F&P Virginia Win: Recorded Statement a Valuable Tool

/in /by F&P Virginia Win: Recorded Statement a Valuable Tool

In a recent victory for Franklin and Prokopik’s Herndon office and counsel Jennifer R. Helsel, the Full Commission upheld the Deputy Commissioner’s Opinion that an injury from a knee bend did not arise out of the claimant’s employment.  The claimant worked as an aircraft maintenance mechanic and alleged a work-related injury to his right knee after bending down to inspect the engine of an airplane bound for an overseas flight.  Following the injury, the claimant required surgery and sought lifetime medical benefits as well as a period of wage loss.

The claims adjuster took the claimant’s recorded statement approximately one week after the injury.  At that time, the claimant stated, “I bent down. That’s all it was. It was just – it was something simple as bending down and getting up. That was it. Bending over, bending down.”  Initial medical records from Concentra stated that the claimant kneeled down and, upon standing up, he awkwardly twisted his knee.  At the evidentiary hearing, the claimant testified that it was a “funny” bend and not normal.  He stated that he felt a pop in his knee as he “started to go down.”  Additionally, the claimant could not explain how or why his knee popped when it did.

The Deputy Commissioner determined that the claimant’s testimony at the hearing was contradictory to the evidence offered that was contemporaneous to the accident.  More specifically, the Deputy Commissioner found that the recorded statement was more reliable than the testimony offered as to the mechanism of injury for the claim.  The claimant subsequently appealed the decision to the Full Commission.

All three Commissioners affirmed the Deputy Commissioner’s Opinion finding that the claimant’s injury did not arise out of his employment.  Although the claimant argued that the claimant’s testimony at the evidentiary hearing, coupled with the medical records, should be weighed more heavily, the Full Commission determined that the hearing testimony was inconsistent with the information provided in his recorded statement and what he reported while seeking medical attention.  As such, the decision regarding denial of the claim was affirmed.

This decision highlights the importance of a recorded statement during an initial investigation.  Because recorded statements are taken closer in time to the incident (and, oftentimes, before the claimant has retained counsel), this evidence is significant in evaluating the claim for compensability and potential defenses.  In this example, the Deputy Commissioner and Full Commission favored the description of the mechanism of injury in the recorded statement over the testimony provided under oath at the evidentiary hearing.

Applying the Appropriate Standard for Recreational Activities in Delaware

/in /by Applying the Appropriate Standard for Recreational Activities in Delaware

One of the more challenging issues that employers and insurers face is determining the compensability of a claimant’s injury.  More complex yet is the scenario in which a claimant is injured outside his or her normal work hours but during a quasi work-related recreational activity, such as a company softball league.

In a recent unreported decision, Morris James LLP v. Weller,2 the Superior Court of Delaware considered the compensability of an injury sustained by a law firm employee during his participation in the Wilmington Lawyers’ Softball League.  The claimant ruptured his Achilles tendon while running bases during a softball game.  The Industrial Accident Board (“Board”) found the claimant’s injury occurred during the course and scope of his employment.  On appeal, however, the Court reversed the Board’s decision and remanded the case to the Board for the application of the proper legal standard.  Although the Board’s new decision is yet to be determined, the Court’s analysis illustrates the proper application of the state’s laws regarding this type of recreational injury.

In Delaware, the threshold question for determining the compensability of a claim is whether or not the subject injury occurred during the course and scope of the claimant’s employment.  The state’s courts have evaluated “arising out of ” and “in the  course of ” employment as two separate elements.  “Arising out of ” pertains to the origin and cause of the injury while “in the course of ” relates to the time, place, and circumstance of the accident.

As the Court in Weller explained, Delaware has adopted a four-factor test set forth in Larson’s Workers’ Compensation Law for determining whether an employer-sponsored recreational event falls within the course and scope of an injured worker’s employment.  Those factors are: (1) the time and place; (2) the degree of employer initiative; (3) the financial support and equipment furnished by the employer; and (4) the employer benefit from the company team.3

If the recreational event is not employer-sponsored, a different test applies.  That test is: (1) whether the event occurs on the premises during a lunch or recreation period as a regular incident of employment; (2) whether the employer, by expressly or impliedly requiring participation, or by making the activity part of the services of the employee, brings the activity within the orbit of the employment; or (3) whether the employer derives substantial direct benefit from the activity beyond the intangible value of improvement in employee health and morale that is common to all kinds of recreation and social life.4

An important distinction between these standards is that the employer-sponsored test requires all four factors to be met, while the non-sponsored test needs only one of the three factors to be present.  It is also important to note the third prong, or “substantial benefit” factor, of the non-sponsored test specifically excludes intangible benefits from consideration.

In Weller, the claimant’s employer paid for the team’s jerseys, bats, and meals; signed a hold-harmless agreement with the practice field; and allowed employees to work on softball-related matters during working hours as well as permitted liberal leave to prepare for games.  Witnesses testified that softball was a team building activity and boosted morale.  There was conflicting testimony as to whether or not it enhanced productivity.  The employer contended it did not solicit business or realize a direct benefit from putting its firm name on jerseys.

The Board determined the sponsor of the subject softball game was the Wilmington Lawyers’ Softball League, not the employer.  Despite this, the Board incorrectly applied the employer-sponsored test.  In reaching its decision, the Board found the employer “probably” obtained a benefit of increased productivity of its employees by their participation in the softball league.  The Board also looked to the hold-harmless agreement executed by the employer and the employer’s liberal leave policy with respect to softball-related activities to determine that the softball game was within the course and scope of the claimant’s employment.

On appeal by the employer, the claimant conceded the Board had erred in applying the employer-sponsored standard.  Nevertheless, the claimant argued the error was harmless as the employer had derived a direct benefit from the recreational activity–a factor included under both tests.  Because only one factor is required to meet the non-sponsored test, the claimant suggested the Board would have reached the same decision regardless of which standard it applied.

The Court asserted it was unclear whether the Board would have found the probable increased productivity of employees playing softball amounted to the substantial benefit required under the non-sponsored test.  The Court, citing again to Larson’s, further noted the test requires the employer benefit be direct and beyond the intangible value of increased employee efficiency and morale common to all social and recreational events.  In the context of a recreational event such as a softball game, direct benefits have included employer advertising, publicity, and other such financial gain.

Ultimately, the Court found the Board’s application of the employer-sponsored test constituted legal error and remanded the case to the Board to apply the non-sponsored test.  The Board’s decision is now pending.

As Weller demonstrates, when investigating the compensability of a claim occurring outside of work, it is necessary to first determine who sponsored the event in order to apply the appropriate legal standard.  Other factors to take into consideration include the location of the event, its organizers, any financial support provided by the employer, the level of control and encouragement to participate exercised by the employer, and any monetary benefit to the employer.

2. This case is unpublished and only the Westlaw citation is currently available: 2017 WL 1040713.

3. 2 Arthur Larson and Lex K. Larson, Larson’s Workers’ Compensation Law, § 22.04[4][b]–[e] (LEXIS Publishing 2001).

4. See State v. Dalton, 878 A.2d 451, 455 (Del. 2005) (citing to 2 Larson’s Workers’ Compensation Law at § 22.01).

 

As Maryland Courts Roll Out E-Filing, Commission Likewise Presents New Electronic Form

/in /by As Maryland Courts Roll Out E-Filing, Commission Likewise Presents New Electronic Form

Electronic filing, or “E-filing,” of legal pleadings is a growing trend in jurisdictions across the state and country.  There have been recent developments in both Maryland courts and at the Maryland Workers’ Compensation Commission with respect to E-filing.

The Maryland Workers’ Compensation Commission recently introduced a new option to electronically file an Employee Claim Form.  Claimants and their attorneys will not be required to use the online form and still have the option to mail the form to the Commission if so desired. However, the Commission does require the updated formatted version to be used if mailing.

The E-filing option will largely affect claimant’s attorneys, as the process allows counsel to obtain an electronic signature and submit the form without the tedious logistics of mailing the Claim Form to a claimant and possible delayed filing.  E-filing does, however, provide benefits for defense counsel and their clients as well.  For example, although a medical authorization has always been part of the Claim Form, some claimants do not sign the authorization with their submission.  Now, if a claimant files the form online, he cannot submit it until the Medical Authorization is likewise signed and submitted.  This helps to expedite the employer and insurer’s ability to seek medical records directly from providers and can potentially alleviate the need for hearing continuances.

Of note, the Claim Form cannot be filed with the Commission online if all fields are not completed.  This should help to reduce the amount of mistaken omissions.  Moreover, the electronic data entry will help to avoid any question over a claimant’s handwriting or otherwise unclear entries. In this way, the more streamlined approach afforded by E-filing is arguably more efficient and reliable.

For all four Maryland court levels (District, Circuit, Court of Special Appeals and Court of Appeals), E-filing is mandatory for all matters (except landlord/tenant) if you are filing in a county that has been converted to the new Maryland Electronic Courts (MDEC) system.  Currently, the counties that have converted to E-filing include: Anne Arundel, Caroline, Calvert, Cecil, Charles, Dorchester, Kent, Queen Anne’s, Somerset, St. Mary’s, Talbot, Wicomico and Worcester.

For more information about this article, please contact John Archibald at 410.230.3064 or jarchibald@ fandpnet.com.

F&P Prevails on Statute of Limitations Defense Before the Court of Special Appeals of Maryland

/in /by F&P Prevails on Statute of Limitations Defense Before the Court of Special Appeals of Maryland

Franklin & Prokopik principal David Skomba recently prevailed on a statute of limitations defense argued before the Court of Special Appeals of Maryland.  In an unreported opinion, the Court held the Maryland Workers’ Compensation Commission (“Commission”) was legally correct in finding that the five-year statute of limitations barred a claimant’s request for additional indemnity benefits.

The claimant, a forklift operator, sustained a compensable injury to her right knee as the result of a work-related accident on April 24, 2001.  A year later, in 2002, the Commission found the claimant had sustained 12% permanent partial disability to her right leg in connection with the work accident.  The claimant was awarded additional benefits in 2006 when the Commission determined her permanent disability had increased by 10%.  The employer and insurer paid the final installment of the claimant’s permanency benefits in accordance with the 2006 Award on January 16, 2007.

In June 2009, the claimant was involved in a motor vehicle accident unrelated to her employment and sustained a fractured right foot.  While the matter was on appeal and in extended litigation regarding the claimant’s entitlement to additional medical treatment in light of the intervening accident, the claimant filed a request for modification of her permanency award due to an alleged worsening of condition to her right knee.  The employer and insurer objected, arguing the Commission did not have jurisdiction to consider the claimant’s request for modification while the matter was pending on appeal.  The claimant’s attorney filed a request for a continuance of the hearing.  In justification for the continuance, the claimant’s attorney indicated that both parties agreed the hearing to address the claimant’s worsening would be reset on request only after the claimant’s appeal was decided.  The Commission granted the claimant’s request and continued the matter with a notation it would be reset on request only.

The claimant’s appeal regarding her medical treatment was resolved in favor of the employer and insurer in May 2014 and the matter was remanded to the Commission for further proceedings.  The claimant again, on July 10, 2014, filed Issues with the Commission seeking a modification of her prior permanency award.  In response to these Issues, the employer and insurer raised statute of limitations, among other defenses.

Pursuant to Maryland Law, Labor and Employment (“L.E.”) § 9-736, a request to modify a previous award must be made within five years of the date of the accident (or the date of disablement for occupational disease claims) or the date of the last compensation payment to a claimant, whichever is later.  Maryland courts have interpreted the date of last compensation payment to mean the date the last payment check is received by the claimant.  Compensation does not include medical benefits nor does it include the payment of attorney’s fees awarded as a sanction.  If a claimant files and subsequently withdraws issues alleging a change in condition (i.e., a request for modification), the statute of limitations period is not tolled.1

In the instant case, the employer and insurer argued the last indemnity payment to the claimant was received on January 16, 2007, and the claimant was therefore barred by the five-year statute of limitations when she filed Issues for increased permanency benefits on July 10, 2014.  Following a hearing in October 2014, the Commission determined the claimant had sustained no increase in permanent partial disability to her right leg and, more importantly, the claim was barred by the statute of limitations.  The Commission denied the claimant’s request for a rehearing of its decision.  The claimant petitioned the Circuit Court for Howard County for judicial review of both decisions.  The lower court ultimately granted the employer and insurer’s preliminary motion to dismiss the claimant’s appeal, agreeing that the five-year statute of limitations precluded the claimant from seeking any further indemnity benefits.  The claimant then filed an appeal of the Circuit Court’s decision with the Court of Special Appeals.

After considering briefs and oral arguments by the parties, the Court issued its unreported decision on February 9, 2017.  The Court held the Commission had not erred in finding the five-year statute of limitations barred the claimant from seeking a modification of the Commission’s permanency Award when she applied for such a modification over seven years after the last disbursement of compensation benefits.

In reaching its decision, the Court rejected the claimant’s argument that the parties had agreed to a continuance of the claimant’s request for modification until after the conclusion of pending appellate activity and thus, the statute of limitations had been tolled.  Critical to the Court’s analysis was the finding that a reset on request, or “ROR” notation, does not preserve the tolling effect of a modification application.  In fact, the Court previously found in Giant Food v. Eddy, 179 Md. App. 633, 643-45 (2008), that a continuance reset on request is tantamount to a withdrawal of issues.  Relying upon prior authority of Vest v. Giant Food Stores, Inc. 329 Md. 461, 475-76 (1993), the Court explained that the five-year limitations period set forth in L.E. § 9-736 is to be strictly construed and neither the parties nor the Commission can bypass this statutory restriction.  Thus, the claimant’s argument that the parties unilaterally agreed to extend the statute of limitations failed.

As this case makes clear, employers and insurers should clearly document and retain records evidencing all compensation payments issued to a claimant or his attorney.  No party, even by private agreement, can agree to extend the five-year statute of limitations and the Commission should strictly apply the requirements of L.E. § 9-736.  If there is any issue as to the timeliness of a claimant’s request for modification of a prior award, it is good practice for employers and insurers to raise a statute of limitations defense pending further investigation.

For more information about this article, please contact Melissa McGaunn at 410.230.3062 or mmcgaunn@ fandpnet.com.

1. See McLaughlin v. Gill Simpson Elec., 206 Md. App. 242, 258 (2012).

Successive Carrier Liability

/in /by Successive Carrier Liability

It is not uncommon in a workers’ compensation claim for an injured worker to sustain a second work injury to the same body part.  When the subsequent injury involves a new employer, or the original employer has changed workers’ compensation insurers, issues of liability may arise.  More specifically, under what circumstances does liability for the claimant’s compensation shift to the successive insurer?

In Delaware, the Industrial Accident Board (“Board”) employs a two-prong test to determine liability.  The first factor is whether or not the claimant sustained a new injury or aggravation as opposed to a mere recurrence of symptoms.  An increase of symptomatology is not sufficient to shift liability onto a successive insurer.  The second factor is whether or not the claimant was involved in an “untoward event.”  An untoward event is defined as an accident or incident beyond routine work activities (i.e., a lifting incident versus a slip and fall).  In the event the original accident is barred by the statute of limitations, this standard of review will not apply and the Board will consider the original injury to be a preexisting condition.

In Greenville Country Club v. Greenville Country Club, 150 A.3d 1194 (2016), the Supreme Court of Delaware considered whether the Board correctly applied the rule for determining the liability of an initial versus successive workers’ compensation insurer.  The claimant, Jordan Rash, suffered two lumbar spine injuries in the course of his employment with Greenville County Club.  Mr. Rash’s first injury occurred in 2009, while his employer was insured by Guard Insurance Group (“Guard”).  Mr. Rash’s second lumbar injury occurred in 2012, at which point his employer was insured by Technology Insurance (“Technology”).  Both injuries, which were each the result of slip and fall accidents, were accepted by the respective insurance carrier at the time.

In 2014, Mr. Rash filed petitions with the Board against both insurers for payment of a lumbar spine surgery and total disability benefits.  Mr. Rash contended his medical condition was caused by the 2009 injury, the 2012 injury, or both.  Following a hearing, the Board determined that Mr. Rash had suffered a recurrence of his 2009 injury as opposed to an aggravation of his 2012 injury.  As such, the Board found Guard, the initial insurer, wholly responsible for Mr. Rash’s medical treatment and additional compensation even after the 2012 accident.

On appeal, Guard alleged the Board had erroneously applied the successive carrier standard of review.  Guard argued that the burden of liability for Claimant’s lumbar spine condition, shifted wholly to Technology, when Technology accepted the 2012 injury as a new injury.  The Court rejected Guard’s argument, holding that a successive insurer is not strictly liable for a claimant’s condition that comes about after a second accident.  R ather, the successive carrier’s liability depends upon whether or not a subsequent work accident is causally related to a claimant’s condition.  Where Guard’s argument fell short, according to the Court, was failing to take into account the requirement to prove the causal relationship between Mr. Rash’s 2012 accident and his later condition.  The Court affirmed the Board’s decision, finding there was substantial evidence to support that Mr. Rash’s condition was caused by the 2009 injury and that Guard had failed to meet its burden of proving that it was caused by the 2012 accident.

As Greenville County Club makes clear, a successive insurance carrier’s acceptance of a second injury does not necessarily impute liability upon that insurer where there is an initial insurer responsible for a first injury.

“Zone of Danger” Does Not Apply to Longshore Claims

/in /by “Zone of Danger” Does Not Apply to Longshore Claims

In Ceres Marine Terminals v. Jackson, No. 15-1041 (4th Cir. Jan. 27, 2017), the Fourth Circuit declined to extend the “zone of danger” concept to claims arising under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”).

The claimant was operating a forklift on a pier in Virginia when he accidentally struck and killed a co-worker.  He filed concurrent claims under LHWCA and the Virginia workers’ compensation statutory scheme, alleging psychological injury from the occurrence.

With respect to the LHWCA claim, the employer took the position that the claim should be denied because the claimant was not in the “zone of danger,” first stated in Consolidated Rail Corp. v. Gottshall, 512 U.S. 532 (1994).  The “zone of danger” theory holds that the claimant could only recover for emotional injury caused by fear of physical injury to himself.  As the claimant was unlikely to be injured by the forklift, the employer alleged the claim should be barred.  The Administrative Law Judge and the Benefits Review Board both rejected this theory, in turn, and held that the claimant had a viable claim under the LHWCA.

The Fourth Circuit agreed with the Benefits Review Board and held that the Longshore statute, on its face, only spoke to an “injury,” and did not differentiate between psychological and physical injuries.  As such, the court indicated that it could not construe the statute to limit recovery for psychological injuries when there was no imminent physical harm.  The court also rejected the applicability of Consolidated Rail to Longshore cases, as Consolidated Rail involved interpretation of the Federal Employers Liability Act (“FELA”).  FELA is, by definition, a negligence statute rather than a workers’ compensation statute, and the court was unwilling to engraft the negligence concept of a “zone of danger” on a no-fault workers’ compensation statute.

Of note, the Virginia Court of Appeals also rejected the “zone of danger” concept under the Virginia state workers’ compensation scheme and has remanded the case for further proceedings to the Virginia Workers’ Compensation Commission.  The injury in this case occurred before July 1, 2012, which was the date upon which the Virginia legislature adopted a statute denying concurrent jurisdiction for Longshore workers.  For injuries arising prior to that date, workers, like the claimant here, could avail themselves of both the Longshore and Virginia workers’ compensation systems.

For more information about this article, please contact Angela Garcia Kozlowski at 410.230.1084 or akozlowski@fandpnet.com.

Virginia to Implement Medical Fee Schedules Commencing January 1, 2018

/in /by Virginia to Implement Medical Fee Schedules Commencing January 1, 2018

The 2016 regular session of the Virginia General Assembly delivered a major change for the future of medical payments under the Workers’ Compensation Act.  On March 7, 2016, Governor McAuliffe signed a bill to implement a medical fee schedule to commence on January 1, 2018.  This law is not retroactive; therefore, only dates of medical service after January 1, 2018 will be subject to the fee schedule.

Currently, there are no medical fee schedules for workers’ compensation treatment in Virginia, which creates uncertainty because different health providers charge different amounts for the same service. If a provider challenges the amount paid for treatment by the carrier, it will initiate a “medical provider application” with the Virginia Workers’ Compensation Commission (“Commission”).

A medical provider application initiates litigation regarding the billed charges, and these claims are often costly to defend. Generally, defenses to medical provider applications include (1) the “prevailing rate” in the community or (2) the contract. If the defense raised is the “prevailing rate” in the community, litigation expenses can include hiring an expert witness, obtaining CPT code data, and attorney’s fees. As such, the legislature sought to streamline medical billing as it relates to workers’ compensation.

Pursuant to the new legislation, there will be seven categories for payment by provider types and rates will vary depending on geographic communities.  These provider type categories include: physicians, surgeons, type one teaching hospitals, other hospitals, ambulatory surgical centers, other outpatient medical service providers, and purveyors of miscellaneous items and any other providers. Additionally, employers and insurers continue to be able to enter into contracts, which allow them to pay more than or less than the amounts set by the fee schedule.  Notably, special provisions of the law apply to traumatic injuries or serious burn injuries.  “Traumatic injury” has a specific definition, which includes medically necessary treatment at a Level I or Level II trauma center.

According to the Commission’s website, from April 10 to May 10, 2017, the public may review and provide comments to the Medical Fee Schedule Regulatory Advisory Panel regarding the proposed fee schedules and rules.  A public hearing is scheduled for May 23, 2017.  After implementation, the Commission is required to review the fee schedules following the first year, and biennially thereafter.  The Commission is also required to provide public access to information regarding the fee schedules by provider type and geographic communities.

s the law is not retroactive, expect that the service providers will continue to utilize medical provider applications that are filed with the Commission for fee disputes for dates of service prior to January 1, 2018.  The specific code sections affected by the bill include Va. Code §§ 2.2-4006, 65.2-605, 65.2-605.1, and 65.2-714.  For more information and a timeline of the project, please visit http://vwc.state.va.us.

F&P Case Victory

/in /by F&P Case Victory

Franklin & Prokopik’s April Kerns recently defended against a claimant’s appeal in the Prince George’s County Circuit Court.  The claimant appealed a decision of the Maryland Workers’ Compensation Commission which found he had not sustained any increase in his permanent partial disability since a prior award.

After a 2003 accident, the claimant had undergone spinal surgery and implantation of a spinal cord stimulator for which he was awarded 65% permanent partial disability in 2010.  The claimant went on to receive injections, radiofrequency ablations, and medication management following the 2010 award.  This complex claim also involved questions of opioid abuse, illicit drug use, and international travel.

During the two-day jury trial, the claimant introduced expert testimony which suggested his permanent partial disability had increased.  The claimant himself testified, over objection, that he was now permanently totally disabled, although there was no medical opinion provided to support this contention.  Relying upon testimony from the employer and insurer’s medical expert, the jury agreed the claimant was not only not permanently and totally disabled, but also that his permanent disability had not at all worsened since the Commission’s prior permanency award.

For more information about this article, please contact Melissa A. McGaunn at 410.230.3062 or mmcgaunn@fandpnet.com.

MD’s Highest Court Weighs in on the Effect of a Subsequent Intervening Accident

/in /by MD’s Highest Court Weighs in on the Effect of a Subsequent Intervening Accident

In Electrical General Corp. v. Labonte, 229 Md.App. 187 (2016), a case discussed in the winter 2017 issue of Franklin & Prokopik’s First Report, the Maryland Court of Special Appeals provided additional guidance regarding the effect of a subsequent intervening accident on a claimant’s entitlement to workers’ compensation disability benefits. There, the state’s intermediate appellate court affirmed a decision of the lower court to overturn a decision of the Maryland Workers’ Compensation Commission, which denied a claimant additional permanent disability benefits. More recently in July 2017, the Court of Appeals, Maryland’s highest court, affirmed the Court of Special Appeals. Specifically, the high Court held a subsequent intervening event does not necessarily preclude an award of increased permanent partial disability benefits.

On September 2, 2004, Michael Labonte sustained a compensable work-related back injury and received medical and indemnity benefits from his employer, Electric General Corporation. On December 31, 2006, Mr. Labonte reinjured his back during an altercation with a police officer outside the scope of his employment. Mr. Labonte subsequently received an Award of permanent disability benefits in 2007. The Commission found Mr. Labonte had sustained 30% permanent disability to his back, with 20% attributable to the 2004 work accident and 10% attributable to pre-existing and subsequent conditions. When Mr. Labonte returned to the Commission in 2012 seeking additional benefits for an alleged increase in permanent partial disability due to his back condition, the Commission found no increased disability related to the 2004 work accident. On appeal, a jury reversed the Commission’s decision and found Mr. Labonte’s back complaints were related to his work injury. The jury awarded Mr. Labonte both increased permanency benefits as well as medical treatment and expenses. As noted above, following an appeal to the Court of Special Appeals, that court then affirmed the jury’s decision. The Court of Appeals granted Electric General’s petition for certiorari in December 2016.

Before the Court of Appeals, Electric General reiterated arguments made previously, namely that when the Commission makes a finding of disability due in part to a subsequent intervening injury (such as the Commission’s 2007 permanency award with apportionment for Mr. Labonte’s 2006 back injury), the employer and insurer are no longer liable for benefits or treatment. Electric General relied, in part, on Martin v. Allegany County Bd. of County Com’rs, 73 Md.App. 695 (1988), wherein the court shifted the liability for temporary total disability benefits from one employer to another where the claimant had an intervening accident with the second employer. Ultimately in Martin, the Court of Appeals held it is the final accident contributing to the disability which provides the basis for liability for temporary total disability benefits.

Rather than relying on Martin, the Court of Appeals in Labonte looked to its decision in Reeves Motor Co. v. Reeves, 204 Md. 576 (1954). In Reeves, the Court of Appeals reversed an award for permanent partial disability benefits because a subsequent surgery broke the causal connection between the work incident and the permanent partial disability. In that case, the Court reasoned it was proper to deny permanent partial disability benefits, given there was no evidence that the ongoing disability remained causally related to the work injury. Accordingly, the Labonte Court applied Reeves and reasoned that permanent partial disability is possible despite an intervening event, so long as there is evidence that at least some permanent partial disability remains causally related to the work injury. Any permanent partial disability that is unrelated to the work injury would not be the responsibility of the employer and insurer.

Labonte suggests a claimant’s subsequent injury does not preclude an employer and insurer from all liability, at least where permanent partial disability benefits are involved. As a practical matter, however, the Commission may still weigh the severity of the subsequent injury and the nature of the treatment involved when apportioning an award of permanent disability. Additionally, Martin still provides clear authority that where a subsequent injury is the basis for at least part of a claimant’s disability, there may be no further liability for temporary total disability benefits.

For more information about this article, please contact John Archibald at 410.230.3064 or jarchibald@fandpnet.com.

To Appeal or Not to Appeal? Relevant Considerations When Faced With an Unfavorable Commission Decision

/in /by To Appeal or Not to Appeal? Relevant Considerations When Faced With an Unfavorable Commission Decision

There are times when an award of compensation or order issued by the Maryland Workers’ Compensation Commission is unfavorable or seemingly unfair, leading an employer or insurer to consider filing a petition for judicial review. However, an appeal of an adverse decision does not always result in a significant benefit to the employer and insurer, even if it is successful. How can employers and insurers determine whether the potential benefit of challenging the Commission’s decision warrants the time and costs involved?

There are four main questions which can help guide a decision of whether or not to take an appeal:
1. Is the jurisdiction favorable?

From a strategic standpoint, when deliberating an appeal, it is helpful to examine the potential jurisdiction in which such an action would be filed. How strong is the evidence in your favor versus how sympathetic the claimant is in the jurisdiction covering the appeal? Juries with no experience in workers’ compensation law may respond more strongly to emotion than a Commissioner with a background in interpreting cases through medical diagnoses and records.
2. What are the estimated litigation costs associated with the appeal?

It is important to employ a cost-benefit analysis in the evaluation of any appeal. Expert fees, videographer fees, court reporter fees, and attorney’s fees scale with the complexity of the case, among other factors. Many times these costs can simply outweigh the potential gain—especially when factoring in the risk that a jury does not side with the employer and insurer.
3. What portion of the ordered benefits, if any, will be outstanding by the time the appeal is over?

An appeal is not a stay of the Commission’s decision. Ongoing medical and indemnity benefits must be paid during the pendency of an appeal. Maryland Rule, Labor & Employment § 9-741 does, however, allow employers and insurers to hold in escrow payment of past incurred medical bills and claimant’s attorney’s fees when an appeal is filed. Even if a judge or jury overturns a Commission Award of ongoing benefits, there is no mechanism to return those benefits. Rather, an employer and insurer are left to pursue any available credit for compensation previously paid against future indemnity benefits.

When considering an appeal, employers and insurers should consider what portion of the ordered benefits will be outstanding by the time a final decision is reached. An ordered period of permanency benefits begins starting on the date following the last compensation paid to a claimant. Thus, when deciding to appeal a permanency award, employers and insurers can generally estimate what portion of benefits will remain unpaid at the time of trial. For a jury trial, courts can vary from eight months to eighteen months from the filing of the appeal to trial. Will the entire award be paid (and only reimbursable via credit) at the time of trial or will a favorable result yield an immediate savings through the termination of ongoing benefits? Given the ongoing benefits typically associated with awards of serious disability or permanent total disability, challenging these types of decisions may be more worthwhile, particularly where the Commission has awarded minimal serious disability benefits.

4. What bearing does the Commission’s decision have on the continued exposure of the claim?
In evaluating a potential appeal, consideration should be given to the effect of the Commission’s decision on the future value of the claim. For example, does the decision at issue open the door to a future of extensive care, multiple surgeries, and potentially serious disability? Or, does the decision merely represent a disagreement of a few percentages on a first or second tier permanency award?

When it comes to an order authorizing medical treatment, claimants will typically have undergone any ordered treatment by the time of trial. For this reason, the issue of future exposure tends to be more relevant than the cost of treatment. A spinal surgery, ongoing head injury treatment, or other treatment to a complex system is more likely to lead to a great deal of future exposure than physical therapy for a sprain/strain or a carpal tunnel release surgery. It would typically be more reasonable to appeal the type of treatment for the former category than the latter.

For more information about this article, please contact April Kerns at 410.230.2975 or akerns@fandpnet.com.