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
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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.

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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.

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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.

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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]

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