View From the Bench

Workers’ Comp Docket

Significant workers' comp legal decisions from around the country.
By: | February 6, 2015

Worker Wins Interest on Amount Withheld for Long-Term Disability Overpayment

Luna v. Industrial Commission of Arizona, No. 2 CA-IC 2013-0021 (Ariz. Ct. App. 12/22/14)

Ruling: The Arizona Court of Appeals held that a worker was entitled to interest on temporary compensation benefits that were not timely paid to him.

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What it means: In Arizona, interest accrues when there is a legal indebtedness or other obligation to pay benefits and there is notice of the obligation to pay.

Summary: A worker for Pima County Wastewater Management suffered a compensable injury to his back. The employer’s insurer, Tristar Risk Management, accepted the claim. Later, Tristar closed the claim. The worker protested the closure of the claim and an administrative law judge found he was entitled to temporary disability compensation. During the period the worker was contesting Tristar’s closure of his claim, he received long-term disability benefits through the state retirement system from Sedgwick Claims Management Services. Tristar withheld the majority of the temporary compensation benefits it owed the worker to reimburse Sedgwick. The parties agreed that Tristar would pay the worker the amounts that were withheld for reimbursement to Sedgwick and that the worker would pay back the amounts owed to Sedgwick due to overpayment. The worker sought interest on the amount that was to be reimbursed to Sedgwick. The Arizona Court of Appeals held that he was entitled to interest.

The court found that the temporary benefits were “susceptible to mathematical computation,” so they were liquidated. Also, the benefits constituted a legal indebtedness or other obligation to pay upon the ALJ’s award. The court found that Tristar had notice of its continuing obligation to pay when the worker contested the closure of his claim. Tristar did not pay the benefits until more than two years later. Therefore, the court found that the benefits were not timely paid, and interest began to accrue from the time that Tristar received notice that the worker contested the closure.

Tristar asserted that interest was not payable on the benefits it withheld to repay Sedgwick. The court disagreed, finding the fact that Tristar withheld funds to reimburse Sedgwick directly for overpayment of long-term disability benefits did not affect the court’s analysis. The court explained that public policy considerations supported its conclusion.

Armed Robbery of Liquor Store Qualifies as Abnormal Working Condition

Pennsylvania Liquor Control Board v. WCAB (Kochanowicz), 760 C.D. 2010 (Pa. Commw. Ct. 12/30/14)

Ruling: The Pennsylvania Commonwealth Court awarded benefits to a liquor store manager for the psychic injuries he sustained when he was the subject of an armed robbery at the liquor store.

What it means: In Pennsylvania, where the incident that causes the claimant’s PTSD is “a singular extraordinary event” for this particular claimant, that incident is an abnormal working condition. Furthermore, an abnormal working condition need not be a unique working condition. In this case, the fact that the claimant had received workplace violence training at work, and liquor stores are often robbed, was not dispositive of whether the armed robbery experienced by the claimant was a normal working condition.

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Summary: The claimant was a general manager of a liquor store. He alleged that he sustained post-traumatic stress disorder as a result of being robbed at gun point while working at the store. The Commonwealth Court ruled that the manager could not collect workers’ compensation benefits because he had not been subjected to abnormal working conditions. The court reasoned that robberies were a normal condition of retail liquor store employment.

On appeal, the Pennsylvania Supreme Court vacated the order and remanded to the court for reconsideration. The Supreme Court noted evidence that the manager’s mental injury arose from “a singular, extraordinary event occurring during [his] work shift” and that this supported the conclusion that his injury stemmed from an abnormal working condition.

On remand, the Commonwealth Court awarded benefits to the manager. The court noted that although the manager received workplace violence training at work, such training was not dispositive of whether the armed robbery experienced was a normal working condition. The court also pointed out that the manager had never experienced a robbery in the more than 30 years he worked for the store. Because the incident that caused the manager’s PTSD was “a singular extraordinary event” for him, the incident was an abnormal working condition and he was entitled to benefits.

Claim Timely Filed Before Employer’s Last Payment of Comp in Other State

Clark v. Summit Contractors Group, Inc., No. COA14-698 (N.C. Ct. App. 12/31/14)

Ruling: The North Carolina Court of Appeals held that a superintendent timely filed his claim.

What it means: In North Carolina, a worker’s claim is timely filed if it is filed within two years after the employer’s last payment of “medical compensation” regardless of where the medical treatment occurred and whether the payment was ordered as a result of a pending workers’ compensation claim in the state.

Summary: A construction superintendent, who resided in Florida, worked for Summit Contractors Group, a Florida company doing business in North Carolina. While supervising the construction of apartment complexes in North Carolina, the superintendent injured his shoulder. He received indemnity benefits for his injury under Florida law. More than two years after he was injured, the superintendent filed a workers’ compensation claim in North Carolina. Summit asserted that his claim was not timely filed. The North Carolina Court of Appeals held that the claim was timely.

Under a statute, a claim is timely if it is filed within two years after the last payment of medical compensation when no other compensation was paid and the employer’s liability was not established. Here, the court found that Summit’s liability had not been established because it had not been held liable for the superintendent’s injuries pursuant to a North Carolina workers’ compensation claim.

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The court found no basis for Summit’s argument that “medical compensation” only included payments made in a North Carolina workers’ compensation claim. Here, Summit paid the superintendent’s out-of-state medical expenses pursuant to his Florida workers’ compensation claim months after he filed his North Carolina claim. Also, since the benefits he received in Florida were not made payable to him under the North Carolina workers’ compensation law, they did not qualify as “compensation” or “other compensation.”

Funeral Director’s Letter Isn’t Voluntary Resignation

Collier v. McEvoy Funeral Home, Inc., et al., No. W2014-00061-SC-R3-WC (Tenn. 12/29/14)

Ruling: The Tennessee Supreme Court held that a director was entitled to benefits in excess of the one and one-half times impairment cap.

What it means: In Tennessee, if a worker voluntarily resigns from a preinjury employer based on a reasonable and substantiated belief that he will be unable to perform the job required upon return to the workplace, worker has acted reasonably for purposes of the statutory caps.

Summary: A funeral director for McEvoy Funeral Home sustained injuries to his shoulder and back while assisting with carrying a casket. He did not report the injury to the funeral home. Within a few days of the injury, he submitted a letter of resignation to the funeral home owner. The director stated that his intention was to get the owner’s attention about his physical health and to not do shift work. The director sought permanent disability benefits. The funeral home asserted that his injury was subject to the one and one-half times impairment cap because of his voluntary resignation. The Tennessee Supreme Court held that he was entitled to benefits in excess of the cap.

The funeral home argued that the director’s letter explicitly stated that it was a letter of resignation, it made no mention of the injury, he did not request lighter-duty work, and he had not reported the injury to anyone other than his wife. The court concluded that the director did not voluntarily resign. The trial court had accepted the director’s statement that he did not actually intend to resign and that he advised the owner of the work injury.

The court also found that the funeral home was not entitled to a credit for temporary total disability payments it made to the director.

Failure to Tell Employer About Injuries Blocks Custodian’s Repetitive Trauma Case

Bennett v. Putnam Northern Westchester Boces, No. 518662 (N.Y. App. Div. 12/31/14)

Ruling: The New York Supreme Court, Appellate Division ruled that a school custodian did not give timely notice of injuries to his elbows and knees that were allegedly due to work-related repetitive trauma. Therefore, the custodian was not entitled to benefits.

What it means: While a delay in providing notice of injury to an employer may be excused under certain circumstances, such excuse is not automatic.

Summary: The claimant worked as a school custodian for 15 years. In 2008, he began to experience problems with his elbows and knees, and sought medical treatment. He ended up having surgery on both elbows and both knees. In September 2009, he filed a claim for workers’ compensation benefits based upon injuries to his bilateral elbows and left knee attributable to “repetitive use of physical labor going up and down the stairs, lifting heavy boxes, [and] shoveling snow.”

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New York law requires a claimant seeking workers’ compensation benefits to provide the employer with notice of the claim within 30 days of sustaining a compensable injury. The failure to give timely notice may be excused where “notice could not be given, the employer or its agent had knowledge of the accident, or the employer was not prejudiced.” The employer argued that the custodian was blocked from receiving benefits because he did not provide timely notice of his injuries.

The court noted that the custodian’s injuries occurred over the course of many years and were not the result of a single accidental event. Notably, he first saw an orthopedist and sought medical treatment for his elbow and knee problems in March 2008. He had surgeries to his right elbow in July 2008, his left elbow in June 2009, his left knee in August 2009, and his right knee in May 2010. Although he knew his problems were related to the type of work he performed, he did not inform his employer that his injuries were work related while he was undergoing treatment. Indeed, the court noted, it was not until September 2009, when the custodian filed his claim, that the employer was put on notice.

Given the substantial lapse of time between injury, treatment, and notice, the court found no reason to excuse the delay in notice. The court concluded that the custodian was barred from receiving benefits.

Worker Entitled to Second Period of Training-Related Benefits

Intel Corp. v. Batchler, No. A152263 (Or. Ct. App. 12/24/14)

Ruling: The Oregon Court of Appeals held that a worker was entitled to a new period of temporary disability compensation when she began a new vocational training program.

What it means: In Oregon, if a worker becomes eligible to receive training-related temporary disability compensation more than once, the time limitations apply separately to each of those periods of eligibility.

Summary: A worker for Intel had an accepted occupational disease claim for bilateral forearm and hand tenosynovitis. Her claim was closed and she received vocational assistance through an authorized training program. During that 17-month period, Intel paid temporary disability compensation. After the claim was closed, the claims administrator accepted the additional condition of overuse syndrome and tendonitis. Intel authorized a second authorized training program for the worker. Intel did not pay temporary disability compensation while the worker participated in the second authorized training program, contending that she exhausted her statutory eligibility for such benefits during her first authorized training program. The Oregon Court of Appeals held that the worker was entitled to a new period of temporary disability compensation.

One statute states that workers who participate in vocational training are eligible to receive temporary disability compensation. Another sets a maximum period of 16 months for the receipt of such benefits, which can be extended to a maximum of 21 months by the insurer or self-insured employer. The worker argued that the limitation applied to each period of vocational training, while Intel asserted that the limitation applied during the life of a claim.

In concluding that the worker was entitled to training-related temporary disability compensation, the court pointed out that nothing prevents a worker from becoming eligible to receive such compensation more than once. Also, the limits on the payment of training-related temporary disability compensation apply only after a worker becomes eligible for those benefits. The court found that if a worker becomes eligible to receive training-related benefits more than once, the limitations apply separately to each of those periods of eligibility.

Maintenance Worker Fails to Prove Infection Was Contracted at Work

Connolly v. Covanta Energy Corp., No. 518493 (N.Y. App. Div. 12/31/14)

Ruling: The New York Supreme Court, Appellate Division reversed a ruling that a maintenance worker sustained a causally related occupational disease in the form of allergic bronchopulmonary aspergillosis caused by the inhalation of the aspergillus fungus. The worker failed to demonstrate that his contraction of the infection was attributable to a distinctive aspect of his job.

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What it means: Where an injured worker’s respiratory condition is attributable to his exposure to aspergillus fungus, the worker has failed to prove he sustained a causally related occupational disease when the evidence establishes that he could have been exposed to the fungus anywhere at any time and, to the extent the mold may have been present in his work environment, it is not a condition specific to his job.

Summary: For 23 years, the claimant worked at a garbage recycling and energy production facility owned by Covanta Energy Corporation. During this time, he worked as a maintenance mechanic, as well as a maintenance planner, and frequented all areas of the plant, including the boiler house where the garbage was burned and the cooling tower where water was circulated to cool the equipment. In December 2010, the worker coughed up blood and, following a lung biopsy in March 2011, he was diagnosed with allergic bronchopulmonary aspergillosis. This condition developed as a result of his exposure to the aspergillus fungus, a type of mold.

The worker applied for workers’ compensation benefits claiming that he sustained an occupational disease by his inhalation of fungus and mold at work. Covanta argued that the medical evidence did not establish a causal relationship between his condition and his employment. New York law defines an occupational disease as “a disease resulting from the nature of employment and contracted therein.” In order to demonstrate that a condition is compensable as an occupational disease, an injured worker must “establish a recognizable link between his condition and a distinctive feature of his occupation through the submission of competent medical evidence.”

The worker maintained that he was exposed to the aspergillus fungus while working in the facility’s cooling tower, where he observed green plant life growing, and also in the boiler house, where there was decomposing garbage. His treating pulmonologist opined that his respiratory condition was causally related to his exposure to the aspergillus fungus at work. The doctor acknowledged, however, that the aspergillus fungus is a common source of pulmonary problems and can be found almost anywhere and, further, that he was unable to pinpoint exactly where or when the worker’s exposure occurred, or that it was definitely at Covanta’s plant.

In contrast, a pulmonary specialist who conducted an independent medical examination based upon a review of the worker’s medical records opined that his respiratory condition was not causally related to his employment. Because the aspergillus fungus is ubiquitous and is found in soil everywhere, the IME doctor testified, the worker could have been exposed in an industrial setting or at home in his own backyard. The IME doctor further indicated that it could not be determined exactly when the worker was exposed or, given his clinical history, the date of onset of the disease.

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The court concluded that the worker did not demonstrate that his contraction of allergic bronchopulmonary aspergillosis was attributable to a distinctive aspect of his job as a maintenance mechanic or planner. “Given the commonality of the aspergillus fungus, as acknowledged by both medical experts, [the worker] could have been exposed to it anywhere at any time,” the court said. Moreover, to the extent that the mold may have been present in the worker’s work environment, it was not a condition specific to his job. Consequently, the evidence was insufficient to establish that he sustained an occupational disease.

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