On July 21, 2017, the Alabama Court of Civil Appeals released its opinion in Felisha Bailey v. Jacksonville Health and Rehabilitation Center.  In Bailey, the employee was a certified nursing assistant who sued her employer and the third party administrator (TPA) handling her workers’ compensation claim.  Count One of her complaint was against her employer for workers’ compensation benefits related to her claim of contracting scabies and the related psychological issues.  Count Two was against the TPA for outrageous conduct.  Count Two was subsequently dismissed upon motion of the TPA.

Rather than proceed to trial on the workers’ compensation issues, the employer elected to first file a motion for summary judgment.  In support of the motion, the employer offered evidence which demonstrated that the employee never contracted scabies.  Rather, the employee more likely suffered from delusional parasitosis whish is a disorder that causes a person to believe that they are infested by parasites.  The evidence in support of this theory was compelling and the judge granted the motion for summary judgment.  The employee timely filed her appeal.

On appeal, the employee pointed out that the trial judge improperly weighed the evidence in granting the employer’s motion for summary judgment.  Since there was some evidence that could arguably support the employee’s theory, the Court of Civil Appeals agreed with the employee that granting summary judgment was improper.  As such, the judgment was reversed and remanded for further proceedings.

My Two Cents:

Unless there is evidence introduced at trial that is not referenced in the Court’s opinion, the time and expense associated with appealing the trial court’s decision is probably all for naught.

------------------------------------

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.

Michael Savio was injured on a job site on June 1, 2006.  He stated that he worked for Matthew Giambri for four weeks on two job sites, pouring concrete on one site, and doing plumbing work on the other site.  Giambri paid him $150 per day to pour concrete; otherwise, he paid him $100 to $125 per day.

On the day of the accident, Giambri picked up Savio from his home and drove him to a job site.  His job that day was to tear off siding on a home.  Savio testified that Giambri pointed out what he had to do and then left.  He said he had his own tools but there was no evidence that he used them on the job site.  He brought no materials with him as everything he needed was there.

After Savio removed the siding, he descended from a ladder which broke, causing Savio to fall two-and-a-half stories and injure his spine.  He treated for four years for the injury and was never able to resume construction work.  Petitioner filed a petition asserting that he was employed by Giambri, and his employer asserted that he was an independent contractor or a casual employee and therefore not protected by workers’ compensation laws.

The Judge of Compensation and the Appellate Division found that petitioner was an employee.  The opinion of the Appellate Division is interesting because the court reviewed 12 factors outlined in the case of Estate of Kotsovska, ex rel. Kotsovska v. Liebman, 221 N.J. 568 (2015).

§  The first factor is the employer’s right to control the means and manner of work performance. The court found that there was evidence that Giambri provided instruction in what to do and how to remove the siding, as well as materials to do the job. The court felt it insignificant that Giambri left the work site while the siding was removed. The court also said that the “control” factor carries less weight than other factors;

§  The court felt that the second and third factors had minimal significance in this case. They involve supervision necessary over the job and skills to perform the job.  The court agreed with the Judge of Compensation that Savio had the skills and required little direction;

§  The fourth factor pertains to who furnishes equipment, and this was clearly in Savio’s favor;

§  The fifth factor involves the length of time a worker performs duties for the alleged employer. In this case the court felt that four weeks was sufficient.

§  The sixth factor relates to the method used to pay the alleged employee. Here Savio was paid by cash or personal check, and Gambri gave him a W-2 form at the end of the year.  This also favored employment;

§  The seventh factor focuses on the manner in which the work relationship terminated. In this case the petitioner could not return to work because of his injury.

§  The eighth, tenth, and eleventh factors pertain to benefits: annual leave, retirement benefits, and payment of Social Security taxes.  There was no evidence in this case regarding these factors.

§  The ninth factor focuses on whether the alleged employee’s work is an integral part of the employer’s business. “Here, the judge found Giambri was a contractor who employed laborers to perform services on his behalf and, thus, the work Savio performed was an integral part of Giambri’s business.”

§  Lastly, the twelfth factor examines the intentions of the parties. The Appellate Division believed that there was a relationship consistent with an employer and employee, even if there was no documentation expressing intention.

The Appellate Division felt that the vast majority of these factors favored employment status and affirmed the decision of the Judge of Compensation.  The case is very helpful in resolving disputes of this nature by providing a framework to analyze similar situations.   It can be found at Savio v. Giambri, A-0701-15T1 (App. Div. July 12, 2017).

-----------------

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.

The Minnesota Supreme Court reversed a decision by the WCCA, and held that the WCCA erred when it found that an expert opinion lacked adequate foundation.

In this case, Debra Mattick (“Employee”) sustained a non-work-related injury to her right ankle in 2000. She underwent two surgeries, and eventually was able to engage in recreational activities including sand volleyball and biking. She was diagnosed with post-traumatic arthritis, and had periodic pain. She returned to work as a cake decorator at Hy-Vee in 2001, working 40-45 hours per week. In 2004, the Employee tripped over a pallet while working at Hy-Vee and twisted her right ankle. She filed a workers’ compensation claim seeking reimbursement for an ankle-fusion surgery. At the Hearing, the compensation judge denied the Employee’s claim for surgery and found that the injury was temporary and had fully resolved. The judge relied on the expert opinion of Dr. Fey and concluded that neither the Employee’s medical records nor the opinions of her treating physicians supported her claim.

The case was appealed to the WCCA, which reversed the compensation judge’s decision and concluded that Dr. Fey’s report lacked adequate factual foundation. The WCCA found that Dr. Fey’s report was suspect, including his discussion of the Employee’s arthritis condition and ankle sprain, and well as his failure to note a 10-year gap in the Employee’s symptoms. Due to this, they found the report to be lacking in adequate foundation.

The Minnesota Supreme Court reversed the WCCA’s decision and reinstated the findings of the compensation judge. The Supreme Court noted that an expert opinion lacks foundation when (1) the opinion does not include the facts and/or data upon which the expert relied in forming the opinion, (2) it does not explain the basis for the opinion, or (3) the facts assumed by the expert in rendering an opinion are not supported by the evidence. Hudson v. Trillium Staffing, 2017 WL 2458132 (Minn. June 7, 2017). The Supreme Court, however, analyzed Dr. Fey’s report based on these factors and found that the report clearly recounted and analyzed the specifics of the Employee’s injuries before opining on the potential aggravation of her arthritis in her ankle, and it was adequately supported by factual foundation. A few statements in the report taken out of context is not enough to discredit the entire report. In conclusion, the Supreme Court found that the WCCA erred, and that the compensation judge properly relied on Dr. Fey’s report.

As the takeaway, the Minnesota Supreme Court reiterated the WCCA’s appellate standard of review under Hengemuhle for the past three decades: the WCCA exceeds its scope of review when it rejects a Compensation Judge’s findings that are supported by substantial evidence and substitutes its own findings.

The case Mattick v. Hy-Vee Foods Stores, A16-1802 and can be found here: http://www.mncourts.gov/mncourtsgov/media/Appellate/Supreme%20Court/Standard%20Opinions/OPA161802-071217.pdf

The issue of independent contractor versus employer has been litigated in South Dakota. There is a presumption that the worker was an employee and it is the employer’s burden to establish the worker is an independent contractor. The Department of Labor and the South Dakota Supreme Court have provided a set of factors to consider when determining whether a worker is an independent contractor or an employee.

The following factors have been used by the Department of Labor as considerations when determining whether a worker is an independent contractor or employee:

1. The extent of control which, by the agreement, the master may exercise over the details of the work;

1. One must look at whether the employer has the ability to hire, fire, and lay off the worker. It is also important how much control the master has over the workers’ functions.

2. Whether the one employee is engaged in a distinct occupation or business.

1. Here it is important to see whether the worker operated a separate business or under a separate trade name. It is also important whether the worker worked solely for this master, on a full time basis.

3. The kind of occupation with reference to, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.

4. The skill required for that particular occupation.

5. Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

1. Here, “when the employer furnishes valuable equipment, the relationship is almost invariably that of employment.” SeeLarson on Worker’s Compensation §44.43(a).

6. The length of time for which the person is employed.

7. The method of payment, whether by the job or by the hour.

8. Whether the work is part of the regular business of the employer.

9. Whether the parties believe they are creating the relationship of master and servant.

The South Dakota Supreme Court has essentially adopted these factors although it has grouped certain factors into a two-part test. InEgemo v. Flores, 470 NW2d 817 (SD 1991) the employer argued the servant was an independent contractor. The court noted there was an important distinction as an independent contractor is not covered by workers’ compensation. The court stated there is a two factor test: (1) whether the individual has been and will continue to be free from control or direction over the performance of the services, both under contract or service and fact, and (2) whether the individual is customarily engaged in an independently established trade, occupation, profession or business.

In evaluating the “right of control test” the important considerations include direct evidence of the right of control, the method of payment, furnishing major items of equipment, and the right to terminate the employment relationship at will and without liability. In Egemo, the court noted the employer did not exercise control or supervision over the method or manner in which the servant completed his task. Furthermore, the master did not direct the hours of work, breaks, or even the days off. The court also noted the servant did not withhold any amounts for income tax, social security, or unemployment insurance. The employer also filed a Form 1099 as a non-employee compensation form. The court noted the servant was required to supply all of his own tools, and his own maintenance and transportation to the work sites. Furthermore, the employment relationship could not be terminated without liability.

The significant considerations in the test of “independently established trade” are that:

The requirement that the employee’s occupation be independently established and that he be customarily engaged and it calls for an enterprise created and existing separate and apart from the relationship with the particular employer; an enterprise that will survive the determination of that relationship. The individual must have a proprietary interest in the enterprise to the extent that he can operate without hindrance from any other individual.

However, it is not skill alone which determines whether an individual is established in a trade or business, but whether that individual by reason of such skill engages himself in an economic enterprise such that he bears the risk of his own unemployment. Whether or not he is unemployed is solely a function of market forces and a demand for skills, not the response of his master to similar economic realities.

The South Dakota legislature has also addressed this issue and stated the difference between an employer and an independent contractor in SDCL 61-1-11. That statute states “service performed by an individual for wages is employment subject to this title unless and until it is shown to the satisfaction of the Department of Labor that: (1) the individual has and will continue to be free from control or direction over the performance of the service, both under his contract of service and in fact; and (2) the individual is customarily engaged in an independently established trade, occupation, profession, or business. The South Dakota legislature defined employee in SDCL 62-1-3 for the purposes of worker’s compensation. The definition is roughly the same as that set forth above.

Roy Hendrickson worked for thirty years at UPS.  His first 19 years were as a package car driver making over 100 stops per day to deliver or pick up packages.  He injured his back in 1992 but did not file a workers’ compensation claim.   In 2002 he injured his back lifting a heavy package, losing two months of work time.  He was diagnosed with sprains, degenerative disc disease and stenosis.  He received an award of 15% permanent partial disability.   He reopened that claim in 2004, settling for 17.5% credit 15% for the prior award.

In 2006 Hendrickson began working as a feeder driver for UPS, driving tractor-trailers to New York City, the Meadowlands, Secaucus, Cranbury and locations in New England.  He drove trucks without air ride suspensions, testifying that he felt shocks and vibrations over pot-hole ridden roads.  He said this activity caused additional pain in his low back, requiring acupuncture treatment.

In 2008 Hendrickson also began working as a shifter driver, which required backing the truck into a trailer and “hitting the pin” to connect the two.   He testified that every time he made the connection, around 75 times per day, there was an impact such that he felt as though he were being punched in the back.

In 2012 Hendrickson was at a mall and collapsed due to pain and numbness radiating down his legs from his low back.  His chiropractor sent him for an MRI in August 2013, which showed herniated discs at L3-4 and L4-5 along with severe stenosis.  His chiropractor refused to treat him after the MRI study, so Hendrickson saw a surgeon who recommended bilateral nerve blocks.  When that failed to relieve his pain, Hendrickson opted for surgery in March 2014 to decompress the disc at L4-5.  The surgery provided three months’ relief, but a repeat MRI showed persistent disc herniation at L4-5 with impingement on the L5 nerve root.  Hendrickson said he continued to work in pain but avoided any non-work activities that might increase his pain.

Hendrickson filed a Claim Petition and a Motion for Medical and Temporary Disability Benefits, asserting that UPS should pay for his back surgery and lost wages based on occupational injuries over the years.  UPS opposed the motion and argued that the claim was time barred because the back problems stemmed from the 2002 trauma.  That claim had not been reopened but once, concluding many years ago.

Petitioner produced testimony from Dr. Michael Cohen, who contended that petitioner’s back problems were not the result of trauma suffered in 2002 but rather repetitive occupational stress over the years.   Dr. Nirav Shah on behalf of UPS testified that petitioner suffered an injury to his back on April 16, 2014 from lifting packages.  However, the record did not support Dr. Shah’s assertion that there was a work accident on April 16, 2014.   Dr. Shah testified that petitioner’s back revealed multiple herniations that were the result of chronic degenerative changes in the spine.  He said these changes progressed naturally, not from repetitive occupational exposures.

The Judge of Compensation found Dr. Cohen to be more persuasive than Dr. Shah.  The judge credited petitioner’s testimony that the 2006 transfer to feeder and shifter work worsened his spine condition.  The judge noted that petitioner frequently bounced around in his truck when driving over potholes or bumps in the road.   The judge further noted that the action of hitting the pin in connecting vehicles created a sensation of petitioner being hit in the low back.  He found Dr. Cohen credible in explaining how driving a tractor trailer objectively worsened petitioner’s low back.   The Judge found Dr. Shah less than credible because in part Dr. Shah mistakenly believed there was a 2014 traumatic accident.  The judge found that there was aggravation and acceleration of petitioner’s spine from 2006 to 2013 caused by work.

UPS appealed and argued again that petitioner’s claim petition was barred by the statute of limitations because everything went back to 2002 accident.  The legal argument was interesting, pitting two major case precedents against each other.  UPS argued that this was like the case of Peterson v. Hermann Forwarding Co., 267 N.J. Super. 493 (App. Div. 1993), certif. denied, 135 N.J. 304 (1994).  In that case a trauma occurred to a truck driver, whose back got progressively worse after the next five brief trucking jobs he worked, eventually leading to total disability.  The Appellate Division placed responsibility in that case on the first employer with the traumatic event, stating that there was no objective proof of worsening over the next five employments.  All of the occupational claims were dismissed.

Petitioner relied on the case of Singletary v. WAWA, 406 N.J. Super. 558 (App. Div. 2009).   The rule in that case was that “Very short periods of employment . . . may allow no reasonable inference of material contribution to disability. In contrast, long periods of physically taxing employment, such as the five years Singletary worked at WAWA after her December 2001 accident, may reasonably support a finding of material contribution of disability.”  The Appellate Division disagreed with UPS and concluded that petitioner’s occupational exposure was largely responsible for causing petitioner’s medical issues.  Counsel for Hendrickson, Mr. Richard Schibell, Esq., contended that petitioner’s back pain progressively worsened over the years due to ongoing stressors at work, and that there was no statute of limitations issue since petitioner was still being exposed to occupational injuries when he filed the claim petition.

The case can be found at Hendrickson v. UPS, A-3627-15T2 (App. Div. July 11, 2017).  The case shows how an occupational orthopedic disease claim must be proved in order to prevail in workers’ compensation.  There must be detailed testimony by the employee or co-employees of credible physical stressors, and then credible medical testimony linking those physical stressors to the medical condition afflicting the claimant.

-----------------

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. 

In a surprising but unreported decision, the Appellate Division affirmed an award to a police officer who fell in the municipal parking lot on December 9, 2011 on a day when he was not supposed to be at work.  The officer said he came to work to collect his paycheck and also to check his court schedule while he was there.  The case is Grawehr v. Township of East Hanover, A-1686-15T3 (App. Div. June 29, 2017).

The accident involved a slip and fall on ice which led to shoulder surgery.  The Township denied the claim since petitioner was not working that day, and no one asked him to come to work.  The petitioner admitted that he was coming to work to get his paycheck, but he said that he also wanted to check his personal folder for any new subpoenas for scheduled court dates.  There had been problems with police officers missing scheduled appearances due to a recent merger with the Township of Hanover. A township Lieutenant testified that it was not uncommon for the more diligent officers to come in on their days off to check on their court files.

Even though Officer Grawehr never failed to appear for court and had not been disciplined (unlike others) for failing to come to court, and even though the next court date was not until December 22, the Judge of Compensation found for petitioner and awarded petitioner 27.5% or $41,187 for permanency and medical expenses. The Appellate Division affirmed. The theory of compensability in this case was the existence of a mutual benefit to the Township and the employee by these impromptu visits to the police department on days off.  The Township denied that there was any benefit to it at all.

The “mutual benefit” theory has been questioned as recently as May 1, 2017 in Liu v. 4D Security Solutions, Inc., A-3591-15T1 (App. Div. May 1, 2017).  In that similarly unpublished case a different appellate panel found that the mutual benefit doctrine did not survive the 1980 amendments.  That appellate panel rejected the doctrine completely just one month before this decision.  The decision in Grawehr makes no mention of the Liu decision.

In Grawehr, the Appellate Division struggled mightily to find case law supporting the existence of a mutual benefit doctrine.  The only case it cited was a pre-1980 case called Salierno v. Micro Stamping Co., 136 N.J. Super. 172 (App. Div. 1975), where a heart attack experienced by a worker during contract negotiations on behalf of his union was found to be compensable.   That case is not really a mutual benefit decision, and it would likely not meet the current law dealing with the requirements for compensability of heart attacks.  In essence, the panel in Grawehr assumed the existence of the mutual benefit doctrine even though the issue was whether it exists at all.

It is clear that an injury that occurs when an employee comes into work simply to pick up a paycheck is not compensable.  Miller v. Saker Shoprite, A-3746-13T2 (App. Div. November 13, 2015).  In this practitioner’s opinion, the Grawehr decision is open to criticism because the appellate panel never really found a case that supported the existence post 1980 of the mutual benefit doctrine in New Jersey.  Interestingly, neither could the appellate panel in Liu cited above.  This practitioner is aware of only two reported post-1980 decisions where the court based its decision on the existence of the mutual benefit doctrine.  One case was Daus v. Marble, 270 N.J. Super. 241 (App. Div. 1994) and the other was Mahon v. Reilly’s Radio Cabs, Inc., 211 N.J. Super. 28 (App. Div. 1986).  These cases were not mentioned in this matter or in Liu.  We will need clarification from a future reported appellate division panel or the Supreme Court on whether the mutual benefit doctrine, as applied to trips to and from work, still exists – or exists in any other context.

This case illustrates the problem inherent in the mutual benefit doctrine when it is applied to cases involving trips to work on non-work days.  The doctrine can be interpreted so broadly that it can create a massive end-around to the requirement that all accidents must meet the test of “in the course of employment.”  Anyone who comes into work to retrieve something and falls at work after hours or on days off can argue that there was a mutual benefit conferred on the employer by coming to work.  Do both parties have to agree that there was a benefit?  The township said there was no benefit in this case.  It is an extremely subjective test.  The obvious reason the claimant was coming to work in this case was to pick up his paycheck.  But that activity alone is not compensable.  Further, the next court date was 13 days away, so the decision in favor of compensability makes very little sense under any analysis.

-----------------

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. 

Beginning July 1, 2017, the maximum workers’ compensation payable in Alabama was raised to $843.00 per week and the minimum was raised to $232.00 per week.

Part four of the five-part test states that an employee must file a claim with his employer requesting the benefits in order to be entitled to the same. The South Dakota Supreme Court, in Chiolis v. Lage Dev. Co., 512 N.W.2d 158, 161-162 (S.D. 1994), stated:

“Even recognizing that the primary purpose of rehabilitation benefits is to restore the injured employee to substantial and gainful employment, the worker may not unilaterally decide what training he or she may want to pursue and proceed to do so at the employer’s expense. To approve such an independent approach to rehabilitation training by a claimant would result in untold administrative and economic chaos and a total breakdown of the legislatively intended benefits to the injured worker of rehabilitation training. While such self-improvement is highly laudable, particularly in view of the claimant’s independent quest for it, unaided by the employer or carrier, it is outside the range of benefits provided by South Dakota law. To approve a procedure which allows an injured employee to select a rehabilitation program before petitioning Department or reaching an agreement with the employer would be putting the cart before the horse.”

The Court in Chilois denied retraining benefits, in part, due to the claimant’s unilateral decision to enter into a rehabilitation program.

The Department addressed a similar factual scenario in Shellie Holvig v. Rent-a-Center and Specialty Risk Services, HF No. 130, 2004/05, when the claimant therein moved to Phoenix and began her retraining program without alerting her employer and insurer of the same. The Department held that the acts of the claimant deprived her employer and insurer or a reasonable opportunity to evaluate her vocational situation properly and demonstrate the necessity of element four of the retraining test. Id. at 6. The Department also noted that the claimant had decided long before the denial to assume financial responsibility for her bachelor’s degree, and that there was no evidence that employer and insurer therein led the claimant to believe she would receive benefits for the program and she took no actions to her detriment based on any actions of the employer and insurer. Id.

All seemed pretty clear on this issue until Koval v. City of Aberdeen and SDML Workers’ Compensation Fund, HF No. 142, 2014/15. In Koval, the claimant had completed his claimed retraining program before petitioning or otherwise requesting retraining benefits from the Employer/Provider. On a motion for summary judgment, the Department stated:

“However, there is nothing in SDCL 62-4-5.1 or the five part test established by the Supreme Court which dictates when such a claim must be made. It is merely required that a claim be made. That such a claim could later be denied is merely a risk the Claimant makes by not getting preapproval. “A claimant may enroll in a rehabilitation program without the consent of employer, but he does so at his own risk; that is, rehabilitation benefits will not be guaranteed for a particular program simply because the program is one the claimant wishes to pursue.” Kurtenbach v. Frito-Lay, 1997 S.D. 66, ¶ 23, 563 N.W. 2d 869, 875. “It is [claimant’s] right to seek a college education, but [employer] cannot be compelled to pay for such a program if it is not necessary.” Chiolis v. Large Dev. Co., 512 N.W.2d 158, 161 (S.D. 1994) (emphasis added) (quoting Cozine v. Midwest Coast Transport Inc., 454 N.W.2d 548, 554 (S.D. 1990)).

Pursuing a rehabilitation program without first filing a claim and receiving approval does not guarantee the receipt of benefits. However, not seeking preapproval does not preclude the application of the rest of the test to establish if claimant is entitled to the rehabilitation benefits. Therefore, since Claimant’s claim satisfactorily fulfills step four of the test, and Claimant and Employer disagree on his fulfillment of the rest of the five-part test requirements, issues of material fact remain regarding Claimant’s petition for retraining benefits.”

The Koval decision was settled before hearing and consequently there have been no appeals from this curious decision that clearly allows a claimant, contrary to Chiolis, to “…put the cart before the horse”.