View From the Bench

Workers’ Comp Docket

Significant workers' comp legal decisions from around the country.
By: | May 6, 2016

Baggie With Meth Residue Doesn’t Curb Driver’s Claim

Department of Labor and Industries v. Rowley, No. 91357-9 (Wash. 03/17/16)

Ruling: The Washington Supreme Court held that a driver was entitled to benefits because the Department of Labor and Industries failed to establish that he was injured while committing a felony.

What it means: In Washington, when the Department of Labor and Industries denies benefits under a law barring benefits to a worker who was committing a felony at the time of the injury, the department bears the burden of proving the commission or attempt of a felony.

Summary: A truck driver was severely injured when his truck veered off a highway overpass and landed on the roadway below. Suspecting that drug use might have been a contributing factor, law enforcement sent a trained drug recognition officer to the hospital where the driver was treated after the accident. An emergency room nurse provided the officer with a “baggie” that she said had come from the driver’s pocket.

Advertisement




The officer stated that hospital staff had washed the contents of the baggie down the sink before he arrived at the hospital. The officer also stated that the nurse who found the baggie in the trash for him was not the staff member who had discovered the baggie. The baggie contained residue that the officer believed to be methamphetamine. The driver sought workers’ compensation benefits.

The Department of Labor and Industries denied his claim, finding that it was barred because the injury occurred while he was committing a felony. The Washington Supreme Court held that the driver was entitled to benefits.

The court held that when the department denies benefits under the felony payment bar it bears the burden of proving the commission or attempt of a felony. The court explained that common sense dictated that a worker should not be required to prove the non-commission of a felony to obtain benefits.

Here, the court found that the department did not meet its burden. The only felony alleged was possession of a controlled substance. The court explained that in a criminal context, evidence of intoxication may support a finding of prior possession but only when it is combined with other corroborating evidence.

The court found that the evidence of the baggie from which alleged methamphetamine had been allegedly dumped in the sink and recovered in the trash in a room down the hall from where the driver was treated did not establish that the driver possessed methamphetamine when his truck left the highway.

Wrestling Horseplay Topples Compensability for Stroke

Palardy v. Sunset Station/Station Casinos, Inc., No. 65504 (Nev. Ct. App. 03/16/16)

Ruling: The Nevada Court of Appeals held that a chef’s injury that occurred when he engaged in horseplay was not compensable.

What it means: In Nevada, a worker is not entitled to compensation when his injury is not fairly traceable to the nature of his employment or the workplace environment.

Summary: An executive chef for the Sunset Station Hotel and Casino was conducting a business meeting in his office with two employees. He claimed that he was sitting at his desk when one of the employees came around the desk and placed him in a headlock for no apparent reason.

The two employees claimed that during the meeting the chef made a remark about the Marine Corps, and one of the employees, who was a former member, retorted, and he and the chef started pushing each other. The employees said the chef “lunged” at him, so he placed the chef in a headlock.

Three days after the incident, the chef suffered a stroke while running. He sought workers’ compensation benefits. The Nevada Court of Appeals held that he was not entitled to benefits.

The court found that the chef’s injury was caused by the horseplay. His medical records showed that his stroke was caused by a traumatic injury to his right internal carotid artery. His doctor concluded that the likely cause of the injury was the chef’s “wrestling” activity. There was no evidence that the chef’s stroke was caused by any preexisting condition or that another activity could have caused the internal carotid artery dissection.

The court also concluded that the chef’s injury did not arise out of and in the course of his employment. The fact that the chef was required to work long hours and participate in meetings did not support a conclusion that his employment increased his risk of injury from wrestling horseplay.

The court found that the injury was not compensable because it was not fairly traceable to the nature of the chef’s employment or the workplace environment.

Pharmacists Are Considered Medical Providers Under Workers’ Comp Law

Steel Creations, et al. v. Injured Workers’ Pharmacy, et al., No. 2015-CA-000218-WC, 2015-CA-000392-WC, 2015-CA-000422-WC (Ky. Ct. App. 03/25/16)

Ruling: The Kentucky Court of Appeals held that a pharmacy is a medical provider under the workers’ compensation law and that commercially published average wholesale prices are permitted in the fee schedule and reimbursement system.

What it means: In Kentucky, a pharmacy is a medical provider under the workers’ compensation law.

Summary: The Kentucky Employer’s Safety Association paid for medical care related to work-related injuries on behalf of its member employers. KESA had an arrangement with a company that negotiated with pharmacy benefits managers to secure prices and terms with various pharmacies.

Advertisement




The Injured Workers’ Pharmacy provided some of the prescription drugs used by workers injured by KESA. IWP refused to accept price adjustments since it prices its prescription drugs based on commercially published average wholesale prices. KESA initiated medical fee disputes when it refused to pay IWP’s prices.

KESA argued that it should be able to choose the pharmacies at which members’ workers could fill their prescriptions because pharmacies are not medical providers under the workers’ compensation law.

The Kentucky Court of Appeals held that a pharmacy is a medical provider under the workers’ compensation law and that a commercially published AWP is permitted in the fee schedule and reimbursement system.

The court found that medical providers provide medical services. Since the practice of pharmacy required expertise in the provision, administration, and interaction of prescription medicines in the treatment of injury and disease, a pharmacist was a medical provider. Therefore, an injured worker’s right to choose his own medical provider extends to his selection of a pharmacy.

The court also found that the use of the actual average wholesale price of a drug as the fee schedule for pharmacy reimbursements under the workers’ compensation system is fair, current, and reasonable. IWP was never paid in excess of AWP prices plus a $5 dispensing fee.

The fact that KESA could obtain a cheaper price by working with pharmacy benefits managers did not necessitate a conclusion that IWP’s prices were not representative of the average wholesale price.

Filing Fees Designed to Prevent Abuse Don’t Violate Constitution

Chorn, et al. v. Workers’ Compensation Appeals Board, et al., No. B264440 (Cal. Ct. App. 03/28/16)

Ruling: The California Court of Appeal held that the workers’ compensation law that imposes a filing fee on medical liens did not violate the state constitution.

What it means: In California, the workers’ compensation law that imposes a filing fee on certain medical liens is constitutional.

Summary: In California, medical providers submit itemized bills to the employer or its insurer, which generally has 60 days after receipt to pay. If the employer or insurer contests a bill, the employer or insurer is not required to pay it until ordered to do so by the Workers’ Compensation Appeals Board.

A medical provider can file a lien claim for the costs of his services directly with the board. A doctor, who provided services to injured workers, and three injured workers alleged that the law imposing a $150 filing fee on certain medical liens filed in workers’ compensation cases violated the California Constitution. The California Court of Appeal held that the law was constitutional.

The court concluded that the injured workers did not have standing to bring a claim. The court found that the workers did not submit any evidence of their alleged injuries beyond the bare assertion that they were denied medical care as a result of the law.

The court found that the doctor’s arguments failed. He argued that the filing fee burdened medical providers and resulted in an inability for workers to receive necessary medical care. He also argued that the filing fees took away the right to enforce medical accounts receivable.

The court pointed out that the legislative history showed that the legislature enacted the law to “provide a disincentive to file frivolous liens.”

The court also found that the lien filing fee was a valid restriction on the right to petition. The fee was designed to prevent abuse of the right to petition.

The court concluded that the filing fee did not violate due process. The court pointed out that liens are not the only means by which medical providers can receive payment. Medical providers can also settle their bills outside of the legal system. The court pointed out that lien claimants must pay to file a lien but recoup their filing fees if they ultimately prevail.

The court also found that the filing fee did not violate equal protection, as the legislature’s decision to target the problem of lien abuse was rationally related to a legitimate policy goal.

Show-off Stunt Bars Comp Coverage

Thompson v. Triopia C.U.S.D. No. 27, 24 ILWCLB 23 (Ill. W.C. Comm. 2015)

Ruling: The Illinois Workers’ Compensation Commission denied benefits to a teacher for a torn Achilles tendon because the injury was the result of a personal risk not connected with or incidental to his employment duties.

What it means: In Illinois, a worker’s injury is not compensable when it was horseplay rather than a risk incidental to the employment.

Summary: A physical education teacher for middle and high school students was waiting outside the locker room for his students when one of the students ran up the wall and jumped. The teacher informed the students that he could accomplish that same “Bo Jackson move,” and the students challenged him.

Advertisement




On his second attempt, the teacher felt a pop in his ankle. He fell to the ground and was taken to the hospital, where he was diagnosed with a torn Achilles tendon. The teacher testified that he liked to challenge his students and wanted to be a physical fitness role model for them. He further testified that it was not unusual for him to participate in activities with the students, and it did not violate any school policies.

The school principal testified that the teacher’s maneuver did not violate a district rule or policy, and it could “link up with his goals” of building rapport and motivating students, but it was not an activity he would recommend. In denying benefits, the arbitrator explained that the claimant’s injury did not arise out his employment but rather was the result of actions personal to him. The commission affirmed and adopted the decision of the arbitrator.

The activity of running up a wall was initiated by the students and not by the teacher, which suggested that the activity was not incidental to his employment. Also, the teacher controlled the curriculum of his classroom, and he acknowledged that running up a wall was not part of the daily curriculum.

Furthermore, the teacher’s injury occurred when he ran up the wall the second time after he was challenged by his students to go higher. The arbitrator found that performing such a maneuver at the coaxing of the students was indicative of horseplay rather than a risk incidental to his employment and suggested that the teacher engaged in the activity for solely personal reasons.

Because the mechanism of injury was from an activity not performed at the teacher’s instruction or at his initiation and was outside the curriculum, the arbitrator found the teacher exposed himself to a risk outside the exercise of any of his duties.

Implied Contract of Hire Bars Lawsuit From Temporary Employee

Freeman v. SONA BLW Precision Forge, Inc., No. COA15-1015 (N.C. Ct. App. 03/15/16, unpublished)

Ruling: In an unpublished decision, the North Carolina Court of Appeals held that a worker’s suit was barred by the exclusive remedy provision of the workers’ compensation law.

What it means: In North Carolina, an implied contract of hire exists between a worker and the special employer where the worker accepts the assignment from the temporary employment agency and performs the work at the direction and under the supervision of the special employer.

Summary: SONA BLW Precision Forge, a manufacturer of car components, contracted with Mega Force Staffing Services to place temporary workers in particular positions. SONA would pay each contract worker’s wages plus 27 percent to Mega Force.

Mega Force would then pay the workers and use the extra funds for administrative costs, including the purchase of workers’ compensation insurance. A worker applied for contract employment at Mega Force with the hope of being assigned to a position with SONA. Mega Force submitted the worker’s resume to SONA, and a SONA supervisor selected him for temporary employment.

When the worker reported to work, SONA employees instructed him in the operation and use of cold coining machines. Each day, the worker reported to a SONA supervisor, who gave him his assignments for the day. As the worker was operating a cold coining press at SONA’s plant, his hand was crushed between two press portions of the machine, resulting in amputation and other serious injuries. The worker sued SONA.

The North Carolina Court of Appeals held that the worker was an employee of SONA, as well as Mega Force, so his suit was barred by the exclusive remedy provision of the workers’ compensation law.

The court applied the special employment doctrine and found that the worker was an employee of SONA. The parties did not dispute that the worker was performing the work of SONA when he was injured and that SONA exercised control over the details of his work.

Advertisement




The parties disputed whether an implied contract of hire existed between the worker and SONA. The court explained that an implied contract of hire exists between a worker and the special employer where the worker accepts the assignment from the temporary employment agency and performs the worker at the direction and under the supervision of the special employer.

Here, the worker accepted the assignment to do work at and under the direction of SONA. Also, the contract between Mega Force and SONA provided that SONA would pay Mega Force for the worker’s work and obligated Mega Force to compensate the worker. The court found that an implied contract existed.

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]

More from Risk & Insurance

More from Risk & Insurance

Risk Matrix: Presented by Liberty Mutual Insurance

11 Crucial Trends That Are Impacting the Construction Industry Today

Increased hurricanes, opioids, women workers and more are just some of the latest trends driving construction risk.
By: | November 1, 2019




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