Court Awards Attorney’s Fees Against Employer/Insurer for Failure to Timely Initiate Benefits

In Thompson v. Comcast Corp., et al, 2017-05-0639, State File No. 63224-2016 (filed January 30, 2018) the Court awarded attorney’s fees when an employer/insurer failed to timely initiate benefits. To gain insight on how the Court reached it’s determination it is important to consider the factual circumstances.

During the course of the litigation and through the Expedited Hearing, wherein attorney’s fees were awarded, numerous disputes arose. The claimant was treated by Dr. James Johnson who gave the opinion the claimant sustained a herniated disc. Dr. Johnson also gave the opinion this condition/injury was primarily caused by the injury which was the subject of the claim. Subsequently, Dr. Johnson indicated the claimant had a disc bulge and there were inconsistencies which ultimately prompted Dr. Johnson’s deposition.

Prior to Dr. Johnson’s deposition the doctor referred the claimant to pain management which was refused by the employer. Prior to the deposition of Dr. Johnson, the claimant’s attorney obtained a letter from Dr. Johnson which indicated the claimant’s need for treatment arose primarily out of the injury which was the subject of the claim and a referral for pain management was reasonable and medically necessary as a result of the work injury.

The deposition of Dr. Johnson took place. He testified the claimant sustained a compensable injury, had an anatomical impairment rating and needed pain management all as associated with the work injury. Despite this the employer still refused the claimant a pain management panel. Immediately prior to the Expedited Hearing the employer offered the claimant a panel of pain management physicians from which the employee could choose a doctor for a one time evaluation. This was refused. It was asserted by the claimant’s attorney that this was not in compliance with statute.

The Trial Court found the claimant would have the opportunity to choose his own pain management physician, indicated the claimant was entitled to medical care as referenced, asserted the employer had wrongfully failed to initiate benefits and, as a result, awarded reasonable attorney’s fees (not determined at that time) and referred the claim to the penalty unit for further investigation.

The matter was appealed. On appeal the Appellate Court determined the claimant had not developed a patient/physician relationship with any physician and could not, therefore, choose his own physician. The claimant had to choose a pain management physician from a panel to be provided.

The main issue within the appeal, however, was associated with the attorney’s fees. The Appellate Court interpreted T.C.A. § 50-6-226(d)(1) which states in pertinent part:

[T]he court of workers’ compensation claims may award reasonable attorneys’ fees and reasonable costs, including reasonable and necessary court reporter expenses and expert witness fees, for depositions and trials incurred when the employer:

. . . .

(B) Wrongfully denies a claim by filing a timely notice of denial, or fails to timely initiate any of the benefits to which the employee is entitled under this chapter, including medical benefits under § 50-6-204 or temporary or permanent benefits under § 50-6-207, if the workers’ compensation judge makes a finding that such benefits were owed at an expedited hearing or compensation hearing.

The Appellate Court addressed the fact the Trial Court concluded that the employer had “wrongfully denied” the claimant’s right to pain management. As a result, the Appellate Court basically had to two tasks. Those tasks were to interpret the statute and to further address whether or not it was appropriate to award attorney’s fees under at Expedited Hearing level.

With respect to the interpretation of the statute, the Court determined the statute provided two circumstances under which attorney’s fees could be awarded. Those were:

1. When the employer/insurer, “wrongfully denies a claim by filing a timely notice of denial;” or

2. Fails to timely initiate any of the benefits to the employee is entitled under this Chapter. . .

The Appellate Court indicated the two phrases referenced were separated by a comma and the word “or.” As a result, the Court determined there were two circumstances in which attorney’s fees could be awarded. The Appellate Court determined:

Thus, we conclude that the word ‘wrongfully’ modifies only the first phrase. An employer can be held liable for reasonable attorney’s fees and costs when it ‘fails to timely initiate any of the benefits to which the employee is entitled under this chapter.’

In essence, the Appellate Court determined that when the failure to initiate the benefits is wrong (as determined by the Court) and (as in this case) the basis of the failure to initiate benefits is sufficiently egregious, the Workers’ Compensation Claims Court “may” award attorney’s fees. To reach this conclusion, however, the Court pointed out the numerous failures of the employer/insurer in initiating benefits. The Court noted:

Parties and their lawyers cannot rely on their own medical interpretations of the evidence to successfully support their arguments, and they face significant risk if they choose to do so.

As such, we conclude this case exemplifies one of the extreme limited set of circumstances where an award of reasonable attorneys’ fees and costs is appropriate at this interlocutory stage of the case. Regardless of the ultimate resolution of the case, employee’s entitlement to a panel of pain management specialists as recommended by the authorized treating physician, and the employer’s five month refusal to offer such a panel will not change. Moreover, the work employee’s attorney undertook to secure that panel will not change. Had employer taken one or more of the actions described above to support its denial of a panel, such action or actions may have mitigated against an award of attorneys’ fees and costs at this interlocutory stage of the case.

Comment: Since the inception of the modification to the Workers’ Compensation Act many employees have had to proceed pro se as there was limited monetary incentive for attorneys to represent the employee. Many Judges have been of the opinion this has been a significant shortcoming in the changes in the law. Based upon a comment made by Judge Hensley in the Dissenting Opinion I am of the opinion the ruling in the Thompson decision, in part, was to modify the potential fee issue and provide some incentive for attorneys to again become involved. With respect to this Judge Hensley indicated:

I am not unmindful of the benefits of a policy to facilitate and encourage attorneys to undertake the representation of injured workers. Indeed, such a policy promotes and adheres to the Workers’ Compensation Act’s purpose of securing benefits to those workers who fall within its coverage.

It is worth noting this decision was only recently rendered. There may still be additional appellate consideration to this issue. Either party may appeal this to the Supreme Court and that Court, at its discretion, may accept further consideration of the issues in contention in this matter.


The Admissibility of Expert Testimony of a Vocational Consultant in Workers’ Compensation Cases on the Subject of an Employee’s Disability

The Supreme Court of Tennessee Special Workers’ Compensation Appeals Panel recently decided a matter involving the relevancy and admissibility of the testimony of a vocational consultant regarding an injured employee’s total disability. Miller v. State, No. E2015-00034-SC-R3-WC, 2015 WL 7013864 (Tenn. Workers Comp. Panel November 5, 2015) involved an Employee for the University of Tennessee. While moving a sign during his shift as a parking lot attendant, the Employee injured his neck.

An MRI and CT scan revealed a herniated disc and spinal cord compression. Employee had surgery for his neck shortly after the accident. After surgery, Employee had pain in his right arm and hand. His treating physician stated that he had a residual nerve injury which could not be confirmed by diagnostic testing. A different physician performed an independent medical evaluation (“IME”) a year later. The IME physician was unable to state whether the Employee’s upper extremity issues were related to the work injury. However, he assigned a 15% permanent partial impairment rating to the body as a whole for the injury and found that the Employee had little hope to get back to meaningful employment.

Thereafter, the Employee underwent a functional capacity evaluation (“FCE”). The therapist who conducted the FCE found the Employee was able to perform “light physical demand” work. After seeing the results of the FCE, the IME physician stated he had no problem with Employee working light physical demand type of work.

A vocational consultant evaluated the Employee at the request of the Employee’s attorney. The consultant assessed that all of the Employee’s previous jobs were unskilled and required heavy physical labor. He further found the Employee to read at a 5th grade level.

The vocational consultant reviewed the results of the FCE. Based on these assessments, the vocational consultant disagreed with the FCE and found that Employee was not capable of light work or even sedentary-type work. The vocational consultant further found the Employee to be totally disabled and opined that Employee sustained a 49% vocational disability as a result of his work injury.

The University objected to the admission of testimony of the vocational consultant which interpreted the results of the FCE and which opined on the Employee’s permanent disability. The trial court overruled the objection. The trial court then ruled that the Employee was permanently and totally disabled as a result of his work injury.

The University appealed partly on its contention that its objection to the vocational consultant’s opinions should not have been overruled by the trial court. The University argued that it was outside a vocational consultant’s expertise to place medical restrictions on an injured worker.

While the appellate court agreed, it found the consultant to be qualified to offer an opinion on vocational disability. The vocational consultant was found to have accepted the conclusions of the FCE regarding Employee’s abilities to perform various tasks before engaging in his analysis of whether the Employee had a vocational disability. Thus, he did not venture outside his area of expertise in assessing the Employee’s medical condition. Once he accepted the FCE’s conclusions, his further assessment was based on data from government and private sources regarding the physical exertion requirements of various jobs. It was the use of these sources, along with using the data from the FCE, which provided the vocational consultant the basis of his opinions regarding the Employee’s vocational disability.

Therefore, the appellate court held the vocational consultant’s testimony to be relevant and admissible. Thus, the trial court was found to not have abused its discretion by overruling the University’s objection to the vocational consultant’s testimony.


Reconsideration of Tennessee Workers’ Compensation Benefits After Termination for Cause

In Stacey v. Nissan North America, Inc., No. M2014-00796-SC-R3-WC, 2015 WL 6119501 (Tenn. Workers Comp. Panel October 15, 2015) the Supreme Court of Tennessee Special Workers’ Compensation Appeals Panel assessed an Employee’s right to reconsideration of prior workers’ compensation awards following the Employee’s termination.

A claimant’s request for reconsideration of a prior award or settlement is governed by Section 50–6–241(d)(1)(B), Tennessee Code Annotated, which provides (in pertinent part):

(i) If an injured employee receives benefits for body as a whole injuries pursuant to subdivision (d)(1)(A) and the employee is subsequently no longer employed by the pre-injury employer at the wage specified in subdivision (d)(1)(A) within four hundred (400) weeks of the day the employee returned to work for the pre-injury employer, the employee may seek reconsideration of the permanent partial disability benefits….

(iii) Notwithstanding this subdivision (d)(1)(B), under no circumstances shall an employee be entitled to reconsideration when the loss of employment is due to…

(b) The employee’s misconduct connected with the employee’s employment.

Tenn.Code Ann. § 50–6–241(d)(1)(B).

Courts in Tennessee have consistently held that “even though an employee might have a statutory right to reconsideration, there is no entitlement to an enlargement of the previous award.” Pigg v. Liberty Mutual Insurance Co., No. M2007–01940–WC–R3–WC, 2009 WL 585962 at *4 (Tenn. Workers Comp. Panel March 9, 2009). Stacey, along with other recent decisions by the Panel, point to the boundaries of the exception to the right to reconsideration.

In Marvin Windows of Tennessee, Inc. v. Gardner, No. W2011–01479–WC–R3–WC, 2012 WL 2674519 (Tenn. Workers Comp. Panel June 8, 2012) an employee settled a workers’ compensation claim and returned to work for his pre-injury employer. Employee was later diagnosed with cancer and took a medical leave of absence for over one year. The employer’s written policy permitted one year of medical leave. When the employee was unable to return to work after one year of medical leave, the employer terminated his employment. The employee then sought reconsideration of his earlier award, but the trial court ruled that he was not eligible for reconsideration.

On appeal, the Panel considered whether the employee’s failure to comply with the employer’s medical-leave policy constituted “misconduct” for purposes of the reconsideration statute. The Panel noted that “[t]he employee behavior need not rise to the level of gross or willful misconduct to satisfy this misconduct standard. Misconduct refers to an employee’s inability to perform his or her job due to reasons unrelated to a workplace injury. The standards for behavior and productivity are governed by reasonable policies established by the employer.” Marvin Windows, 2012 WL 2674519, at *3–4 (Tenn. Workers Comp. Panel June 8, 2012) (internal citations omitted).

Further, “The court must also consider the employer’s need to enforce workplace rules and the reasonableness of the contested rules. Employers should be permitted to enforce workplace rules without being penalized in a workers’ compensation case. Therefore, an employer will not be penalized for enforcement of a policy if the court determines (1) that the actions allegedly precipitating the employee’s dismissal qualified as misconduct under established or ordinary workplace rules and/or expectations; and (2) that those actions were, as a factual matter, the true motivation for the dismissal.” Id., (citations omitted). The Panel in Marvin Windows found that the employer’s medical-leave policy was reasonable and the employee’s inability to comply with that policy constituted “misconduct” that barred reconsideration of the employee’s earlier settlement award. Id.

In Dia v. Imports Collision Center, Inc., No. M2013-01496-WC-R3-WC, 2014 WL 4104591, (Tenn.Workers Comp.Panel Feb. 24, 2014), an employee sought reconsideration of his previous settlement after his employment was terminated. Employee and employer disputed many of the events regarding the circumstances of termination, but it was undisputed that employee had sought to have employee sign a disciplinary form to return to work and that employee failed to do so. The employer claimed that the employee, among other things, was terminated for misconduct, and thus was not entitled to reconsideration of his previous settlement. The Appeals Panel found that the employee’s actions in failing to sign the disciplinary notice constituted misconduct for purposes of the reconsideration statute.

In Stacey, the Employee attempted to receive reconsideration of three previous workers’ compensation claims following his termination. The Employee was terminated after a verbal altercation with an employee of a workout facility provided by the Employer for its employees. Prior to this argument, Employee had completed his workday, left the premises, and returned on his own time to the workout facility. The workout facility was staffed by a contractor, and therefore the employee on the receiving end of the altercation was not an employee of the Employer. Employer had never before disciplined employees for actions occurring at the workout facility.

Based on this fact pattern, the appellate court held that Employee’s termination was not sufficiently connected to his employment in order to meet the “connected with” language under 50–6–241(d)(1)(B) since it occurred offsite, outside of the context of the Employee’s employment and to not involve a clear violation of a policy of the Employer. The Employee was thus entitled to reconsideration of his previous awards and settlements.

As shown in Stacey, Dia, and Marvin Windows, the determination by Tennessee courts as to whether or not a termination meets the standard of misconduct “connected with an employee’s employment” under § 50–6–241(d)(1)(B) is fact-intensive. The closer the employee’s “misconduct” can be found to have violated a clear policy of the employer, the more likely they are to be found to meet the standard for an exception to the employee’s right to reconsideration.


Overcoming Medical Impairment Registry Physician’s Opinion on Anatomical Impairment Rating Requires Clear and Convincing Evidence in Tennessee

Recently, the Workers’ Compensation Appeals Panel had the opportunity to address how a Medical Impairment Registry physician’s opinion on an anatomical impairment rating may be overcome in the case of Victory v. Bob Duck Wiler d/b/a Custom Concrete Design, (September 8, 2015). In this matter numerous physicians were of the opinion the claimant had nonspecific back pain, no true radiculopathy and did not require back surgery. Ultimately, Dr. Hazlewood subsequently saw the claimant and reached an opinion the claimant had normal findings and no objective findings of radiculopathy. Dr. Hazlewood provided the claimant a 2% permanent anatomical impairment rating to the body as a whole for the lumbar spine injury.

The claimant underwent an independent medical evaluation by Dr. Richard Fishbein. He provided the claimant a 13% permanent anatomical impairment rating to the body as a whole based upon his findings of radiculopathy.

With this differentiation in the impairment ratings apparent the Medical Impairment Registry physician became involved. The Medical Impairment Registry physician, Dr. Robert Landsberg, provided an opinion the claimant retained a 3% permanent anatomical impairment rating to the body as a whole and did not find true radiculopathy either.

The Trial Court determined the employee and his attorney had overcome the presumption of correctness of the Medical Impairment Registry’s physician and held the employee’s anatomical impairment rating was 13% to the body as a whole as defined by Dr. Fishbein. The Court awarded the employee vocational disability of 54% to the body.

On appeal the Appeals Panel held that to overcome the presumption the Medical Impairment Registry physician’s was correct required clear and convincing evidence. The term “clear and convincing evidence” was not defined by the statute which set in place the Medical Impairment Registry process (T.C.A. § 50-6-204(d)(5)) and therefore, they relied upon a Supreme Court decision which held, “clear and convincing evidence means evidence in which there is no serious or substantial doubt about the correctness of the conclusions drawn from the evidence.”

The Appellate Court, in considering Dr. Fishbein’s testimony, agreed with the characterization of Dr. Fishbein’s testimony as being “unusual.” The Panel determined Dr. Fishbein’s testimony was rambling at times and evasive at others. The Trial Court determined Dr. Fishbein had overcome the Medical Impairment Registry opinion by clear and convincing evidence. The Trial Court found it had seen the employee within the courtroom and was of the opinion the employee had true pain.

With respect to this the Panel held, “whether such a medical condition exists is not a matter that can be determined by observation of a part in the courtroom. It must be decided based on the medical evidence.” With this in mind the Court held the opinion of the Medical Impairment Registry physician had not been overcome by clear and convincing evidence.

Results of this opinion lead to a conclusion that the opinion of the Medical Impairment Registry physician, whether good or bad, will generally be upheld unless there is a presentation of affirmative evidence that an Medical Impairment Registry physician had used an incorrect method to provide a rating or an inappropriate interpretation of the AMA Guidelines. A disagreement between medical experts as to the proper diagnosis of an employee’s condition may not, in and of itself, constitute the clear and convincing evidence needed to overcome the statutory presumption of accuracy afforded a Medical Impairment Registry physician’s impairment rating.


The Tennessee Supreme Court Determines There is No Cause of Action for Purported Retaliatory Failure to Hire Due to Prior Workers Compensation Claim.

In Kighwaunda V. Yardley v. Hospital Housekeeping Systems, LCC, the Tennessee Supreme Court determined there was not a viable cause of action in Tennessee for retaliatory failure to hire due to a prior workers compensation claim.  There has, however, long been a cause of action for retaliatory discharge for asserting a work injury.  To be successful with a cause of action of this type the employee must establish numerous elements including:

1. The plaintiff was an employee of the defendant at the time of the injury;
2. The plaintiff made a claim against the defendant for workers’ compensation benefits;
3. The defendant terminated plaintiff’s employment; and
4. The claim for workers’ compensation benefits was a substantial factor in defendant’s motivation to terminate the plaintiff.

The Supreme Court, however, held there is a fundamental difference between discharging an employee as a result of a work-related injury and refusing to hire a job applicant because they previously filed for workers’ compensation benefits.  In this case, the claimant had a work-related injury but was ultimately released to perform full duty work and applied for a job with Hospital Housekeeping Systems but was not hired, at least in part, due to the fact she previously filed a workers’ compensation claim.  The claimant sued Hospital Housekeeping Systems in Federal District Court raising a number of claims one of which was the company failed to hire her because she had a previous workers’ compensation claim which gave rise to a cause of action for a “retaliatory failure to hire.”  The claimant recognized this cause of action had not previously been recognized in Tennessee.  The Federal District Court requested the Tennessee Supreme Court to consider whether or not there should be a cause of action for this.  Federal Courts certify questions of this type to State Supreme Courts when a Federal Court is ruling on a cause which involves an issue that has not been previously addressed by the State or its Legislature.

Our Supreme Court determined Tennessee is an employment-at-will state and there has been no such cause of action created by the Legislature.  As a result, the Supreme Court was unwilling to recognize this as a cause of action.  As a side note, this does not mean she had no claim for disability discrimination under the American’s with Disabilities Act (ADA) and the Tennessee Human Rights Act (THRA).


Breaking the Chain of Causation on Underlying Injury in Tennessee Workers’ Compensation Cases

Recently, the Tennessee Workers’ Compensation Panel addressed when an intervening incident may break the chain of causation for an underlying injury and eliminate further exposure.  United Parcel Service, Inc. v. Sabrina Brown, Tenn. Special WC App. Panel, No. M2014-01332-SC-R3-WC (Tenn. WC App. Panel, 2015).  In this case, the claimant injured her right knee on July 8, 2010.  She received initial medical care and temporary benefits.  Initial diagnostic testing suggested the claimant had a torn anterior cruciate ligament.  Surgery took place on September 9, 2010.  Immediately following surgery the treating physician found the claimant had normal post-surgical findings and instructed the employee to use crutches, place no weight on her right leg and wear a brace.

In or around October of 2010 (approximately one month following surgery) the claimant was in her backyard.  She noticed a sharp object laying on the ground and placed both crutches to her left side and attempted to reach down to pick up the object.  In doing this she lost her balance and felt an immediate twinge in the knee.

Subsequent to this event the treating physician had concerns the claimant had a possible failure of the ACL repair.  By December of that year the treating physician concluded the graft or surgery had failed and recommended an additional surgery.  The employer argued there had been a break in causation and the employer should not be held responsible for additional care.

The Appeals Panel determined there was not a break in the chain of causation and relied heavily upon Anderson v. Westfield Grp., 259 S.W.3d 690 (Tenn. 2008).  Generally, the Court held the aggravation of an original injury is compensable if it is direct and natural result of the compensable injury.  In addition, the Panel relied upon the treatise created by Larson who determined every natural consequence that flows from the injury likewise arises out of the employment injury.  The Appeals Panel referenced this as the “natural consequences rule.”  The Panel, however, recognized this rule has a limit.  The limit hinges on whether the subsequent injury is the result of independent intervening causes such as the employee’s own conduct.  In essence, every natural consequence that flows from the initial injury is compensable or related, “unless it is result of an independent intervening cause attributable to the claimant’s own intentional conduct.”  In addition, the chain of causation can be broken if it is found that, “the injured employee, knowing of his weakness, rationally undertakes to do things likely to result in harm to himself, the chain of causation is broken by his own negligence.”

In this matter the authorized treating physician testified he did not believe the claimant had done anything wrong in attempting to lift the item out of her backyard.  With respect to this he testified, “it was my opinion that Ms. Brown’s activities during her initial post-operative period were not inappropriate.  So I didn’t think that she was at fault for doing anything wrong that was out of the ordinary for post-operative ACL reconstruction.”

The Court found there was no negligence nor any intentional act.  As a result, the Court found the chain of causation was not broken.

In essence, unless the subsequent injury or event is work-related for a separate employer and one can invoke the “last injurious rule” the intervening incident or activity must be fairly significant.  It must rise to the level of intentional conduct or negligence.  This is a much tougher threshold.


Can an unrepresented employee have a workers’ compensation settlement approved by affidavit for injuries which occurred on July 1, 2014 or subsequently in Tennessee?

In the past courts in the State of Tennessee approved settlements of employees who were not represented by affidavit.  This is especially true for those claims in which the claimant was receiving an award which approximated the value of the claim and the employee retained the right to open medical treatment per the terms and conditions of the Tennessee Workers’ Compensation Act.  For injuries which occurred on July 1, 2014 or subsequently, however, the legislature has created a new statute which precludes this.

More specifically, Tennessee Code Annotated § 50-6-240 states, “in approving settlements, a workers’ compensation judge shall consider all pertinent factors and if the injured employee is not represented by counsel, then the workers’ compensation judge shall thoroughly inform the employee of the scope of benefits available under this chapter and the employee’s rights and the procedures necessary to protect those rights.

When this was first drafted it seemed the administrative law judges may handle settlements of this type telephonically.  Based upon representations made by the Department of Labor, they are not going to handle settlements of this type in this fashion at the outset.  As a result, if the injured employee is not represented by counsel then that employee will need to present to the Tennessee Department of Labor for approval of his/her workers’ compensation settlement.