View From the Bench

Workers’ Comp Docket

A round-up of significant recent workers' comp legal decisions from around the country.
By: | February 7, 2014 • 10 min read
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Convenience Store Attendant Loses Claim for Injuries From Customer’s Dog

Delgrosso v. Zolten, Inc., 27 MIWCLR 109 (Mich. C.A.C. 2013)

Ruling: The Michigan workers’ compensation commission affirmed the magistrate’s finding that a convenience store attendant’s alleged work injury, sustained when a dog in a car attacked and bit her face several times, did not arise out of and in the course of her employment.

What it means: In Michigan, for an injury to “arise out of” work, the work must be the origin or cause of the injury.


Summary: The commission affirmed the magistrate’s finding that a convenience store attendant’s alleged work injury, sustained when a dog in a car attacked and bit her face several times, did not arise out of and in the course of her employment. The attendant argued that being friendly to the dogs of persons coming into the store was part of her duties to be friendly to customers. Rejecting this argument, the commission found the magistrate properly invoked the “major purpose” test and found that the dog petting activity was undertaken primarily for the attendant’s amusement or satisfaction.

Even if the commission could not sustain the magistrate’s “in the course of” analysis, it would still find the injury not work-related. The attendant’s work was not the origin or cause of the dog bite injuries when she elected to go to the customer’s car to see and pet the dog.

Statutory Employer Not Liable for Casual Employee’s Benefits

Stringer v. William Bryan Robinson, d/b/a Teton Physical Therapy, P.A., No. 40087 (Idaho 11/27/13)

Ruling: The Idaho Supreme Court held that a statutory employer was not liable for workers’ compensation payments to a carpenter who was a casual employee.

What it means: In Idaho, a statutory employer is not liable for workers’ compensation payments when the injured worker’s employment falls within the casual employment exemption from workers’ compensation coverage.

Summary: A physical therapist hired a general contractor to remodel his physical therapy clinic. The contractor hired a carpenter. The carpenter provided his own tool bag and hand tools while the contractor provided all other tools, materials, and equipment for the job. The carpenter was paid by cash or personal check, and the contractor set his hours and wages. The carpenter worked on the project for 12 days. The ceiling collapsed, and a beam fell on the carpenter, fracturing his ankle. The contractor did not have workers’ compensation coverage. The carpenter sought workers’ compensation from the physical therapist. The Idaho Supreme Court held that the physical therapist was exempt from workers’ compensation liability.

The court explained that if the employment is casual, the employer is not liable for workers’ compensation payments. This applies to statutory employers and direct employers. Here, the parties did not contest that the physical therapist was the carpenter’s statutory employer. Therefore, the physical therapist was liable for benefits unless the carpenter was a casual employee.

The court concluded that the carpenter’s employment was casual. No one expected him to work on the clinic long term. Also, no one expected him to work on the clinic again. His payment was not typical of a permanent or regular employee. Although the physical therapist once expressed dissatisfaction with the carpenter’s work, the contractor maintained primary control over his employment. The court also pointed out that the physical therapist was not in the construction trade.

The carpenter asserted that the casual employment exemption as applied to statutory employers would insulate all statutory employers from workers’ compensation liability. The court said it was not at liberty to eliminate the casual employment exemption.

Widow Secures MSA Account’s Seed Money but Not Annual Payments

Holmes v. Solon Automated Services, No. COA13-325 (N.C. Ct. App. 12/03/13)

Ruling: The North Carolina Court of Appeals held that a worker’s widow was entitled to the seed money the employer agreed to pay to fund the worker’s Medicare set-aside account.

What it means: In North Carolina, a worker’s widow is entitled to the funds remaining in the worker’s Medicare set-aside account, as long as the funds were not contingent on the worker’s survival.

Summary: A worker sustained a compensable work-related injury and received benefits. The parties entered into an agreement to settle the worker’s claim. The employer agreed to pay him $250,000 and fund a Medicare set-aside with $19,582 seed money and $9,247 annually if the worker was living. The worker died unexpectedly before the settlement agreement was completed. The employer refused to pay any sums under the agreement regarding the MSA account to the worker’s widow. The North Carolina Court of Appeals held that the widow was entitled to the seed money from the MSA.


The court said that restitution was a proper remedy for the widow because the Industrial Commission determined that the purpose of the settlement agreement was frustrated. The widow argued that allowing the employer to retain the funds from the MSA would unjustly enrich them at her expense.

The court explained that the agreement provided that the worker would only receive the annual payments if he remained alive. As the worker did not survive, he failed to meet a condition of the contract. The court found that restitution of the annual payments did not apply because the explicit terms of the agreement were not met.

The court rejected the employer’s argument that it was not required to pay the seed money. The court explained that the seed money to fund the MSA had a guaranteed benefit in a specific sum and did not have specific language requiring the worker to survive. The court said that the employer would be unjustly enriched if it were allowed to keep the seed money. The fact that the purpose was frustrated because the money would not be used for the worker’s future medical expenses did not mean that the employer would receive a windfall.

Undocumented Worker Entitled to Healing Period Benefits

Staff Management v. Jimenez, No. 12-1645 (Iowa 11/15/13)

Ruling: The Iowa Supreme Court held that an undocumented worker was entitled to workers’ compensation healing period benefits, except during a period when she was working.

What it means: In Iowa, an undocumented worker is entitled to workers’ compensation healing period benefits, which are benefits payable while a worker is disabled by a compensable injury.

Summary: An undocumented worker for a temporary employment agency worked as a line leader and supervisor. Her work entailed packing shampoo into boxes and placing the boxes on pallets. After she felt abdominal pain, she was diagnosed with two hernias. She returned to work until she underwent surgery. After surgery, the worker continued to have pain. She was terminated because she did not have authorization to work in the United States. Later, a doctor determined that she had another hernia related to the surgical correction of her previous hernias. The worker sought workers’ compensation benefits. The Iowa Supreme Court held that she was entitled to healing period benefits.

The court rejected the employer’s argument that the definition of “employee” under the workers’ compensation law does not include undocumented workers. The legislature did not exclude undocumented workers from its broad definition of employee. Also, the employment contract between the worker and the employer was not void.

The court found that federal law did not preempt an award of healing period benefits. The court explained that the purpose of healing period benefits is to replace lost wages and to award compensation for the disability produced by a physical injury.

The court found that the worker was entitled to healing period benefits from the date of the original injury. A doctor opined that her present condition was related to the original injury. Substantial evidence showed that she was unable to do her prior job due to her injury. When she returned to work, she needed her coworkers to help her perform her prior job.

The court explained that healing period benefits are not payable when a worker returns to work. Therefore, the worker was not entitled to benefits during the time she was working.

A concurring judge noted that a worker’s undocumented status does not entitle her to enhanced benefits. The judge opined that when a worker is unable to accept an offer of suitable work because she does not have the proper paperwork this amounts to a refusal of suitable work.

Report by Doctor Outside Network Is Admissible in Comp Proceeding

Valdez v. Workers’ Compensation Appeals Board, No. S204387 (Cal. 11/14/13)

Ruling: The California Supreme Court held that a medical report prepared by a doctor outside the medical provider network was admissible in a worker’s disability benefits proceeding.


What it means: In California, a medical report prepared by a doctor outside the medical provider network is not precluded in disability benefits proceedings. However, privately retained doctors’ reports cannot be the sole basis of an award for compensation.

Summary: A worker was injured in a fall. She began treatment with a physician in her employer’s medical provider network but was dissatisfied. She sought treatment with a doctor outside the network. She applied for temporary disability benefits, relying on reports by her doctor. The parties disputed whether the doctor’s report was admissible. The California Supreme Court held that the doctor’s report was admissible in the disability benefits proceeding.

A state law regarding medical provider networks states that no other reports are admissible to resolve any controversy arising out of the article. The court concluded that the law restricted the admissibility of medical reports only in proceedings to resolve disputes over diagnosis and treatment within a medical provider network. The court said that reading the section to broadly apply to all compensation proceedings was a “manifest distortion.”

The court explained that the comprehensive medical evaluation process for resolving compensability disputes does not limit the admissibility of medical reports. However, privately retained doctors’ reports cannot be the sole basis of an award for compensation. The court explained that “such reports may provide some basis for an award, but not standing alone.”

The court also pointed out that the legislature did not impose a requirement that medical provider networks must be the exclusive source of diagnosis and treatment for injured workers. Workers are permitted to consult privately retained doctors at their own expense.

Machinist’s Abandonment of Job Market Blocks PTD Benefits

State ex rel. Kelsey Hayes Co. v. Grashel, et al., No. 2012-0032 (Ohio 11/14/13)

Ruling: The Ohio Supreme Court held that a machinist was not entitled to permanent total disability benefits.

What it means: In Ohio, a worker who retires before becoming permanently and totally disabled is precluded from receiving permanent total disability compensation if the retirement was voluntary and constituted an abandonment of the entire job market.

Summary: A machinist received workers’ compensation benefits for hypersensitivity pneumonitis and hypersensitivity-included reactive upper airway disease. He received temporary total disability benefits and then returned to work in the employer’s plant, away from the fumes that aggravated his condition. His symptoms returned, and he stopped working on the advice of his treating physician. Another doctor opined that his condition was related to his history of smoking. The machinist elected to take Social Security retirement benefits. He sought permanent total disability benefits. The Ohio Supreme Court held that he was not entitled to PTD benefits.

The court found that the machinist abandoned the entire job market when he retired. After he stopped working, there was no evidence that he sought other employment. He did not attempt vocational rehabilitation despite statements from his treating physician indicating that he could return to work in an environment away from the fumes that aggravated his condition. The machinist said that he opted to take an early Social Security retirement for financial reasons after his claim for TTD benefits was denied.

The court concluded that the machinist was not disabled by his allowed conditions when he stopped working. Therefore, he voluntarily abandoned the workforce and the entire job market.

A dissenting judge opined that the machinist had not voluntarily abandoned the workforce. The judge said that evidence showed the machinist left the workforce because of increased symptoms related to his work-related conditions.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.


Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.

R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.


We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?


Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.


Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now an where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.


More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]