State News : South Carolina

Brooks v. Benore Logistics System, Inc., 442 S.C. 462, 900 S.E.2d 436 (2024).

In Brooks v. Benore Logistics System, Inc., the South Carolina Supreme Court reversed a 2022 ruling of the Court of Appeals and re-affirmed an already long-standing test for repetitive trauma claims. 442 S.C. 462, 900 S.E.2d 436 (2024). In Brooks, Respondent Claimant alleged a work-related repetitive trauma injury to his back. Appellant Employer denied Claimant’s claim. The Single Commissioner found the Claimant suffered a compensable repetitive trauma claim, but the Appellate Panel reversed. In reversing, the Appellate Panel held that in order to prove a compensable repetitive trauma injury under Section 42-1-172, a claimant must satisfy a two-prong test: (1) That the claimant’s job was “repetitive” in nature as defined by Section 42-1-160(F); and (2) That medical evidence supports a causal link between the repetitive work and the alleged injury.  The Court of Appeals reversed the Appellant Panel’s decision, holding that the Workers’ Compensation Commission did not have the authority to determine whether a claimant’s job was repetitive in nature. Specifically, the Court of Appeals explained that the two-part test announced by the Appellate Panel was unfaithful to the plain language of Section 42-1-172 in that it set an “extra hurdle” for claimants.

In reversing the Court of Appeals decision, the Supreme Court held that the Court of Appeals “erred in rejecting the appellate panel’s conclusion that Section 42-1-172 requires a two-prong analysis, specifically, (1) whether a claimant’s job activities are repetitive, as that term is defined in Section 42-1-160(F); and (2) whether the claimant establishes by medical evidence that there is a causal link between the repetitive work and the alleged injury.”  The Supreme Court explained that “it is self-evident that, to receive compensation for a repetitive trauma injury, a claimant must first prove his or her job is in fact repetitive.”  The Supreme Court acknowledged that “repetitive” is not explicitly defined in Section 42-1-172 but found direction from Section 42-1-160(F) which provides that any injury that occurs as a result of “a series of evidence in employment, of a similar or like nature, occurring regularly, continuously, or a frequent intervals in the course of such employer, over extended periods of time” is not compensable except as provided for in Section 42-1-172.  Because the General Assembly removed those types of injuries from the general “injury by accident” statute (Section 42-1-160), the Supreme Court utilized this as a definition of “repetitive” in applying the two-party analysis. Accordingly, while affirming in result, the Supreme Court reversed the Court of Appeals and re-established that compensability of an alleged repetitive trauma injury must be proven pursuant to the two-part test as outlined above.

As an additional aside, the Supreme Court affirmed the Court of Appeals’ finding that ergonomics studies may but used in meeting the first prong of the aforementioned test, but are inadmissible, unless conducted by a medical professional, as evidence for or against the second prong (causation).

Samual Paulino v. Diversified Coatings, Inc., 2024 S.C. LEXIS 100 (2024).

            In Samual Paulino v. Diversified Coatings, Inc., Samuel Paulino sustained an injury to his back while working as a custodian at Diversified Coatings, Inc. in February 2015. 2024 S.C. LEXIS 100 (2024). Despite undergoing surgery and extensive treatment, including physical therapy and pain management, Paulino continued to experience significant pain and limited mobility. His treating physicians assigned impairment ratings of 12% to his lumbar spine and 13% to his whole person, and his functional capacity evaluation indicated he could perform medium work duties with substantial limitations. At a hearing before the single commissioner, Paulino testified about his ongoing pain and inability to perform his job duties, which led the commissioner to find that he was permanently and totally disabled due to a greater than fifty percent loss of use to his spine.

The court of appeals reversed the workers' compensation commission's award, stating there was no medical evidence to support the finding of a fifty percent or greater loss of use. However, the Supreme Court of South Carolina reversed the court of appeals' decision, reinstating the commission's award. The Supreme Court found that the commission's decision was supported by substantial evidence, including medical records, functional capacity evaluation notes, and Paulino's testimony. The court emphasized that the commission's findings did not solely rely on medical impairment ratings but considered the entire record, demonstrating a comprehensive evaluation of Paulino's condition and its impact on his ability to work.

            Importantly, the Supreme Court disagreed with the employer’s argument that doctors’ medical impairment ratings are “virtually outcome determinative,” and that, in the alternative, even if ratings do not control, they are “clearly the paramount factor for the Commission’s consideration.”  In so holding, the Court reiterated its view that substantial evidence can support findings of permanent and total disability even when the claimant’s impairment rating alone would not. See, e.g., Linen, 286 S.C. at 68-70, 332 S.E.2d at 211-212 (affirming finding of fifty percent loss of use of the back based on other evidence in the record despite doctors assigning impairment ratings of 15% and 20%-30%); Lyles v. Quantum Chem. Co. (Emery), 315 S.C. 440, 445, 434 S.E.2d 292, 295 (Ct. App. 1993) (affirming finding of a fifty-eight percent disability to the back based on testimony from the claimant); Sanders v. MeadWestvaco Corp., 371 S.C. 284, 291-93, 638 S.E.2d 66, 70-71 (Ct. App. 2006) (affirming finding of forty percent disability to the back based on claimant's testimony despite a doctor assigning an impairment ratings of eighteen percent to the lumbar spine); c.f. Tiller v.  Nat'l Health Care Ctr. of Sumter, 334 S.C. 333, 340, 513 S.E.2d 843, 846 (1999) ("[M]edical testimony should not be held conclusive irrespective of other evidence."   (Quoting Ballenger v. S. Worsted Corp., 209 S.C. 463, 467, 40 S.E.2d 681, 682-83 (1946))).

Thomas Contreras v. St. John’s Fire District Commission, 442 S.C. 596, 900 S.E.2d 463 (Ct. App. 2024).

              In Thomas Contreras v. St. John’s Fire District Commission, Thomas Contreras, a firefighter, sought workers' compensation for injuries sustained to his right shoulder, arm, and clavicle. 442 S.C. 596, 900 S.E.2d 463 (Ct. App. 2024). The South Carolina Workers' Compensation Commission initially awarded permanent partial disability (PPD) compensation solely for his right shoulder, based on medical evidence and evaluations. Contreras contested this decision, arguing that his injuries extended to his arm and clavicle, which would entitle him to broader disability benefits under South Carolina law. The Appellate Panel, tasked by the court to provide specific findings on each affected body part, initially upheld the single commissioner’s decision but faced subsequent appeals challenging the weight given to medical forms and the extent of Contreras's injuries.

Contreras contended that his right arm and clavicle were also impaired, presenting medical evidence and expert opinions supporting additional disabilities beyond the scheduled injury to his shoulder. Despite his arguments, the Appellate Panel affirmed its original decision, emphasizing that the medical records and evaluations did not sufficiently establish impairments to the arm and clavicle beyond the shoulder. The court upheld the Appellate Panel’s decision, citing substantial evidence supporting the limitation of compensation to the scheduled injury of the right shoulder under South Carolina's workers' compensation laws. This case underscores the importance of detailed medical evidence and the Appellate Panel's authority in determining the extent of disabilities in workers' compensation cases.

Ana Galvan v. Griffin Stafford North Charleston, 2024 S.C. App. Unpub. LEXIS 15

Claimant presented a supplemental report from an unauthorized doctor after the statutory period allowed for the submission of APAs. The Hearing Commissioner allowed the report to be introduced after deciding to hold the record open. Defendants argued that such submission was contrary to the statutory requirements for APA submissions. The Court of Appeals held that Regulation 67-612(E) grants the Commission discretion to hold the record open, and that “it is an abuse of discretion for a commissioner to reject evidence when its admission does not cause prejudice.”  See Morgan v. JPS Automotives, 321 S.C. 201, 203-04, 467 S.E.2d 457, 459 (Ct. App. 1996). The Court of Appeals held no such prejudice existed as the Hearing Commissioner offered Defendants the opportunity to depose the doctor and Defendants declined.

Michael Crowley v. Darlington County, 2024 S.C. App. Unpub. LEXIS 223

            Deputy Michael Crowley sustained two admitted injuries to his right knee and back while employed with Darlington County in 2017 and 2018. In Jan. 2021, Defendants filed a Form 21, which included a report from Dr. James Bethae date December 17, 2020. Claimant’s Counsel objected to the submission of this report pursuant to S.C. Code Ann. Section 42-15-95(c) because Defendants had failed to notify Claimant’s Counsel of their October 27, 2020, pre-IME letter to Dr. Bethae and accompanying medical records. Defendants argued that Section 42-15-95 did not apply in this instance as no doctor-patient relationship had been established between Dr. Bethae and the claimant at the time of the October 27, 2020, IME letter given Dr. Bethae had not examined or treated the claimant. The Hearing Commissioner admitted the report and the claimant appealed.

Section 42-15-95 provides the following:

(B) A health care provider who provides examination or treatment for any injury, disease, or condition for which compensation is sought . . . may discuss or communicate an employee's medical history, diagnosis, causation, course of treatment, prognosis, work restrictions, and impairments with the insurance carrier, employer, their respective attorneys or certified rehabilitation professionals, or the commission without the employee's consent. The employee must be:

(1) notified by the employer, carrier, or its representative requesting the discussion or communication with the health care provider in a timely fashion, in writing or orally, of the discussion or communication and may attend and participate. This notification must occur prior to the actual discussion or communication if the health care provider knows the discussion or communication will occur in the near future;

(2) advised by the employer, carrier, or its representative requesting the discussion or communication with the health care provider of the nature of the discussion or communication prior to the discussion or communication; and

(3) provided with a copy of the written questions at the same time the questions are                                                                                                   submitted to the health care provider. The employee also must be provided with a copy of the response by the health care provider.

Section 42-15-95(C) provides that “[a]ny discussions, communications, medical reports, or opinions obtained in violation of this section must be excluded from any proceedings under the provisions of this title.”

            The Court ultimately found that Defendants had violated Section 42-15-95 because “the purpose of the statute is for providers to exchange information with employers rather than an employer to provide a claimant’s medical records to a provider not known to the claimant, as occurred here.”  However, the Court also determined that the admission of Dr. Bethae’s report was harmless error.

The issue here is the interpretation of the words “not known to the claimant.”  If the Court is simply referring to situations, as was the case here, where a letter and medical records are sent to an IME provider pending an evaluation and without a claimant’s knowledge, that is a simple fix: include the claimant on all IME provider letters. If, however, the Court is referring to the IME providers as a whole as being unknown to the claimant because they have provided no treatment for the claimant, then that is a much more complex issue. Under this interpretation, Claimant Attorney’s may seek to argue that since all IME providers (in general) have not previously provided medical treatment and are therefore unknown to the claimant, the provision of any letters and/or medical records to these providers prior to an evaluation violates Section 42-15-95. This interpretation would greatly limit Defendants’ ability to outline the scope of an evaluation and to provide valuable background information with regard to causation, pre-existing conditions, and the like.

2022 came and went in the blink of an eye in South Carolina for employers, carriers, defense counsel, and the myriad of individuals involved in the workers’ compensation system.  It left behind, however two interesting points of reflection. 

First, it wasn’t a good year for the Workers’ Compensation Defense Bar when it came to appellate decisions.  The South Carolina Court of Appeals decided and published a total of five appeals from the Workers’ Compensation Full Commission, down from eight decisions in 2021.  “Are there any other differences?” you may ask.  Unfortunately, yes.  In 2021, Defendants prevailed in five of the eight opinions, with one arguable tie (affirm in part, reverse in part, and remand).  In 2022, however, workers’ compensation defendants struck out on all five appeals.   

For example, in Brooks v. Benore Logistics Systems & Great American Alliance Insurance Company, decided in January 2022, the Court of Appeals upended a long-standing test for repetitive trauma claims in South Carolina, seemingly reducing the burden of proof for the claimant in ceasing to require proof that a claimant’s specific job duties were, in fact, repetitive in nature.  In Padgett v. Cast and Crew Entertainment Services, Inc. & American Zurich Insurance Company, decided in October 2022, the Court of Appeals continued the trend and held that even when a claimant has reached the statutory 500-week cap for benefits under a single claim, TTD benefits must continue and may not be terminated until such time that the parties come to a separate, mutual agreement or the claimant is placed at MMI and permanent disability can be assessed. 

Second, the beginning of 2023 brought with it some new changes to the South Carolina Workers’ Compensation Net Present Value (NPV) Tables.  Pursuant to Reg. 67-1605(E)(5), the NPV Tables for weeks 101 through 500 are calculated based upon the yield-to-maturity rate of the Five-Year U.S. Treasury Note reported by the Federal Reserve.  As of January 3, 2023, the Five-Year YTM rate was 3.94%, up significantly from 1.54% in January 2021.  Therefore, the NPV Tables for 2023 for weeks 101 through 500 will now be calculated using a 3.94% discount rate.  These NPV tables are used to calculate the present value of any lump sum payment for an award greater than 100 weeks in benefits.  For example, defendants may choose to commute a 40% disability award to the back (120 weeks), or an award for permanent and total disability, or an award for death benefits; the list goes on as long as the award is greater than 100 weeks of compensation and the claimant hasn’t accrued (by receiving TTD benefits) enough weeks that would put the award below 101 weeks.  

So how does this affect South Carolina workers’ compensation claims moving forward?  Well, the higher discount rate means defendants are guaranteed to save anywhere from 1.88% to 8.53% in commuted lump sum payments to claimants.  For example, let’s say we have a claimant with a compensation rate of $500.00 who receives an award of 40% disability to his back, or 120 weeks of compensation with no prior TTD checks.  In 2022, that claimant would receive a commuted lump sum of $59,102.70, whereas in 2023, he will receive $57,788.60.  If that same claimant was determined permanently and totally disabled and entitled to 500 weeks (we’ll assume for ease that he didn’t receive any TTD checks), in 2022 he would have received $227,803.85, whereas in 2023 he will receive $208,375.65, a difference of almost $20,000.00. 

After a year of hard appellate blows and shifting burdens, the new NPV Tables serve as a welcomed silver lining. 

As of late in South Carolina, it has become more and more common for the Claimant’s Bar to use the largely uncontested admission of medical questionnaires from authorized/unauthorized physicians as evidence in workers’ compensation matters to meet their burden of proof.  These statements typically are related to causation, permanent restrictions, physical limitations, future medical treatment, and more.  Generally, these questionnaires are not the written statements by the completing physician; rather, they are drafted by claimant’s counsel, using phrasing not likely to be used by medical professionals, and bolstering the statements made therein by qualifying them to the appropriate medical standard (“to a reasonable degree of medical certainty”) which is why they are problematic. The effect of these questionnaires is two-fold: (1) a detailed explanation of the claimant’s medical condition is boiled down to a check mark in a “yes” or “no” box, and (2) the claimant’s burden of proof is seemingly shifted to the defendants who must then go and depose said medical professional, at the cost of the employer/insurance provider, in order to cross-examine them on these statements that are most often not their own.   Under the “hearsay” definition (outlined below), a medical questionnaire is clearly hearsay, as it contains out-of-court statements (made by claimant’s counsel and adopted by the medical professional) and is offered into evidence to prove the truth of the matter asserted, i.e., to prove the statements made therein.  The rules regarding the submission of evidence in SC Workers Compensation are relaxed under the APA Guidelines, but these questionnaires seek to present a legal standard, fashioned as though the physician provided it in support of their unsolicited medical record, which is why they should be subjected to a different level of scrutiny and not omitted from the hearsay exception.

S.C. Code Ann. § 1-23-330(1) makes clear that the South Carolina Rules of Evidence do not apply in proceedings before the Workers’ Compensation Commission.  Hamilton v. Bob Bennett Ford, 339 S.C. 68, 70, 528 S.E.2d 667, 668 (2000) (citing Ham v. Mullins Lumber Co., 193 S.C. 66, 7 S.E.2d 712 (1940)).  As such, “great liberality is exercised in permitting the introduction of evidence in proceedings under the Workers’ Compensation Act.”  Id.  Note, however, that this liberality is not a wide-open door, permitting the admission of any and all evidence without thought; rather, South Carolina courts have opined that certain evidence must still meet judicial standards of admissibility.  Specifically, while the hearsay rules laid out in SCROE 801 – 806 are not applicable, hearsay evidence sought to be introduced in a workers’ compensation proceeding must still “be corroborated by facts, circumstances, or other evidence.”  Ham v. Mullins Lumber Co., 193 S.C. 66, 7 S.E.2d 712 (1940); See also Horton v. Pyramid Masonry Contractors, Inc., 2008 WL 9841237 (S.C. Ct. App. 2008); McCallum v. Beaufort County School Dist. Ex rel. South Carolina Boards Ins. Trust, 2005 WL 7083462 (S.C. Ct. App. 2005).  “Hearsay” is defined by South Carolina Rule of Evidence 801 as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”

Recently, the Defense Bar began contesting these medical questionnaires and pushing for an outright ban on the same.  To date, the Workers’ Compensation Commission has been largely unwilling to make affirmative findings as to their admissibility or inadmissibility.  But see Eric Counsel v. Transportation Servs. LLC, & United Wisconsin Ins. Co. 2020 WL 8872085 (S.C. Work. Comp. App. Panel. Sept. 16, 2020) (Commissioners Wilkerson, Barden, and Beck holding a medical questionnaire admissible as an exception to the rule against hearsay because the medical conclusions drawn therein were also noted in the physician’s prior medical records and were corroborated by the medical records of another treating physician).  In response to this contentious debate, the South Carolina Senate has proposed bill S. 366 which seeks to amend S.C. Code 42-17-40(A) so as to provide that medical records and opinions of medical providers (i.e., medical questionnaires) are deemed admissible without regard to the rules of evidence.  The effect of this bill would be to stifle any and all arguments from the defense bar and allow for the admissibility of medical questionnaires without objection.  This bill was introduced for its first reading on January 12, 2021, and was found favorable by the SC Senate Judiciary Committee on March 16, 2022.  The bill must now be read for the second and third times, not to occur on the same day.  At the third reading, the bill may be debated, amended, committed, recommended, tabled, etc.  After this third reading occurs, the Senate will put the bill to a vote wherein only a majority is needed for passage.  If this occurs, it will then be sent to the South Carolina General Assembly where it must be found favorable by the appropriate committee and read on three separate occasions, the debate of which will occur during the second reading.  If passed in the SC General Assembly, the Governor will have five days to veto it, after which time it will become law.  An override of the Governor’s veto would require 2/3 vote of the SC General Assembly.  If the General Assembly does not accept this bill as written, they may amend the same and send it back to the Senate for approval.  If the amendments are approved, the bill passes.  In the event of a disagreement, a conference committee of members from both houses will convene to resolve the issues.  If the conference fails to agree, the bill will likely fail to pass. 

            While the effect of this legislation will not bring about a drastic shift in defense practice in workers’ compensation matters, as the WCC has thus far chosen not to reject these questionnaires, the fact that the WCC will now accept them without question is rather concerning.  This unobjectionable acceptance ultimately takes us farther away from an even playing field in workers’ compensation claims where claimant’s attorney would be required to incur the same expenses and follow the same rules as defense attorney, and further allows claimants to shift their own statutory burden of proof on to the defense which is not proper under the Act.

Further updates on this issue will undoubtedly be forthcoming in the next few months. 

                                                                                                Authored by,

                                                                                                Brandon Rattray, Esq.

                                                                                                Workers’ Compensation Associate

                                                                                                Robinson Gray Stepp & Laffittee, LLC

The “statutory employee doctrine was included in the initial 1936 draft of the Workers’ Compensation Act and is now found in S.C. Code Ann. § 42-1-400 and -410.  For decades, the appellate Courts have relied upon the following three factor test to determine a claimant’s statutory employment status:

1.     Is the worker’s activity an important part of the owner’s business;

2.     Is the worker’s activity a necessary, essential or integral part of the owner’s business; and

3.     Has the identical activity been performed by the employees of the principal owner.

Glass v. Dow Chemical Co., 325 S.C. 198, 482 S.E.2d 49 (1997).  However, in an August 2021 decision by the South Carolina Supreme Court in Keene v. CNA Holdings, LLC, the Supreme Court seemingly abandoned these three tests, and replaced them with a much more employer-centric approach. Keene v. CNA Holdings, LLC, 2021 WL 3521085 (SC 2021).

In Keene, the estate of a deceased worker brought a survival and wrongful death action against the manufacturer (CNA Holdings) that hired the claimant’s employer (Daniel Construction Co.), a sophisticated international construction company, based on the claimant’s asbestos exposure while maintaining and repairing pumps, valves, and other equipment in the piping network of a CNA plant.  The Circuit Court and Court of Appeals found CNA was not a statutory employer of deceased claimant and therefore found the claimant’s estate was not limited to the exclusive remedy of the Workers’ Compensation Act.  In affirming the lower courts’ decisions, the South Caroline Supreme Court acknowledged a shift from the previous three tests of “importance,” “necessity,” and “identical activity,” and recognized the importance of “corporate decision making” in allowing “owners” to contract out work when such outsourcing is economically beneficial, instead of holding the owner accountable regardless of the purpose. 

In redefining what is considered part of an owner’s trade, business, or occupation for statutory employment issues, the Court in Keene stated,

[W]hat is or is not part of the owner’s business is a question of business judgment, not law.  If a business manager reasonably believes her workforce is not equipped to handle a certain job, or the financial or other business interests of her company are served by outsourcing the work, and if the decision to do so is not driven by a desire to avoid the cost of insuring workers, then the business manager has legitimately defined the scope of her company’s business to not include that particular work.

Under this new rule, the Court found the deceased claimant was not a statutory employee of CNA Holdings, LLC, because: (1) only employees with the claimant’s company performed maintenance and repairs on the equipment in the plant; (2) none of the CNA Holdings employees performed maintenance and repair work; (3) CNA Holdings contracted with claimant’s company because it was a “qualified, capable contractor that can do the expert work that CNA needed done;” and (4) there was no evidence presented that proved that CNA’s corporate purpose included equipment maintenance.”  Id. at 7.

The Court further concluded that this decision did not run afoul of the original purpose of the statutory employee doctrine because the deceased claimant presumably received Workers’ Compensation benefits through his employer (Daniel Construction) since the contract between CNA Holdings and Daniel Construction required Daniel to provided workers’ compensation benefits to its workers.  Id.  The Court found that “it is not the role of the court to second-guess a legitimate business decision whose effect – far from the improper purposes the statutory employee doctrine was designed to prevent – was actually to guarantee that the workers affected by the decision would be insured against work-related injuries.  Id.

This Opinion of the Court, for which a Petition for Reconsideration is pending, could create a more subjective “business judgment” analysis as to the intent of the business owner as opposed to the traditional objective analysis of the actual activities of the business.  Any shift in how these cases are adjudicated will have far-reaching consequences particularly as it pertains to the protections afforded business by the exclusive remedy doctrine.  Further updates on this issue will undoubtedly be forthcoming in the next few months.