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.