The Legal Buzz – Lee & Brown Newsletter and Case Law Update July 2018

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on recent developments within our Firm, as well as in the insurance defense community.
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In the News
Emily Miller & Susanna Thomas-Lovric
The Colorado Self-Insured Association (CSIA) held their annual membership luncheon on June 19, 2018. The luncheon featured comedian Nancy Norton as entertainment and provided a chance for all members to wrap up a great year. Lee and Brown, LLC, a professional member of CSIA, was proud to be a sponsor of this year’s luncheon. Attending on behalf of Lee and Brown, LLC were Of Counsel Bradley Hansen and Associate Angela Lavery. CSIA is an association of Colorado employers approved by the State of Colorado to insure their workers’ compensation benefits internally. Members include representatives of self-insured entities in both the public and private sectors as well as other professionals involved in the workers’ compensation system. CSIA’s mission is to educate members, provide networking opportunities, and promote legislative action that maintains a cost-benefit balance. CSIA also promotes the goal of promoting timely and effective programs to return injured employees to work.

 

As a part of the CSIA Legislative Committee, Of Counsel Frank Cavanaugh attended the legislative planning retreat for the remaining 2018 and upcoming 2019 year. The Legislative Committee of the CSIA deals with potential upcoming legislation that may affect CSIA members. In addition, the committee plans the upcoming meetings, including topics of interest to members. The meetings start in September and go through June of the following year. Meeting topics cover a wide range of medical, legal, and claims related subjects. Business entities other than those technically self-insured for workers’ compensation purposes are encouraged to look into membership as those employers share an equal interest in proper functioning of the workers’ compensation system. The upcoming meeting schedule is being finalized and will be available shortly. With elections just around the corner, and the possibility of a change in legislative composition, it is even more important to participate in this organization as the next legislative session could bring change to the workers’ compensation system.

 


Victory Lap

Joseph Gren Denver Attorney In Heien v. DW Crossland, LLC, Member Joseph W. Gren successfully established that Claimant willfully failed to obey a reasonable safety rule adopted by the Employer, entitling Respondents to a reduction of non-medical benefits by 50%. On October 14, 2017, Claimant sustained an amputation injury to his right upper extremity after placing his arm inside a running commercial washing machine. Mr. Gren presented significant evidence that Claimant had been adequately trained in how to properly use the machine and was additionally aware of several safety warnings and the proper safety mechanisms available to stop the machine. Claimant testified that by placing his arm into the running washing machine, he was intentionally violating a safety rule. The ALJ found that Claimant’s activities demonstrated that he deliberately violated the Employer’s safety rule regarding proper operation of the washing machine. Therefore, the ALJ held Respondents were entitled to a 50% reduction in non-medical benefits.

 

John Abraham Denver AttorneyIn Corbishley v. Walmart Associates Incorporated, Member John Abraham, successfully overcame the DIME physician’s opinion that Claimant was not at MMI for her left wrist/thumb and left knee. Claimant sustained an admitted work-related injury to her left knee and bilateral hands when she slipped and fell on a grease spot in a parking lot on July 27, 2014. Claimant ultimately underwent a total knee replacement, a right thumb arthroplasty, a left thumb arthroplasty, and a left thumb revision arthroplasty. Mr. Abraham successfully demonstrated that Claimant’s left knee complaints and issues at the time of the DIME were not a result of the work-related injury but were due to non-claim related osteoarthritis of the left knee and the natural history and progression of the disease. The ALJ found that Claimant would have required a total left knee replacement regardless of whether she fell at work. Specifically, the ALJ credited Respondents’ medical experts over the opinions of Claimant’s expert and the DIME physician in finding that the July 2014 injury did not change, aggravate, or accelerate her significant pre-existing disease process. Regarding the left wrist/thumb injury, Mr. Abraham successfully demonstrated with objective evidence, along with the opinions of Respondents’ medical experts, that the need for further surgery was due to her underlying degenerative disease process, and was not aggravated or accelerated by her work injury. In addition, the ALJ denied maintenance medical benefits, as any need for continued treatment was due to Claimant’s underlying and pre-existing degenerative conditions.

 

In Carl Ross v. US Engineering, W.C. 5-044-829, Of Counsel Sheila Toborg and Associate Evan Thompson successfully defended against Claimant’s request for authorization of left shoulder surgery. Claimant suffered an admitted injury to his left shoulder in January 2017 and a Final Admission was filed in February 2018. Two surgeons opined that Claimant required surgical intervention to repair a torn rotator cuff. At hearing, Ms. Toborg elicited testimony from Respondents’ medical expert that Claimant suffered from end-stage rotator cuff pathology that resulted in massive tearing of the rotator cuff. Respondents’ medical expert also testified that the MRI scan performed 8 weeks after the incident did not demonstrate any evidence of an acute injury or acute acceleration. The ALJ found Respondents’ medical expert’s opinion credible that the work injury did not accelerate Claimant’s pre-existing left shoulder condition beyond its normal rate of progression and it was Claimant’s end-stage rotator cuff pathology which resulted in the need for further surgery, rather than the work-related injury. The ALJ found that Claimant failed to establish by a preponderance of the evidence that the recommended left shoulder surgery was causally related to the January 2017 injury and Claimant’s request for left shoulder superior capsular reconstruction was denied.

 

Of Counsel M. Frances McCracken successfully challenged Claimant’s request for maintenance medical treatment in Grant v. Walmart Associates, Inc. As a result of the work injury, Claimant underwent a left hip arthroplasty and began to experience pain. Claimant sought continuation of pain and sleep medications to address his left hip pain. Ms. McCracken presented evidence from the testimony of two medical experts that opined narcotic pain and sleep medication were neither a reasonable or necessary medical benefit to maintain Claimant’s MMI status. Ms. McCracken successfully demonstrated that the prescribing physician had not maintained a record of Claimant’s functional history nor set forth functional goals. The ALJ noted Claimant did not sign a pain contract. The ALJ cited the testimony of Respondents’ experts and ordered Claimant be weaned off the opiate and sleep medication.

 

Of Counsel M. Frances McCracken also successfully established that Claimant was responsible for his termination in Rollins v. Beco, Inc. Claimant was employed with Employer as a commercial truck driver. On March 14, 2017, Claimant was involved in a serious motor vehicle accident when the semi-tractor he was driving traveled off the right side of Interstate 70, collided with a fence, and subsequently collided with a mountain. Claimant was taken to a local hospital and administered a urinalysis. The results were positive for amphetamines and MDMA. A subsequent search of the tractor-trailer by Claimant’s coworkers uncovered drug paraphernalia. Ms. McCracken presented evidence of the Employer’s “Drug, Alcohol, and Controlled Substances Policy,” that provided for immediate termination upon a resultant positive test revealing the presence of a controlled substance in an employee operating a company vehicle. The ALJ found that the evidence established, more likely than not, that Claimant’s termination was due to the results of a drug urine screen that he completed and due to the drug related paraphernalia found in the tractor-trailer after it was towed back to the Employer’s facility. The ALJ found Claimant responsible for his termination as there was ample evidence that he violated the Employer’s drug policy. Any lost wages after Claimant’s termination were not the result of the industrial injury.

 

Of Counsel M. Frances McCracken also successfully defended a full contest claim in Epperson v. Allied Universal. Claimant alleged that he slipped and fell while walking on a flat top roof on December 8, 2016. Claimant reported both legs twisted inwards and he fell back onto his lower back. Claimant’s reported injuries would ultimately include strain of the cervical, thoracic, and lumbar spine, strain of the bilateral shoulders and bilateral knees, and a closed head injury and possible loss of consciousness. Ms. McCracken successfully demonstrated through substantial medical records that Claimant had inconsistencies in both his hearing testimony and the information he provided to his physicians, including during an IME. Respondents’ medical expert noted Claimant had an inconsistent and normal physical examination, an inconsistent mechanism of injury, and non-physiological findings, together with symptom magnification. The ALJ did not find the Claimant credible as to how he allegedly fell, the alleged symptoms caused by the fall, or the alleged injuries caused by the fall. The ALJ held that Claimant did not suffer an injury that required medical treatment or caused any disability or medical impairment. The claim was denied and dismissed.

 

In Campbell v. Wrangler Well Service, Inc. and New Hampshire Insurance Company & Travelers Indemnity Company, Of Counsel William Sterck successfully established that carrier liability belonged with Travelers and not New Hampshire Insurance Company. The parties stipulated, and the ALJ found, that Respondent New Hampshire’s coverage ended on April 13, 2017 and Respondent Travelers insurance coverage began on the same day. The last injurious exposure for bilateral carpal tunnel syndrome was June 15, 2017, when Travelers was on the risk. Mr. Sterck presented evidence that Claimant’s condition progressed to include additional symptoms,ultimately leading Claimant to seek medical treatment after the change of coverage. The ALJ found that there was a substantial and permanent aggravation of the bilateral carpal tunnel syndrome after the coverage change to Travelers. Specifically, the ALJ credited the opinion of Respondent New Hampshire’s medical expert that attributed the last injurious exposure to Claimant’s work after April 13, 2017. The ALJ held that Respondent Travelers was solely and fully liable for all workers’ compensation benefits, including medical benefits.

 


2018 LEGISLATIVE SUMMARY

The 2018 legislative session wrapped-up about a month ago. There are always bills that have some workers’ compensation implications, or are directly sponsored by workers’ compensation groups. This legislative session was marked by inactivity in the workers’ compensation area, rather than the usual active session. This article will review a few of the things that did not happen before discussing what did. Continue reading this article.

Cases You Should Know

“All In” on Maintenance? Prove It: In Schroeder v. Thorn Emi North America, W.C. No. 3-840-625 (May 7, 2018), Claimant sought review of an Order by the ALJ which denied and dismissed all claims for post-MMI medical maintenance treatment. Respondents filed an admission for maintenance medical care and later obtained an IME opinion that no further medical treatment was causally related to the original industrial injury. Claimant subsequently filed an Application for Hearing, endorsing (among other issues) medical benefits to challenge denial of specific medical treatments. The ALJ found that Claimant had not sustained her burden of proof to establish a right to medical treatment after July 26, 2015, and denied all further care on the basis that Claimant had not proven that the disputed treatment was causally related to the injury. Upon review, ICAO affirmed but modified the ALJ’s Order to reflect that only the specific maintenance medical benefits sought by Claimant, from July 26, 2015 through the date of the ALJ’s Order, were denied. ICAO found that, while Claimant had the burden to prove entitlement to specific medical benefits after MMI (see Snyder v. ICAO, 942 P.2d 1337 (Colo. App. 1997)) Respondents would have the burden to prove that Claimant should not be entitled to all further post-MMI maintenance care. Where Respondents seek to modify an entire award of maintenance care, they bear the burden of proof. § 8-43-201(1), C.R.S.

Moral of the Story: When there is an admission for maintenance care, Claimant has the burden to prove entitlement to a specific treatment if Respondents have denied this treatment. However, if Respondents want to terminate the entire award of maintenance care (i.e. all further care), they bear the burden of proof to show that no further care is reasonable, necessary, or related to the original injury.

 

Treatment Turns on an ATP, not a DIME: In Torres v. City and County of Denver, W.C. No. 4-937-329 (May 15, 2018), Respondents sought to overcome a DIME and review of an ALJ’s Order directing Respondents to authorize a cervical surgery recommended by a DIME physician. The DIME had found that Claimant was not at MMI and that cervical surgery was reasonable, necessary, and related. However, no ATP, within the chain of referrals, had recommended cervical surgery. An ALJ lacks jurisdiction to order an ATP to provide a particular treatment prescribed by an unauthorized provider. See Short v. Property Management of Telluride, W.C. No. 3-100-726 (May 4, 1996). Under W.C.R.P. 11-2(G), a DIME physician is not an authorized provider. ICAO therefore found that the ALJ could not order Respondents to pay for a surgery recommended by a DIME, where no authorized provider had recommended the surgery. ICAO affirmed the ALJ’s Order overcoming the DIME, but modified the Order to reflect that the ALJ only had authority to hold Respondents liable for treatment recommended by an authorized provider.

Moral of the Story: The DIME is not an authorized provider and an ALJ does not have authority to direct Respondents to pay for treatment recommended only by the DIME where there is no support from an ATP within the chain of referrals.

 

Access to DIME = Procedural, Not Medical, Analysis: In Tynnae Fisher v. University of Colorado Health, W.C. No. 5-041-216-01 (June 12, 2018), Respondents sought review of the supplemental Order of the ALJ that authorized the Claimant to request a DIME. Claimant sustained an admitted injury to her cervicothoracic and lumbar regions. After receiving conservative medical treatment, Claimant was placed at MMI by her ATP. Respondents filed a FAL acknowledging that no temporary benefits were owed and admitted for 0% permanent impairment. Claimant disputed the FAL and requested a DIME review. Claimant’s request was stricken at a prehearing conference as the DIME request was deemed premature. Claimant scheduled a hearing to contest the Order of the PALJ. The ALJ reversed the ruling of the PALJ and resolved the Claimant was presently entitled to commence with a DIME review. Respondents appealed the Order, contending it was subject to review as it required Respondents to pay medical benefits associated with the DIME. Upon review, ICAO noted the DIME procedure is not for the purpose of medical treatment. Rather, it “serves as an evidentiary function in the process of litigating disputes.” Ince v. Southwest Memorial Hospital, W.C. No. 4-535-488 (April 19, 2004). The DIME is a function of the litigation process by which each side gathers and presents evidence in support of or in opposition to the claim. Any costs incurred by the respondents in facilitating a DIME review may not be characterized as a requirement to pay a medical benefit. ICAO held that the ALJ’s Order was procedural in nature. As such, the Order was not final and subject to review. Therefore, ICAO affirmed that the issue could not be considered at this time.

Moral of the Story: Any costs respondents incur facilitating the DIME process are part of the procedural litigation process and not medical treatment. The availability of the DIME process is a procedural determination made by the ALJ.

 

Rules Can’t Bend a Statute: In Vazquez Cruz v Lancelot Inc., W.C. No. 5-040-419 (ICAO May 17, 2018), Respondents sought review of an Order awarding Claimant $5,000.00 in disfigurement benefits. Claimant sustained an admitted work place facial burn injury. Claimant was placed at MMI and Respondents filed a FAL on April 13, 2018. On July 10, 2018, Claimant filed an Application for Hearing for disfigurement benefits. Respondents moved to strike the Application for Hearing pursuant to C.R.S. § 8-43-203 contending the Application was barred, as it was filed more than 30 days subsequent to the FAL. C.R.S. § 8-43-203 states that a case will be automatically closed as to the issues admitted in the FAL if Claimant does not, within 30 days, contest the FAL in writing. The Claimant contended that Rule 10 of the Office of Administrative Courts Procedural Rules for Workers’ Compensation Hearings allows for an extended period within which a Claimant may pursue an award for disfigurement. Rule 10 states that an Application for Hearing regarding disfigurement must be filed within 6 months from the date of injury or date of surgery. The ALJ agreed with Claimant’s counsel and found Rule 10 allowed a scar to be evaluated for an award of disfigurement benefits “at any time” subsequent to 6 months of rehabilitation, regardless of the 30-day limit. Respondents appealed the decision and argued Rule 10 does not serve to amend C.R.S. § 8-43-203, allowing an award of disfigurement benefits following the 30-day closure of the claim. The Panel found Respondents admitted for disfigurement at $0 and Claimant failed to dispute the disfigurement amount within 30 days. The Panel set aside the Order, stating that an administrative rule may not expand, enlarge, or modify an underlying statute.

Moral of the story: Final Admissions of Liability must admit for all benefits in order to close the claim following the 30-day deadline, pursuant to C.R.S. § 8-43-203.

 

The ALJ Tips the Scales of Evidence: In Hernandez v ABC Pro Painting, LLC, W.C. No. 5-027-576 (ICAO May 23, 2018), Claimant was working as a painter for the employer when he fell off a ladder injuring his low back. The parties went to an initial hearing on the issues of compensability, whether Claimant was an independent contractor, medical benefits, and penalties for failure to carry workers’ compensation insurance. The ALJ found Claimant was not an independent contractor, that he sustained a compensable injury, and that he was entitled to medical and temporary indemnity benefits. The ALJ also assessed penalties for violating C.R.S. § 8-43-408(1). Respondents appealed on the sole argument that the substantial evidence in the record supported the conclusion that Claimant was an independent contractor and not an employee. The Panel noted there is no precise number or combination of factors which are decisive in determining whether a Claimant is an employee or independent contractor. The Panel found the ALJ applied a totality of the circumstances test and found Claimant to be an employee. The panel opined that they had no authority to substitute their judgement for that of the ALJ concerning sufficiency and the probative weight of the evidence that was presented. The Panel affirmed the ALJ, finding his opinions were supported by substantial evidence.

Moral of the Story: It is very difficult to overcome the factual determination of an ALJ. The Industrial Claim Appeals Office will not reweigh the evidence to reach a result contrary to that of the ALJ.

The Legal Buzz – Lee & Brown Newsletter and Case Law Update June 2018

Lee and Brown LLC Partners and Certifications

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update
on recent developments within our Firm, as well as in the insurance defense community.
Lee and Brown Denver AttorneysFollow us on LinkedIn

 


In the News

Member Karen Gail Treece attended the 2018 CLM & Business Insurance Workers Compensation Conference in Chicago, May 22-24, 2018. The event offered unprecedented knowledge access to leaders in the Workers Compensation profession. The conference focused on national trends. Ms. Treece enjoyed seeing and speaking to industry leaders from across the country.

Noteworthy Cases

Joseph Gren Denver AttorneyIn Akerley v. Sherwin Williams Co. & Indemnity Insurance Company of North America W.C. No. 5-016-101-03, Claimant sought an increase to his average weekly wage (AWW) based on concurrent employment as a hide tanner. Through extensive factual investigation, it was determined that Claimant was terminated two weeks before the industrial injury. The same investigation revealed that Claimant did not disclose a business he owned and operated on the date of injury. Coincidentally, Claimant’s non-disclosed business specialized in the same services he alleged as the basis for concurrent employment. At hearing, Member Joseph Gren and Associate Matthew Fowls cross-examined the Claimant regarding his non-disclosed business. The ALJ discredited the testimony of the Claimant denying an increase to his AWW.

 Of Counsel Frank Cavanaugh and Associate Jessica Melson successfully defended Claimant’s appeal in Romero v. Winn Residential Partnership, W.C. No. 4-978-676. Claimant fell approximately three feet from a ladder while repairing a garage door. Claimant initially reported and treated for cervical spine and left shoulder symptoms. Claimant’s cervical spine symptoms resolved and treatment focused on the left shoulder. Claimant underwent a DIME with Dr. Tyler, who opined Claimant’s cervical spine was not causally related to the fall and placed him at MMI with an advisory 18% upper extremity impairment. Claimant sought to overcome the DIME regarding causation of the cervical spine. The ALJ determined that, while Dr. Tyler found Claimant injured his cervical spine in the fall, he opined Claimant’s current cervical spine complaints and pathology were not related to the industrial incident. The ALJ found Claimant failed to overcome the DIME. Claimant appealed. The Panel noted it was for the ALJ to resolve inconsistencies and conflicting opinions of the DIME physician. Claimant essentially requested ICAO to reweigh the evidence, but the ICAO affirmed the decision of the ALJ.

 


Joshua Brown Attorney Denver#MeToo and EPLI Policies

In response to the #MeToo movement, companies have begun taking an increased role to prevent and police sexual harassment in the workplace. Protecting employees from any form of sexual misconduct or harassment should undoubtedly be the primary goal of these efforts. However, any proactive measures cannot guarantee that no incidents will occur, and companies’ future interests will be at risk. Consequently, counsel and risk managers should look to employment practices liability insurance (EPLI) which can provide coverage and pay for the defense of such claims. EPLI policies provide coverage for many types of the claims employees make against their employers that are not covered by workers compensation policies, including sexual harassment. Continue reading the article.

 


Cases You Should Know

No fake news here: While working as a banker, a man approached Claimant and handed her a note demanding $10,000. The man was provided the money and left. He was arrested several weeks later. Claimant initiated psychological treatment. After the robbery, Claimant had a miscarriage and was in a motor vehicle accident. Claimant sought workers’ compensation benefits based on mental injury. Three of Claimant’s medical providers opined she suffered from PTSD as a result of the robbery. Respondents’ IME physician testified Claimant had an exaggerated response to the robbery and her preexisting history was more likely the result of the mental condition. The ALJ found Claimant embellished facts of the robbery. Nonetheless, the ALJ found the opinions of three of Claimant’s treating providers more persuasive than Respondents’ IME opinions and held she suffered a mental impairment as a result of the robbery. Respondents appealed. Respondents argued Claimant failed to meet the requirements of C.R.S. §8-41-301(2)(a) that the “incident would evoke significant symptoms of distress in a worker in similar circumstances.” Respondents asserted Claimant exaggerated the facts of the robbery and her symptoms were more likely related to an intervening motor vehicle accident and miscarriage. The Panel affirmed. The ALJ’s finding of facts must be upheld if supported by substantial evidence. The record showed the ALJ considered the testimony and facts of the case. The ALJ found Claimant’s evidence more credibly and persuasive than Respondents in determining Claimant sustained a compensable injury. Austin v Wells Fargo, W.C. N. 4-973-614 (ICAO April 20, 2018).

Moral of the Story: It is very difficult to overcome the factual determination of an ALJ. The best evidence must be presented for the ALJ to consider at hearing because the persuasiveness of evidence may not be reconsidered on Appeal.

 

Tomatoe, Tomato. You call it medical treatment. I call it maintenance care: In Hughes v MV Transportation, Inc., W.C. No. 5-015-855, (ICAO April 12, 2018), Claimant sustained a compensable injury to his neck. Claimant was placed at MMI with impairment. Respondents filed an FAL. Afterwards, Claimant was recommended cervical surgery. Respondents contested the surgery arguing it did not qualify as maintenance care and that Claimant instead had the burden to prove reopening. The ALJ found that the ATP continued to opine Claimant remained at MMI after the surgery was recommended. The ALJ found the surgery qualified as maintenance treatment. Respondents appealed. The Panel noted the maintenance care is medical treatment necessary to maintain MMI or prevent further deterioration. C.R.S. § 8-43-203(3)(b); Grover v. ICAO, 759 P.2d 609 (Colo. App. 1995). This excludes treatment that will “cure” or significantly improve the condition. C.R.S. 8-40-201(11.5). Respondents cited to one opinion of the surgeon that the surgery “would improve his radicular pain” as evidence the surgery was not maintenance care. The Panel affirmed the ALJ finding his opinions were supported by substantial evidence.

Moral of the story: Medical maintenance treatment is to maintain MMI and does not include treatment to cure or relieve a condition.

The ALJ can only change the future, not the past: In this case, Claimant suffered an industrial shoulder injury. He was recommended for surgery, but he failed to present to the scheduled surgery three times. Respondents requested termination of Claimant’s TTD benefits due to his injurious practice of refusing to submit to surgery pursuant to C.R.S. § 8-43-404(3). The ALJ ordered termination of Claimant’s TTD benefits as of the date of the Order until he underwent surgery. Respondents appealed seeking termination of TTD benefits as of the date the first surgery was scheduled. ICAO affirmed because when a claim is admitted, an Order may only grant prospective relief. Ferguson v. Lane Electric, Inc., W.C, No. 5-030-198 (ICAO May 4, 2018).
Moral of the Story: An Order terminating benefits will be from the date of the Order as it can only grant prospective relief.

 

Til death do us part: In Ortega v. Blue Star Holding Co. & Fidelity & Guaranty Insurance, the Respondents sought to terminate death benefits to the Claimant’s widow using the theory that she entered a common law marriage with another man. The Respondents looked to the unique facts of the widow’s relationship with the alleged common law husband to meet their burden to prove the existence of the common law marriage. These facts included that the two had a child together, lived in the same house, and shared in many functions of daily life. The ALJ disagreed with the Respondents, and the Respondents appealed. The ICAO affirmed the ALJ’s decision, underscoring the high burden that a party must meet to disturb the factual findings of an ALJ.
Moral of the Story: Terminating death benefits using a common law theory of remarriage is difficult, and very reliant on the unique facts of each case.

 

Metal matters: The Claimant in Ramirez-Chaves v. In-Out Oil Field Services & Farmington Casualty Company injured her low back while lifting a piece of metal during her work as a welder. The matter proceeded to a DIME, wherein Claimant was found at MMI with permanent impairment. Despite placement at MMI, the DIME physician opined that the Claimant required a EMG. Claimant filed an application for hearing to overcome the DIME’s findings with respect to MMI, and succeeded by arguing the EMG was needed before a determination of MMI could be appropriate. Respondents appealed, arguing that necessity of an EMG study is not inconsistent with a finding of MMI. ICAO affirmed the ALJ.

Moral of the story: Where an ATP or DIME physician opines that further medical services are indicated, any finding of MMI faces serious jeopardy.

Overview of General Liability, Workers’ Compensation, and Employment Law ­Issues in K-12 Educational Institutions

This article, written by Of Counsel Frank Cavanaugh and Associate Jenna Zerylnick, examines tort liability, workers’ compensation, and employment law issues that pose unique challenges and create exposure to K-12 school districts. The article also provides examples and practice tips for attorneys practicing in these areas.

Public schools play an important role in our society as education providers and serve a parens patriae1 function. They also offer a valuable social opportunity for children and are a significant part of most communities as employers. According to the Colorado Department of Education, there are 178 independent K-12 school districts in Colorado. These districts vary in size and, as a whole, are among the largest employers in Colorado, employing a variety of employees in many jobs. K-12 schools are public entities and therefore are subject to various federal, state, and local regulations. K-12 school districts face tort, workers’ compensation, and employment liability unique to their role in our state.

This article discusses a great breadth of topics, providing a highlight of key issues that create liability exposure unique to K-12 school districts.

Click to read the entire article that was published in the October 2015 issue of The Colorado Lawyer: Education Law_Colorado Lawyer 10-15

 

THIRD-PARTY RECOVERY (2 – 4 – 6 – 8 Let’s Go Subrogate!)

LetsBeFrankW

As you are probably aware, the Colorado Workers’ Compensation Act has a statute giving a subrogation right to the payer of workers’ compensation benefits. This statute is § 8-41-203, C.R.S. Although referred to as a subrogation lien, it is actually a right of recovery that operates as an assignment. Once benefits are paid under the Act, that payment also assigns a right of recovery to the payer against a third party that may be responsible for the injury that generated a claim for which benefits are paid.

The right of recovery is independent of the injured worker’s right against the third party, meaning that the payer can bring its own cause of action, but the action is still derivative of the underlying workers’ compensation claim. This situation creates tension between the payer and injured worker relative to potential liability of a third party.

This short article gives an overview of what can be recovered along with some data over recoveries. Future articles will flesh-out workers’ compensation recovery problems.

What Can Be Recovered?dollar

The statute outlines what can be recovered. It states that the right to recovery exists to “all compensation and all medical, hospital, dental, funeral, and other benefits and expenses to which the employee or, if the employee is deceased, the employee’s dependents are entitled … for which the employee’s employer or insurance carrier is liable or has assumed liability.” The payer gets a right to recover future benefits paid and the right of recovery “…extends to money collected from the third party causing the injury for all: economic damages, physical impairment and disfigurement damages.” There are certain specific limitations to these recovery categories, but the statute makes a special exemption from recovery for amounts collected for “…noneconomic damages awarded for pain and suffering, inconvenience, emotional stress, or impairment of quality of life.” These amorphous damage categories cannot be subject to recovery by the payer in a workers’ compensation case.

As you can imagine, the struggle in subrogation in workers’ compensation is determining a fair distribution of any third party settlement or judgment between the injured worker and the payer of benefits since there is rarely, if ever, enough in settlement or judgment to fully compensate the injured worker and the payer. One mechanism to determine some of the allocation issues is known as a Jorgensen hearing, named after the case where this method of allocation was set forth. These hearings will be covered in greater detail in newsletters to come.

How Much Recovery Can Be Expected?

Colorado is not a very favorable state for third-party recovery of workers’ compensation benefits. Other states allow the payer to get paid first from any third party recovery, before an injured worker gets paid. Colorado does not allow this, but there are other reasons for low third party recovery. For instance, it is rare that an injury results entirely from the fault of a third-party. There is usually some degree of fault that can be assigned to the injured worker and to other potential non-parties that reduce the overall recovery, and sometimes even to the employer. If a carrier is pursuing a third party claim either with or without the injured worker, the worker’s and employer’s actions can reduce recovery. Further, to the extent that benefits were potentially overpaid, those amounts may not be successfully claimed as damages against a third party. A payer’s failure to mitigate its loss in the workers’ compensation claim by overpaying can also reduce recovery. Finally, and most importantly, judges and/or juries are not receptive to a payer (usually an insurance company) that paid benefits under a limited benefit package, trying to seek those amounts back from a third party.

A survey of the Jury Verdict Reporter from 2002 through present day shows that when a payer went as far as a jury verdict to try and recover against a third party, the amount claimed in recovery vs. the amount actually recovered was only 21%. Please note this is a limited sampling of recovery cases. In these cases defendants obviously felt strongly enough about their position to take the case to trial. Further, the Jury Verdict Reporter is not comprehensive of all cases taken to trial and the facts of each case are different. Taking all of these issues into account, this still demonstrates a less than favorable environment for recovery. If you would like a breakdown of this data, case by case, please email fcavanaugh@leekinder.com and I will forward it to you.

Bottom Line

Workers’ compensation is complicated and recovery of benefits paid only compounds the complication. It requires someone who understands workers’ compensation and liability matters. We have handled all aspects of recovery cases, including defending against them. Watch for future recovery topics in future newsletters. In the meantime, if you have any questions about this topic, please do not hesitate to call or email us.