paid his lawyer.  It did not matter that Rodriguez paid one third of the first $500,000.  You need to work through all the staged payments that Rodriguez paid, the first at one third, the second at 30% and the third at 25%.  This is a significant victory for employers, third party administrators, and carriers.  There are many million dollar settlements in third party cases stemming from workers’ compensation injuries.  We now know how to calculate the lien. The confusion between competing published cases has been resolved.  The ruling means that respondents will recover greater than two thirds when the third party settlements are significant such as those in the seven figure range.  As practitioners know, it is not always accurate to say that respondent’s lien is two thirds.  It is never less than two thirds, but it can be more than two thirds, as this case illustrates.

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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. 

A recent study by the Division shows that nearly one-third of Texas small businesses opt out of subscribing to workers’ compensation insurance. According to the Division's investigation, 28% of small business owners (those with fewer than 50 employees) opted not to subscribe. That number increased to 36% for small businesses with one to four employees. However, of those who opt out, 30% report offering some alternative form of workers’ compensation coverage.

Small business owners cited having “too few employees” and “too few on-the-job injuries” as reasons for opting out of coverage. Nineteen percent said they opted out because premiums were too high. The largest industries with non-subscribers were healthcare (38% opt out), wholesale (33% opt out), and arts and entertainment (32% opt out). 

Texas is the only state where businesses have the option to subscribe to the state workers’ compensation system. The majority of employers choose to participate. The number of employees covered by the state’s workers’ compensation system has been around 80% since 2004. 

The Division is offering free webinars for health care providers and staff explaining the ins and outs of medical care for injured workers. The webinars will cover topics like utilization review, verification of coverage, medical bill processing, bill disputes, MMI and IR, and healthcare networks. The webinars begin at noon and are an hour long. Registration is available on the Division’s website. For more information on upcoming webinars and a list of topics, please visit:https://www.tdi.texas.gov/alert/event/dwchealthcare.html.   

-  Copyright 2019, Stone Loughlin & Swanson, LLP.