State News

The case of Kaur v. Garden State Fuels, Inc., A-2135-17T1 (App. Div. April 12, 2019) presents some interesting legal issues.  The facts begin with the tragic death of Surinder Singh, who was shot and killed during the course of his employment at Woodbury Gulf LLC. 

In 2014 Singh’s widow, Kirandeep Kaur, filed a dependency claim petition in workers’ compensation. The gas station was uninsured for workers’ compensation at the time of her husband’s death. Mr. Goyal and Mr. Saini were the sole members of the Woodbury Gulf LLC. 

In 2015 Kaur sued Woodbury Gulf civilly alleging that the station’s negligence led to the death of her husband.  She amended that suit in 2017 to add a claim against Mr. Goyal. 

On March 28, 2016, petitioner settled her workers’ compensation dependency claim petition for $150,000.  She said that she understood that the Section 20 settlement was final and that she could not return for further workers’ compensation benefits.  Petitioner received mostly deferred payments from the two members of the LLC:  $30,000 up front followed by $5,000 each month for 24 months.  The Order recited that the settlement was not a complete and absolute surrender and release of any and all rights of petitioner’s dependents under Section 13.  This was important because the petitioner and decedent had two young children.

The Judge of Compensation did not sign the 2016 order but waited until 2018 when all payments had been made.  Counsel reappeared on April 13, 2018, and the Judge again commented that this Section 20 settlement did not contemplate a release of decedent’s dependents’ rights. 

Meanwhile in her civil law suit, Kaur made some interesting arguments:

1.      She argued that she could sue Woodbury civilly because the gas station’s insurance had lapsed.  She contended that this was akin to an intentional wrong, thereby exempting her from the fundamental rule that neither an employee nor an employee’s dependents can sue the employer.

2.      She also argued that payments under a Section 20 are not recognized as workers’ compensation payments for any purpose other than for insurance rating purposes, so a civil suit should be permitted.

The motion judge ruled for Woodbury LLC and its members, holding that the civil law suit was barred.  Kaur appealed.  The Appellate Division devoted a good deal of analysis to Section 20 settlements.  It said, “A Section 20 settlement bars a subsequent lawsuit against the paying employer as it would be unfair to hold the employer liable for both common law damages and workers’ compensation liability,” citing Hawksby v. DePietro, 165 N.J. 58 (2000). 

The Court also seemed to suggest that a Section 20 settlement amounts to an implied acknowledgement that a claimant’s disability is work related, citing the Sperling case for this concept. For these reasons the Appellate Division affirmed the ruling that petitioner and her children could not sue her husband’s employer or the members of the LLC. 

As for the failure of Woodbury to maintain insurance for its own employees, the Court pointed out that this was potentially either a disorderly person offense or a fourth-degree crime, depending on whether the actions were willful.  Nonetheless, the Court ruled, “Their failure to maintain insurance did not alter the effect of the Workers’ Compensation bar, especially since plaintiff took advantage of the Act’s statutory scheme to obtain benefits under the Section 20 settlement.”

Importantly, the Court confirmed that consent of the workers’ dependents must be obtained for a Section 20 settlement that purports to waive dependency benefits.  In sum, the Court held that the two minor children were entitled to bring a dependency claim of their own against Woodbury Gulf and the members of the LLC.  The Court cited the Kibble case for the proposition that “a Section 20 settlement between the employer and a claimant ‘cannot extinguish the rights of those who do not participate, or do not have the opportunity to participate in a settlement.’”

The case is helpful in understanding that it does not really matter whether the workers’ compensation claim is resolved under an order approving settlement with reopener rights or a Section 20:  in either case, the claimant and his or her dependent cannot bring a civil action against the employer since the exclusive remedy is workers’ compensation.

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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. 

An independent medical examination can be requested at any reasonable time and place in the state for a variety of reasons: there may be an issue of causation, ability to work, second opinion on surgery, need for further treatment, or assessment of permanent partial disability.  No matter what the purpose of the examination is, a well-reasoned IME is critical to the successful defense of workers’ compensation claims.

This blog focuses on the steps employers, carriers, third party administrators and lawyers should take as well as the mistakes to avoid in setting up IMEs.

Explain the nature of the claim to the IME physician.

Example:  Employee files an occupational claim petition alleging physical labor from 2000 to January 30, 2019 caused knee pathology. The employer denies the claim petition. An IME is arranged.  There is no explanation of the allegations of the claim to the IME physician. No letter is ever sent other than perhaps a check-off letter asking for guidance on “permanency” and “causation.” The injured worker tells the physician during the IME that on January 30, 2019 he felt pain in his left knee while walking at work. The employee has an MRI showing a tear. The doctor writes a report stating, “I find that the petitioner’s accident of January 30, 2019 caused his knee pathology and I recommend arthroscopic surgery.”

What went wrong? The claim was not for a specific accident!  January 30, 2019 was just the last day of exposure when the pain was noticed or became intolerable.  Occupational claim petitions are required to list a beginning and end date.  This claim asserted that 19 years of physical labor caused the knee pathology, not walking at work one day (which is not a true accident).  The doctor in this case did not know that the claim was denied, nor that this was truly an occupational claim and that the worker was never injured on any particular day. 

Send the IME physician key information in the case:

As a general rule, the IME physician wants to read the claim petition to understand the formal allegations, as well as the answer of the respondent. The doctor wants to see all treating records including prior records that may be relevant.  If there are answers to interrogatories, the doctor will want to see them as well because they often contain important information.  If there is a recent and subsequent injury, whether work or non-work related, the IME doctor will want that information.

If you have a specific doctor or type of specialty you need for an IME, don’t call an IME group and ask for the next available IME date without mentioning the particular physician or specialty.

IME companies have dozens of physicians that they schedule for IMEs. Some are surgeons; some are not.  If you want the earliest possible date, the company will find the physician whose calendar is open and assign you that doctor.  That may or may not be the doctor or specialty you wanted. Some physicians are very busy and booked out for three months; others have fewer assignments.  If you just want any orthopedic surgeon as soon as possible, but you do not want an occupational physician or physiatrist, then make that clear.

Make sure you have all the relevant records –including records of prior and subsequent accidents – before setting up the IME.

We all want cases to move quickly.  The average New Jersey claim petition lasts 28 months, so understandably clients are concerned about moving files.  However, rushing an IME is generally a mistake.  The absence of critical records often costs the employer a great deal of money.   The IME doctor can only give an opinion on the records he or she has.  There may be prior records that will show that the condition at issue was already in existence a few months before the accident, or that there has been a subsequent non-work car accident which has significantly aggravated the work-related condition.  The process of getting medical records takes time.  It takes time to prepare and send HIPAAs to opposing counsel, who then send them to their clients to be returned to respondent counsel.  Hospitals often delay sending records.  The hospital may reject the medical authorization and demand a subpoena.  But getting the prior or subsequent medical records may help clarify whether the claim is even work related, thereby avoiding costs of surgery and a large permanency award, with a potential reopener down the line.  This practitioner has seen cases where the doctor is missing almost all the treating records and writes a report basically drawing no conclusions pending receipt of medical records.  That creates a need for a second IME with double the cost.

When a case has high exposure or is likely to be tried, retain the most qualified expert.

Yes, it costs more to retain a board certified expert with a sub-specialty. But there are many high exposure cases in workers’ compensation, and the cost of not retaining a specialized expert is far greater than the extra $1,000 you may pay for a medical report from a highly qualified expert.  When you have a case involving lung cancer, you should retain a board certified oncologist or pulmonologist.  There are many internists who do such examinations but they may not have sat for or passed the board certification in pulmonology.  The outcome of a case often depends on the credibility of competing experts.  Judges always assess credibility of medical experts; they review their training and qualifications, and they consider the expertise of the IME physician when the experts flatly disagree on an issue in the case. This advice is also true in orthopedic cases.  If the case involves an issue of whether a fusion surgery should be performed, respondent is far better off retaining an expert who performs fusions, rather than an expert who does not perform such surgery.  

Find out early on if a translator is needed.

There are few things in workers’ compensation more frustrating than cancellation of an IME because the employee could not converse with the IME physician.  Contact must be made early on with petitioner’s attorney to inquire whether the injured worker will need a translator and if so, what specific language will be needed.

Try to make a reminder call or send an email to petitioner’s attorney a few days before the IME.

This is not always possible to do, since everyone is so busy, but it pays off.  Many times a letter is sent to a petitioner’s attorney two or three months before the exam date.  When an exam is set up months in advance, there is a higher likelihood of a missed appointment.  Communications fall apart or injured workers forget about the exam date.  If possible, a follow-up call or email to counsel a few days before the exam may eliminate a potential missed appointment.

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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. 

Today marks 100 years since Governor Thomas Kilby signed bill 26-1 into law thereby creating what is now known as the Alabama Workers’ Compensation Act.  Back then, it was known as the Alabama Workmen’s Compensation Act.  The law later went into effect on January 1, 1920.  Although there has been some recent controversy as to the constitutionality of the Act in its current state, it remains a better alternative to employees having to prove tort liability and tort liability exposure for the employer.  As the Honorable E.R. Mills so adeptly stated in his Singletary v. Mangham Construction,
418 So.2d 1138 (Fla. 1st DCA, 1982) opinion, “Workers' compensation is a very important field of the law, if not the most important. It touches more lives than any other field of the law. It involves the payments of huge sums of money. The welfare of human beings, the success of business, and the pocketbooks of consumers are affected daily by it.”

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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.

2019 Kansas Legislature:  There were no substantive Kansas work comp legislative changes in 2019.

Constitutionality of Statute Requiring Use of AMA Guidelines 6^th Ed. –Johnson case pending before the Kansas Supreme Court:  As of August 1, 2019, the Kansas Supreme Court is considering an appeal from a decision by the Kansas Court of Appeals which issued a broad constitutional rejection of Kansas’ use of the AMA Guides to the Evaluation of Permanent Impairment 6^th Edition to determine permanent partial functional impairment in Kansas work comp cases.

In Johnson v. U.S. Food Serv., 56 Kan. App. 2d 232, 427 P.3^rd 996 (2018), the Kansas Court of Appeals ruled across the board striking down all 2013 Kansas act amendments which substituted the use of the AMA Guides 6^th Ed. for the AMA Guides 4^th Ed. to both scheduled and general body disabilities.  The Court’s ruling broadly applies to all injured workers and all body part ratings.  In colorful literary prose, theJohnson Court focused in on the question of whether the 2013 legislative substitution of the 6^th Ed. for the 4^th Ed. finally so tipped the scales that the Act’s workers compensation legislative remedy is no longer an adequate substitute for the loss of the injured employee’s original common law tort remedy.  The Court held that the use of the 6^th Ed. over the 4^th Ed. so drastically cut the remedy and monetary recovery of Kansas’ injured workers, that there is no longer an adequate quid pro quo for injured workers suffering a permanent impairment of function for their work injury.

Approaching the issue from a historical perspective, the Court noted that multiple pro-employer legislative revisions to the Kansas Act over the years has resulted in injured workers seeing a gradual erosion of the fair exchange between rights granted under the Act verses the recovery rights lost under common law, equivalent to “death by a thousand paper cuts” for the permanently disabled worker in Kansas.

Note that Kansas never adopted the AMA Guides 5^th Ed., going directly from use of the 4^th Ed. to the required use of the 6^th Ed. under the 2013 legislative paper cut.  Thus, the ultimate outcome of this issue will likely be the binary choice between whether the law mandates use of the 4^th Ed. or the 6^th Ed. of the AMA Guides.

The Johnson decision by the Kansas Court of Appeals was timely appealed to the Kansas Supreme Court and on February 28, 2019 the Supreme Court accepted the Petition for Review of the Court of Appeals decision.  As of August of 2019, the Court is towards the end of the briefing process and it is likely oral arguments will be scheduled for some time in late 2019 or early 2020.  It is anticipated that a decision by the Kansas Supreme Court will be issued by spring 2020.

During the pendency of this appeal, most parties to active ongoing litigated KS work comp cases are procuring both AMA Guides 4^th Ed. and 6^th Ed. impairment rating opinions, not knowing which Edition will apply after the Supreme Court decides the issue.  Employers, carriers and TPAs should consult with defense counsel when considering settling any Kansas work comp claim, particularly regarding what rating opinions would be needed to reliably accomplish a claim settlement before a Kansas settlement judge.

2019 Kansas Schedule of Medical Fees.  The updated 2019 Kansas Medical Fee Schedule effective on and after March 29, 2019 and applicable to Kansas work comp claims can be found on the Kansas Division of Workers Compensation web site at the following link:

https://www.dol.ks.gov/docs/default-source/workers-compensation-documents/schedule-of-medical-fees/2019-schedule-of-medical-fees.pdf?sfvrsn=b0a18e1f_12

2019 Rates Update.  The maximum weekly indemnity benefit rate was increased to $666.00, effective 7/1/2019 through 6/30/2020, based upon annual indexing to the state average weekly wage of $888.29.  The minimum weekly benefit rate for fatalities for the same period, pursuant to K.S.A. 44-510b, is increased to $444.00.  Medical mileage reimbursement rate for the same period increased to $.58 cents per mile.

By: Bruce Hamilton and Elizabeth Ligon

The North Carolina Court of Appeals recently released two decisions that impact the state’s exclusive remedy doctrine. Under N.C. Gen. Stat. § 97-10.1, the North Carolina Workers’ Compensation Act provides an exclusive remedy for unintentional work-related injuries. This provision affords North Carolina employers “limited” liability and allows employers to more accurately calculate their exposures, unlike in the civil liability arena. Injured workers, on the other hand, have certain guaranteed benefits for compensable work injuries, and claims are handled much more efficiently through the North Carolina Industrial Commission.

Historically, there have been few exceptions to the exclusive remedy doctrine. The most notable exception was outlined inWoodson v. Rowland, 329 N.C. 330, 407 S.E.2d 222 (1991), which permitted employees to pursue civil actions in cases where the employer intentionally engaged in misconduct knowing it was substantially certain to cause serious injury or death to an employee, and an employee was injured or killed by that misconduct.

In Seguro-Suarez v. Key Risk Insurance Co., ___ N.C. App. ___, 819 S.E.2d 741 (2018), the plaintiff fell from a significant height and suffered a traumatic brain injury. The claim was accepted as compensable by Key Risk. However, after a period of hospitalization and recovery, Key Risk denied the treating physician’s request for additional medical treatment, a neurological evaluation, and an occupational home therapy evaluation. Key Risk also obtained surveillance of the plaintiff and provided heavily edited footage (from nine hours over several months to 45 minutes) to the plaintiff’s neuropsychologist, which caused him to change his opinion and opine that the plaintiff was exaggerating his symptoms and did not need further treatment.

After several adverse court decisions, Key Risk obtained an independent medical evaluation, which confirmed the validity of the plaintiff’s current condition and ongoing disability. Key Risk then obtained additional surveillance, and Key Risk’s investigator showed local authorities edited footage and convinced them to bring criminal charges against the plaintiff for obtaining workers’ compensation benefits under false pretenses. The plaintiff was arrested, jailed, and ultimately indicted on numerous fraud charges. These charges were ultimately dismissed, and the plaintiff filed a civil suit against Key Risk, its Senior Vice President, two Vice Presidents, the handling adjuster, and the investigator. The Court of Appeals upheld the trial court’s denial of the defendants’ motion to dismiss the plaintiff’s malicious prosecution, abuse of process, and unfair and deceptive trade practices claims, finding that these claims were only “tangentially” associated with his workers’ compensation claim. The Court noted concern that, in the extreme, an insurer could “hire an assassin to kill an insured employee” and try to hide under the protection of the exclusivity provision.

In the second case, Jackson v. The Timken Co., ___ N.C. App. ___, ___ S.E.2d ___ (2019), the plaintiff suffered a stroke at work and was seen by the staff nurse, a licensed RN. The staff nurse took the plaintiff’s blood pressure, asked him to complete a drug screen authorization form numerous times, obtained hair samples for a drug screen test, and sent him home with instructions to follow up with his primary care provider. Shortly thereafter, the plaintiff collapsed in the parking lot of his primary care provider’s office, and was rushed to the hospital. He suffered permanent injuries.

The plaintiff initially filed a workers’ compensation claim with the Industrial Commission.  He also filed a civil action in Superior Court while waiting for the Industrial Commission to issue a decision, alleging he was negligently diagnosed and treated by the staff nurse. The Superior Court asserted subject matter jurisdiction over the case, and denied the defendants’ motion to dismiss for lack of subject matter jurisdiction. The Deputy Commissioner at the Industrial Commission subsequently denied the plaintiff’s claims on the ground that the plaintiff did not suffer a compensable injury by accident. The plaintiff did not appeal the denial of his workers’ compensation claim.

The Court of Appeals upheld the Superior Court’s decision to assert subject matter jurisdiction, contradicting the North Carolina Supreme Court’s prior decision holding that the Act “provides the exclusive remedy when an employee is injured in the course of his employment by the ordinary negligence of co-employees.”  Abernathy v. Consolidated Freightways Corp. of Delaware, 321 N.C. 236, 362 S.E.2d 559 (1987). The Court attempted to distinguish Abernathy on the basis that, in this case, the plaintiff was alleging that his co-worker had breached a special duty for medical professionals when she rendered care, and the plaintiff did not suffer a compensable injury by accident.

Taken together, these two cases appear to carve out additional exceptions to the exclusive remedy doctrine, and could potentially expose employers to additional civil liability.Segura-Suarez allowed a civil action when certain tort claims were only “tangentially” associated with a workers’ compensation claims, although it remains to be seen whether the decision will be limited to the case’s particularly egregious facts. Jackson not only appears to have created an exception in cases involving potential medical malpractice committed by an employer’s on-site medical staff, but could also be read to suggest a plaintiff may be able to successfully pursue a civil action if his claim is deemed not compensable under the Workers’ Compensation Act.  The attorneys at Teague Campbell will continue to monitor the courts’ handling of the exclusive remedy doctrine. Please reach out to a member of ourworkers’ compensation team with any questions.

On July 17, 2019, the Minnesota Supreme Court issued its decision in Smith v. Carver County, A19-0199 (Minn. 2019).  Smith claimed he sustained PTSD from numerous traumatic incidents he experienced while working as a deputy sheriff. Carver County denied liability.  PTSD is a compensable workers’ compensation condition in Minnesota if it meets the specific criteria set forth Minn. Stat. § 176.011.  For an employee to recover workers’ compensation benefits for PTSD, the employee must prove a psychiatrist or psychologist has diagnosed him or her with PTSD and the professional based the employee’s diagnosis on the latest version of the DSM (Diagnostic and Statistical Manual of Mental Disorders by the American Psychiatric Association).

At trial, Smith presented medical evidence of his PTSD diagnosis via report and deposition transcript of a psychiatrist (Dr. Keller).  The County countered with an expert report and deposition transcript of their own, Dr. Arbisi (psychologist), who opined Smith did not have PTSD but did diagnose Smith with somatic symptom disorder and adjustment disorder (not compensable diagnoses).

The judge adopted the opinion of Dr. Arbisi, finding it persuasive and noting Dr. Keller was unpersuasive.  The WCCA reversed, holding that the trial judge must confirm the expert’s reports are in line with the precise wording of the DSM.  Effectively, the WCCA’s decision would require judges to “lay each expert’s report on the desk next to the DSM-5 and assess whether the medical professional’s opinion confirmed with the precise wording of the DSM-5 as the compensation judge interprets those words.”

The Minnesota Supreme Court disagreed with the WCCA, noting nothing in the PTSD statute “even remotely suggests that such an exercise is required.”  Because Dr. Arbisi’s opinion had adequate factual foundation, the trial judge’s choice of experts is to be affirmed.  Smith’s claim for PTSD related workers’ compensation benefits was denied.

https://mn.gov/law-library-stat/archive/supct/2019/OPA190199-071919.pdf

Summary prepared by Parker T. Olson

The Minnesota Legislature approved statutory changes to implement a modernized technology system, which will replace the aging system which has been in place since 1992.  These changes are promised to bring a simplified and expediated interaction with the workers’ compensation system.  The effective date is August 2020.  These changes also clarify when first reports of injury and subsequent reports must be filed with the commissioner, adding that a first report of injury must be filed when a dispute is initiated, when a vocational rehabilitation form is filed and when permanent partial disability is ascertainable.

Minn. Stat. § 176.312 is amended to extend the time from 10 to 20 days for a party to petition for reassignment of a compensation judge.  This change went into effect July 1, 2019.

Also, there are new SAWW, TTD maximum rates effective for October 2019: the statewide average weekly wage (SAWW) effective October 1, 2019, is $1,112.00, the maximum temporary total disability rate (TTD) will change to $1,134.24 and the minimum permanent total disability benefit rate (PTD) will be changed to $723.00.

Summary prepared by Whitney Teel

Written By: Scott Farwell and Latasia Fields

In the world of insurance, it is inevitable that policies will be cancelled. As you can imagine, there is nothing worse than receiving a claim on a policy well after the effective date of cancellation. What should be a simple, clear cut denial of liability can quickly spiral into an expensive defense effort resulting in payment on the cancelled claim. If this has never happened to you you’re probably wondering how something like this is even possible. The answer is simple failure to comply with statutory requirements for effective cancellation.

There are several statutes addressing the cancellation of insurance policies, and the controlling statute is determined by the type of policy being cancelled. For example, cancellation of a workers’ compensation insurance policy is governed by N.C.G.S. § 58-36-105, but cancellation of a homeowners’ insurance policy is governed by N.C.G.S. § 58-41-15. Regardless of the type of policy being cancelled, the North Carolina Supreme Court has long established the principle that failure to comply with the statutory requirements for cancelling an insurance policy renders the cancellation ineffective.Pearson v. Nationwide Mut. Ins. Co., 325 N.C. 246, 382 S.E.2d 745 (1989). Compliance with statutory requirements may seem straightforward but there are a few common pitfalls that prevent effective cancellation and create liability where there should be none. Some of these include failure to provide proof of mailing such as a green card from certified mail, actual notice and/or receipt of notice by the insured.

Recently, the North Carolina Court of Appeals addressed the requirement of actual notice and/or receipt of notice by the insured for effective cancellation of insurance coverage. InHa v. Nationwide Gen. Ins. Co., Nationwide issued Plaintiffs a homeowner’s insurance policy prior to an inspection of the home. During the inspection of the home, several hazards were discovered which led to Nationwide’s decision to cancel the policy. In keeping with company procedures, a letter was sent to the Plaintiffs outlining the hazards noted during the inspection and the steps necessary for the Plaintiffs to remedy these issues and reinstate their homeowner’s insurance policy. Plaintiffs took no steps to remedy the hazards and the policy was not reinstated. Nationwide refunded Plaintiffs’ pro-rata share of the premium paid and ceased deducting premium payment from the Plaintiffs’ bank account. Approximately six weeks after the cancellation, Plaintiffs’ home was destroyed by a fire. Plaintiffs filed a claim, which was denied by Nationwide who argued Plaintiffs’ home was not insured as the policy had been cancelled. The trial court agreed with Nationwide and dismissed Plaintiffs’ claims.

Ultimately, the Court of Appeals reversed the trial court decision, finding that N.C.G.S. § 58-41-15 required actual delivery to and/or receipt of the notice of cancellation by the insured. The Court reasoned that as Nationwide only provided “proof of mailing” which the Plaintiffs alleged they did not receive, Nationwide failed to provide Plaintiffs sufficient notice of cancellation in compliance with the statute. According to the Court, N.C.G.S. § 58-41-15(c) required Nationwide to furnish notice of cancellation which meant something more than proof of mailing.

Risk Handling Tips: This case creates in the insurer an obligation to not only send notice of cancellation to the insured, but also to prove the insured actually received that notice if the insurer intends to deny coverage on the grounds of cancellation of the policy. Here are some tips on how to ensure that your company is effectively cancelling policies. First, know the statute that governs cancellation of the type of policy you are seeking to cancel. Second, review your mailing procedures to determine how your cancellation notices are mailed. If you are using certified mail, be sure there is a system in place to receive and maintain the return receipts. If you are sending notices electronically, develop a system to maintain those communications as well. Although these additional precautions won’t guarantee success in litigation over denied coverage, you will be in a far better position having this information.  Feel free to reach out to ourinsurance coverage team with any questions.

SAVE THE DATE

By

Kevin L. Connors, Esquire

To All Workers’ Compensation Practitioners and Clients:

The National Workers’ Compensation Defense Network is hosting its 2019 Fall Conference in Chicago, Illinois on September 26, 2019.

The NWCDN event is open to all NWCDN member firms and their invited guests.

The NWCDN never charges its guests for attendance at its Conferences.

The all-day Conference will be conducted on September 26, 2019 at the InterContinental Chicago Magnificent Mile in Chicago, Illinois located at 505 North Michigan Avenue, Chicago, Illinois.

Attaching a copy of the NWCDN’s Save The Date for its 2019 Conference, hotel reservations can be made by calling the hotel and mentioning the NWCDN Conference at 800-628-2112.

Registration for the event can be coordinated by contacting Carol Wright at Capehart Scatchard atcwright@capehart.com.

As always, NWCDN Conferences are intended to be educational, constructive, illuminating, and just plain good fun.

Also keep in mind that the NWCDN will be hosting a Cocktail Party on Wednesday, September 25, 2019.

The NWCDN would like to thank you for attending our Conference.

The NWCDN is a network of “Many Firms, One Purpose”, with all of our firms dedicated to defending workers’ compensation claims, for the protection of their clients, employers, insurers, and third-party administrators.

Join us in Chicago to meet our members and member firms!

ConnorsO’Dell LLC

Trust us, we just get it!  It is trust well spent!

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

In an important reported decision, and one of first impression at the Appellate level, the Court in Collas v. Raritan River Garage, A-3103-17T4, (App. Div. July 19, 2019), held that the Judge of Compensation was correct in basing the counsel fee of petitioner on petitioner’s life expectancy, not limited to 450 weeks, as has been the practice in the New Jersey Division.

For many decades, judges of compensation have awarded counsel fees in dependency cases on a 450-week period, even though dependent spouses receive benefits until their death, unless they should remarry.  Counsel in Collas argued that basing the fee on the life expectancy of the dependent spouse makes more sense.  The Judge of Compensation reviewed two places in the statute where 450 weeks is referenced.  First N.J.S.A. 34:15-12(b) provides in total disability claims that compensation shall be for a period of 450 weeks, at which time compensation payments shall cease unless the employee shall have submitted to such physical or educational rehabilitation as may have been ordered by the rehabilitation commission, and can show that because of such disability it is impossible for the employee to obtain wages or earnings equal to those earned at the time of the accident.”   Otherwise the statute makes clear that total disability benefits continue beyond 450 weeks.

The other statute that discusses 450 weeks appears in N.J.S.A. 34:15-13 pertaining to dependency claims. That section states that “This compensation shall be paid, in the case of the surviving spouse, during the entire period of survivorship or until such surviving spouse shall remarry and, in the case of other dependents, during 450 weeks …If a surviving spouse remarries before the total compensation is paid, he or she is entitled to a payment of 100 times the amount of the weekly compensation immediately preceding the remarriage, whichever is lesser.  The statute makes clear that a dependent child may receive dependency benefits throughout attendance at a full-time college or university but no later than age 23.  The so-called marriage penalty does not apply to the surviving spouse of a deceased member of the state police or member of a fire or police department or force who died in the line of duty.

Raritan River Garage argued that it has always been the accepted practice in the Division to base the counsel fee of the prevailing dependent on a 450-week period.  Further, Garage argued that it is speculation to pay a counsel fee on an amount of years beyond 450 weeks because the spouse may remarry or die.  The Judge of Compensation disagreed and asked the following rhetorical question:  “Is a previously legislatively mandated 450-week period less speculative in terms of calculating [Collas’] true award than the life expectancy tables published in the court rules?”

The Appellate Division agreed that using life expectancy tables is no more speculative than using a 450-week period.  The Court also observed that there is no link in Section 13 governing dependency awards to the section of the statute governing counsel fees in N.J.S.A. 34:15-64.  That section authorizes the Judge of Compensation to award a counsel fee to a successful petitioner’s attorney “not exceeding twenty percent of the judgment.”

The Appellate Division also noted that the 450-week period does not distinguish whether a surviving spouse is 20 years old or 60 years old.  In this case, Ms. Collas had a life expectancy of 12.7 years.  The Court did not hold that the life expectancy calculation must always be used.  “We determine only that the use of the table method was a reasonable option utilized by the judge.  We recognize that using the table method will, in many cases, increase the potential size of a fee award.  We thus caution against a reflexive application of a twenty-percent award without full analysis.”

Attorney Rick Rubenstein, who argued this case successfully in the Appellate Division, was interviewed following this decision.  He addressed two issues that many practitioners are now considering in light of the Collas decision.  One is whether acceleration of one-third payments when there is a very large third party recovery in a dependency case should also be based on the life expectancy of the dependent spouse.  Mr. Rubenstein said that he believes that the logic of Collas would extend to this situation.  He noted that payments of one third to a dependent where there is a large third party recovery are not technically payments of compensation but rather contribution to counsel fees. If the counsel fee to a dependent spouse is based on the life expectancy of the dependent, the argument would be that the return of the counsel fee to the dependent spouse would be analyzed in the same manner.

The other issue which Mr. Rubenstein addressed is whether the rule in Collas may be applied by future courts to total disability claims.  He said it is possible but less likely than the decision in Collas. “Courts will likely see a distinction between the marriage penalty in Section 13, and the re-employment offset in Section 12, both on practical grounds and public policy grounds. There is no public policy promoting remarriage, or marriage, for that matter. There IS a public policy favoring rehabilitation and re-employment. That public policy is reflected in the base period of 450 weeks absent from the dependency statute, and also reflected in the “contingent” nature of 12(b) benefits. 12(b) is contingent upon no active income, qualification upon examination, and lack of rehabilitation which is an ‘aim’ of the Act.”                 

This decision is certainly a significant one for practitioners and will require employers, carriers and third party administrators to amend the traditional calculation of reserves for counsel fees in dependency cases.

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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.