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D.C. Court of Appeals clarifies the method to assign permanent partial disability awards

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Virginia Workers’ Compensation:  Injury After Clocking Out

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Workers Compensation

D.C. Court of Appeals clarifies the method to assign permanent partial disability awards




            Like many other workers’ compensation statutes, the D.C. Workers’ Compensation Act [Act] provides a schedule setting forth the amount of benefits that may be awarded for the permanent disability of certain body members.  D.C. Code § 32-1508(3).  For example, the Act dictates that the loss of an arm results in an award of 234 weeks of compensation benefits.  Partial loss of use of the arm is compensable in a proportionate amount, i.e., a 10% permanent disability of the arm equates to 23.4 weeks of compensation benefits.  Thus, the schedule of disabilities may be seen as a legislative determination of the presumed occupational impact of these permanent disabilities, without requiring proof of actual lost wages in every case.  In contrast, permanent partial disability benefits for non-scheduled members are based upon actual wage loss.  Thus, compensation for injuries to the neck or back is payable at a rate of two-thirds the wage loss for up to 633 weeks.

            Over time, this simple statutory scheme was interpreted in ways that made it difficult to determine whether or not the claimant sustained a scheduled disability, and the extent of the disability sustained. For example, neck injuries frequently cause radiculopathy, i.e., nerve pain radiating down the arm. The courts held that the place of the impairment, not the place of injury, controls for purposes of determining disability. From there, it was argued that some injuries cause impairments in more than one place. In 1999, the Court of Appeals affirmed a decision awarding scheduled benefits for a disability of the arm, plus additional benefits for any wage loss that could be attributed to any “separate and distinct” disability of the shoulder resulting from the same shoulder injury. Morrison v. D.C. DOES, 736 A.2d 223 (D.C. 1991). This generated still more litigation over whether these separate awards should be paid consecutively, or together at the same time.

           The case of M.C. Dean, Inc. v. D.C. Dep’t of Emp’t Servs., 146 A.3d 67 (D.C. 2016) [Dean] provided a vehicle for the Court of Appeals to clarify how Administrative Law Judges should make permanent partial disability awards.  In Dean, the treating physician assigned a 27% whole body impairment as a result of the claimant’s neck and shoulder injuries.  The claimant’s attorney wrote to the physician, explaining that an impairment of the neck and shoulders would not be compensable under the Act because the claimant sustained no wage loss, and asked him to express the impairment as the equivalent impairment of the claimant’s arms.  The physician obliged, assigning a 31% impairment of the left upper extremity and a 16% impairment of the right upper extremity. The physician addressed the impairments of the neck, shoulders, arms, and hands all together, explaining that in his view, “the upper extremity begins at the base of the skull.” 

          The case proceeded to a formal hearing, and the ALJ ultimately assigned a 45% permanent partial disability to the right upper extremity, and a 30% permanent partial disability to the left upper extremity.  The medical impairment ratings were increased by the ALJ to account for the claimant’s testimony about his pain, weakness, and loss of endurance, as well as the impact the injuries had on his ability to engage in personal, social, and occupational activities like playing ball and shopping for groceries. The award amounted to over $130,000 in permanent partial disability benefits, even though the claimant had never sustained any actual wage loss on account of his neck and shoulder injuries. 

            The Court of Appeals identified two problems with this approach.  First, the impairment ratings of Claimant’s arms were assigned based on injuries to his neck and shoulders.  The Court recognized that without a clear line of demarcation, a claimant could choose to collect a scheduled loss award where there is no wage loss, and vice versa. The Court decided that a neck injury could not support an award for an impairment of the arm.  Noting that earlier decisions had held that the shoulder was not part of the arm, the Court remanded the case to the agency to consider whether or not this interpretation of the statute should be reconsidered and allow the arm to be equated with the upper extremity, and include the shoulder.

          The Court also held it was improper to award benefits based on the effect of the injury on the claimant’s ability to engage in personal or social activities.  These awards went beyond the scope of the Act, which is intended to compensate for lost earnings. The Court held that a disability rating should focus on loss of occupational capacity.  The economic disability rating may be different from the medical impairment rating, but any variance should be specifically explained by an analysis of how the impairment affects the ability to work, and not in the abstract.

          On remand from the Court of Appeals, the Compensation Review Board adopted the suggestion to make the shoulder part of the arm for purposes of permanent disability ratings and “jettisoned” the approach taken earlier in MorrisonLawson v M.C. Dean, CRB 14-056 (2017). Following the most recent edition of the AMA Guide, the Board held that entire upper extremity -from the shoulder to the hand- is the arm for purposes of assigning permanent partial disability benefits under the schedule. 

          The Board also rejected the recently emerging trend of ALJs awarding increased disability ratings to account for “personal, social and occupational factors” associated with the injury.  Henceforth, any variation from the medical impairment rating must be based on the statutory allowance for pain, weakness, atrophy, loss of endurance and loss of function, and then only to the extent it can be shown to have an identifiable nexus with the claimant’s wage earning capacity.

          Applying these new standards, Administrative Law Judge Roberson rejected the opinion supplied by Dr. Moskovitz and reduced the permanent partial disability to 12% of the left arm and 3% of the right arm due to the work injury.  This reduction, from a combined disability of 75%, resulted in giving Dean a credit of $148,141 to offset against any future indemnity awarded. Lawson v M.C. Dean, AHD 06-431E (Feb. 27, 2017).

          Dean should have a very favorable impact on future claims. Under this binding precedent, cervical radiculopathy should no longer support a claim for disability of the arm. By the same reasoning, back injuries should not result in a disability of the leg. Non-scheduled injuries will be compensated only on the basis of actual, demonstrated wage loss again. Shoulder injuries are now considered part of the arm, subject to the 234 week limitation on permanent partial disability benefits. And hip injuries should be compensated as part of the leg.

          Perhaps most importantly, ALJ’s will no longer be allowed to increase the disability over the medical impairment ratings to account for the alleged personal or social impact of the injury. Any increase in disability on account of occupational impairment based on the statutorily recognized factors of pain, weakness, atrophy, loss of endurance or function must be directly related to the claimant’s ability to work. This will reduce uncertainty and litigation, making workers’ compensation awards predictable again.

          To discuss the impact of the M.C. Dean case further, please call D. Stephenson Schwinn at 703-246-0900.

Posted by D. Stephenson Schwinn on 05/04/2017 at 07:38 PM
District of ColumbiaWorkers CompensationPermalink

Virginia Workers’ Compensation:  Injury After Clocking Out

In Jones v. The Woodlands, Inc., Jurisdiction Claim No. VA00001035833 (March 29, 2016), the Virginia Workers’ Compensation Commission ruled that an employee injured on the employer’s premises but after he had clocked out was not injured in the course of his employment.  The Commission reversed the Deputy Commissioner’s ruling that the injury was compensable.

The claimant, Robert William Jones, was a nursing assistant for the employer, an assisted living facility.  The claimant clocked out at 7:30 am on the morning of February 18, 2015.  He claimed that he “went straight … on over” to another building on the premises in order to retrieve his paystub from the human resources office.  Paystubs were mailed or emailed to employees and employees were not required to pick up a copy from human resources but the claimant needed to provide a copy in order for his wife to continue to receive disability benefits.  The claimant was reportedly in the human resources office for approximately five minutes obtaining the paystub, and then left, walking to his car in the parking lot.  The claimant slipped and fell on snow and ice and was reportedly discovered around 9:00 am.  He was transported by ambulance to the hospital where he was treated for his injuries.

An employee remains within the course of his employment for “a reasonable period while he winds up his affairs” after clocking out.  Jones, JCN. VA00001035833, at 5.  (citing 1A A. Larson, Workman’s Compensation § 26.10 (1989)).  The Commission looked to the exact sequence of events in order to determine whether the ninety minutes between the time that the claimant clocked out and the time his injury was discovered constituted a reasonable period.  The claimant testified that he walked slowly to the human resources office in order to avoid falling, and arrived “a little before 8:00.”  Id. at 3.  He estimated that, after falling, he lay on the ground for approximately one hour, calling for help before he was discovered.  Id.  Two employees in the human resources office testified that, although the office generally opens at 8:00 am, they did not arrive to open the office until approximately 8:45 am on the morning of February 18, 2015 due to transportation difficulty caused by the snow.  Id.  They testified that the claimant did not arrive at the human resources office until shortly before 9:00 am and that they heard him fall and call for help only moments after he left the human resources office.  Id. at 3 – 4.  The claimant’s inability to explain his whereabouts between the time he clocked out at 7:30 am and his arrival at the human resources office shortly before 9:00 am persuaded the Commission that the claimant had not proven that his injury occurred in the course of his employment.  Id. at 7.

“To establish that an injury occurred ‘in the course of’ employment, the claimant must show ‘that the injury occurred within the period of employment, at a place where the employee was reasonably expected to be, and while he is reasonably fulfilling the duties of his employment doing something reasonably incident to his employment.’”  Id. at 5 (citing Norfolk Cmty Hosp. v. Smith, 33 Va. App. 1, 5, 531 S.E.2d 576, 578 (200)).  An injury that occurs outside the normal time or place of work while an employee is not doing anything to benefit the employer does not occur in the course of employment.  Conner v. Bragg, 303 Va. 204, 208, 123 S.E.2d 393, 396 (1962).  The Commission looked to its decision in McKinney v. Hardee’s, 67 O.I.C. 99 (1988), in deciding that Jones’ injury did not occur in the course of his employment.  .  In McKinney, the claimant clocked out at approximately 11:30 pm on a Thursday and waited in the dining area some amount of time between thirty minutes and two and a half hours for the arrival of her paystub, which she would otherwise have been given the next day, Friday, at the end of her shift.  Id.    The claimant in McKinney was injured when, while waiting for the paystubs to be delivered to the restaurant, she got up to get a drink and slipped on an unknown substance on the floor.  Id.  In some cases, employees are still considered to be in the course of their employment while picking up paychecks or paystubs if the employees are thereby providing some benefit to the employer.  See Decatur v. American Silk Mills, Inc., O.I.C. 137 (1981) (ruling that an employee was in the course of his employment while picking up a paycheck from a plant that had closed); Ali v. Bradlees, I.C. 128-39-27 (June 10, 1988) (ruling that an employee was providing a benefit to the employer while picking up a paycheck that needed to be cashed in store). 

The Commission’s decision in McKinney was based in part on the fact that the claimant was unable to identify the cause of the slippery floor or explain its relation to her employment.  67 O.I.C. 99.  The recent decision in Jones clarifies the string of Commission rulings on employees injured while obtaining paychecks because its decision was based on the amount of time that passed after the claimant clocked out and the purely personal nature of his activities after clocking out.  JCN. VA00001035833, at 7.  The claimant’s ability to identify the specific cause of his fall was not a factor in deciding whether or not the injury occurred within the course of his employment as it was in McKinney.

Posted by Andrew E. Suddarth on 04/15/2016 at 06:21 PM
VirginiaWorkers CompensationPermalink

Avoiding the Late Payment Penalty

Compensation awarded in an Order must be "paid within 10 days after it becomes due" or a statutorily mandated twenty-percent penalty shall be imposed. D.C. Code § 32-1515.

In Daly v. D.C. Dep't of Empl. Servs., 2015 D.C. App. LEXIS 359, 12-13 (D.C. Aug. 6, 2015), the Court held that payment becomes "due" within ten days of the employer/insurer receiving notice of either OWC's or the Hearings and Adjudication Section's order via certified mail or registered mail, return receipt requested, if that is the method on which the administrative agency decides to serve the party. The Court rejected Claimant’s argument that the ten-day time period began to run when the employer/insurer had "actual notice," i.e. when counsel forwarded a copy of the order via email.

In Orius Telcoms., Inc. v. D.C. Dep't of Empl. Servs., 857 A.2d 1061 (D.C. 2004), the Court held that the term "paid" in this context means money actually received, not the date payment was posted or mailed. Compensation must be received by the Claimant within ten days after the employer/insurer receives the Order to avoid the imposition of the penalty.

For further information concerning the defense of District of Columbia workers' compensation matters, call Jordan Coyne LLP Partner Steve Schwinn, at 703-246-0900.

Posted by D. Stephenson Schwinn on 09/08/2015 at 09:18 PM
District of ColumbiaWorkers CompensationPermalink

D.C. Workers Compensation Act Amended to Provide for Reversion of Third Party Claims

The District of Columbia Workers Compensation Act provides for an automatic assignment of the right to sue a third party to the employer if the person entitled to compensation does not file suit within six months after being awarded compensation in an order. D.C. Code § 32-1535(b). This provision had been applied to bar a worker from filing a civil action for damages against a third party tortfeasor more than six months after being awarded worker’s compensation benefits in an order, even if it operated to shorten the general three year statute of limitations for the worker to file suit. Cunningham v. George Hyman Constr. Co., 603 A.2d 446, 447 (D.C. 1992).

The District of Columbia Council recently amended the Act to allow for a reversion of the right to sue third party liable for the worker’s injury if the employer does not file suit against the third party within 90 days. D.C. Law 20-159, § 2. (Effective February 26, 2015). This amendment applies to causes of action for negligence for which the three-year statute of limitations [generally applicable to negligence claims] has not yet expired. Id. § 3. 

With this amendment, the Council modified the assignment provision to have the right to file suit against the tortfeasor revert back to the injured worker if his employer does not file suit within 90 days.  This change is akin to the Longhore and Harbor Workers’ Compensation Act 33 U.S.C. § 933(b) (1988), as amended by Pub. L. No. 98-426 § 21(a) (1984) ("If the employer fails to commence an action against such third person within ninety days after the cause of action is assigned under this section, the right to bring such action shall revert to the [employee].") and the Maryland Workers’ Compensation Act, where the worker’s right of action is assigned to the employer when the Commission awards compensation benefits, but it reverts back to the worker if suit is not filed within two months after the award. Md. Code, Labor and Employment § 9-902.

Posted by D. Stephenson Schwinn on 09/02/2015 at 01:59 PM
DefensesDistrict of ColumbiaWorkers CompensationPermalink

Maryland workers’ compensation: causal relationship required to relate a second injury to original

A recent Maryland Court of Special Appeals decision, Washington Metropolitan Area Transit Authority v. Williams, 2012 Md. App. LEXIS 46 (Md. Ct. Spec. App. 2012) has clarified the status of the law in Maryland with respect to the causal relationship required to demonstrate that a second injury (which is not physically related to the original injury, such as where a knee injury causes back pain) is causally related to an original injury, and thereby compensable.

Jan Williams, the claimant, was a mechanic for WMATA and was working for his employer in 2008 when he injured his back and left knee on the job.  In March of 2009, Mr. Williams was injured while returning from lunch to physical rehabilitation for the first injury when a driver backed into him, causing injury to Williams' right knee.  The Maryland Workers' Compensation Commission found the second injury to be causally related to the original injury, and the Maryland Circuit Court for Prince George's County affirmed that finding.  However, the Court of Special Appeals reversed, and found that the second injury was not causally related to the original injury.

WMATA relied upon a 1996 Maryland Court of Appeals decision, Mackin v. Harris, 342 Md. 1 (1996) in support of its assertion that the second injury was not causally related to the original injury.  In Mackin, the employee had slipped and fallen on a patch of ice on his way to obtain physical therapy for a work-related injury.  Id. at p. 2-3.  The Mackin court noted that for a subsequent injury to be compensable, it must be the "direct and material result of a compensable primary injury."  Id. at 7.  The Mackin court went on to note that while Professor Lex. K. Larson, a noted authority in the field of Workers Compensation law, advocated a "but-for causation" approach to the issue, the Mackin court felt this was too broad a standard, and that acceptance of that standard "leads to rather extraordinary results."  Id. at p. 9.

The Williams court found that while the Prince George's County Circuit Court had utilized Mackin in its analysis of the issue, the Circuit Court had missed the fact that the Mackin court advocated for a much more narrow standard-- namely, that the subsequent injury must have been a "direct causal connection" between the original compensable injury and the subsequent injury in order to have been proximately caused by the original injury.  2012 Md. App. LEXIS at p. 11.  Using that standard, the Williams court concluded that Mr. Williams second injury directly resulted from a cause unrelated to the first injury-- namely, the driver's actions in striking Mr. Williams with his car in the parking lot.  Id. at p. 12.  Because the driver's actions had no connection whatsoever to the original injury, there was no proximate cause between the original injury and the subsequent injury.  (Had the same situation been presented using the "but-for" standard of causation, the claim would arguably have been compensable-- as but for the original injury, Mr. Williams would not have been in the parking lot and would not have been struck.)

While the Court reversed the Circuit Court's findings, it remanded the matter in order to resolve a different issue-- whether the subsequent injury would be compensable as a new work-related injury, standing alone.  As such, the matter was remanded to the Maryland Workers' Compensation Commission to determine that issue. 



Posted by Padraic K. Keane on 05/07/2012 at 05:04 PM
MarylandWorkers CompensationPermalink

Virginia Insurance Coverage:  Supreme Court interprets auto policy’s workers compensation exclusion

In Christy v. Mercury Casualty Company, No. 102138 (March 2, 2012), the Supreme Court of Virginia held that an exclusion in an automobile insurance policy barred the insured from receiving any payment for medical expenses where a portion of medical expenses had already been paid by workers' compensation benefits.

The plaintiff police officer was a passenger in a car driven by a Washington County sheriff's deputy.  The car was struck from behind, and the plaintiff sustained a number of injuries.  The parties did not dispute that the accident arose out of and occurred during the course of the plaintiff’s employment with the town.  Among other injuries, the plaintiff’s physician opined that he experienced a tear of the labrum in his left shoulder as a result of the accident, that required surgery.

At the time of the accident, the plaintiff was covered by three different insurance policies.  The Town of Abington obtained its workers’ compensation coverage through the Virginia Municipal League Insurance Programs ("VMLI").  The plaintiff received his primary health insurance coverage through a physician-hospital organization ("PHO").  Additionally, the plaintiff was insured under an automobile liability policy issued by Mercury Casualty Company.  The Mercury policy included coverage for medical expenses incurred as a result of injuries arising out of the use of a motor vehicle.  In relevant part, the policy provided that it did not apply "to bodily injury sustained by any person to the extent that benefits therefor[] are in whole or in part payable under any [workers'] compensation law."

The workers’ compensation insurance carrier, VMLI, paid a portion of the plaintiff's total medical expenses.  However, VMLI denied claims for the plaintiff’s surgery to repair his labrum, asserting that the injury was a pre-existing condition and therefore not compensable under the workers’ compensation policy.  The balance of the plaintiff's medical expenses was either paid or resolved by the plaintiff and the PHO.

The plaintiff subsequently submitted a claim to Mercury demanding payment under the medical expense coverage of his policy.  Mercury denied the claim, asserting that the exclusion provision barred coverage due to the fact that some of the plaintiff’s medical expenses were, in part, payable under workers’ compensation law.

On appeal, the plaintiff argued that the exclusion applied only “to the extent” that some portion of his medical expenses were paid by workers' compensation benefits.  The plaintiff argued that the exclusion acted only to offset any amount actually paid by the workers' compensation carrier, without regard to whether he successfully pursued a claim for all medical expenses.  In doing so, the plaintiff argued that the policy language operates to prevent a "double recovery" by not allowing the insured to receive full payment for medical expenses from both a workers' compensation provider as well as an automobile insurance provider.

Defendant Mercury argued its interpretation of the exclusion, asserting that it excluded all coverage if any portion of plaintiff’s medical expenses were subject to workers’ compensation.

The Court ultimately found in favor of defendant Mercury Casualty, holding that the policy exclusion limited the scope of coverage for medical expenses, rather than the amount of coverage in the form of a set-off against workers’ compensation benefits.  The court noted the fact that VMLI did pay a portion of plaintiff’s medical expenses pursuant to its workers' compensation policy.   The court also noted that there was no dispute over whether the accident arose out of and in the course of the plaintiff's employment.  Accordingly, the Court held that the clear and unambiguous language of the exclusion permitted defendant Mercury Casualty to deny coverage where the expenses were payable under workers’ compensation law.   Thus, the exclusion permitted Mercury Casualty to deny coverage for any expenses which would have been subject to workers' compensation coverage by VMLI without regard to whether all of those expenses were actually paid by VMLI.

Posted by Robert D. Brant on 04/05/2012 at 04:22 PM
InsuranceMotor Vehicle AccidentsVirginiaWorkers CompensationPermalink

Maryland Workers’ Compensation Defense:  Court rejects special mission exception

In Garrity v. IWIF, No. 1185, September Term, 2010 (Md. App. February 9, 2012), appellant was a part-time bailiff at the District Court for Baltimore City, where he was involved in an automobile accident as he was returning to the courthouse.  Appellant had already arrived at work earlier in the morning but realized the tie he was wearing, a Christmas themed tie, was inappropriate for work.  Additionally, shortly after realizing his tie did not conform to his usual work attire, Appellant spilt coffee on his shirt and tie, which prompted him to go home to change.  Believing it was ok to run this errand, Appellant asked the other bailiff assigned to the courtroom to cover for him.  While traveling back from his house to the courthouse, Appellant was struck head-on by another vehicle.  The Workers’ Compensation Commission found that Appellant’s injury arose out of and was in the course of his employment.  A Petition for Review was filed and Appellant attempted to show that his claim was compensable under the special mission and dual purpose exceptions to the going and comings rule, as well as the personal comfort exception.  The Circuit Court for Baltimore City reversed the Commission’s findings and Appellant filed an appeal with the Court of Special Appeal where the Circuit Court’s decision was ultimately upheld.
The special mission exception, first recognized in Maryland in Reisinger-Siehler Co. v. Perry, 165 Md. 191, (1933), is “when an employee is acting in the course of employment when traveling on a special mission or errand at the request of the employer and in furtherance of the employer’s business, even if the journey is one that is to or from the workplace.”  Here, Appellant relied upon the “Policy on Appropriate Attire and Appearance,” which governs Appellant’s dress code at work.  Appellant argued that the policy “mandated” that he leave work and change his shirt and tie once he spilled coffee on them.  The Court of Special Appeals correctly identified that the special mission exception is raised when an employee, acting at the direction of their employer, is injured on the job.  Here, Appellant was not directed by his employer to go home and change his shirt and tie, therefore the special mission exception must fail.  The Court of Special Appeals went further, stating that the policy which Appellant relied upon simply provides “guidance on professional attire,” and is not a mandate requiring employees to leave work when they realize their attire is out of compliance. 
While the Court of Special Appeals determined that the “Policy on Appropriate Attire and Appearance” did not provide express authority to leave work, Appellant contends that it contained implied authority.  In support of this belief, Appellant argued that a liberal policy existed for bailiffs to run errands.  Even if bailiffs were able to run minor errands without authorization, the Court of Special Appeals determined that this practice was never approved or acquiesced to by supervisors.
The dual purpose doctrine, as outlined in Stotskin v. Bd. of Ed. Montgomery County, 11 Md. App. 355 (1997), is applicable when a “trip involves the performance of a service for the employer which would have caused the trip to be taken by someone even if it had not coincided with the personal injury.”  Relying upon this doctrine, Appellant reasoned that because he had his radio with him to monitor courtroom communications and that the dress policy stated that an employee must maintain “a professional and appropriate image . . .,” his injury should be compensable.  The Court of Special Appeals determined that neither express nor implied authority to leave the courthouse without authorization was provided.  Furthermore, Appellant’s decision to take his radio with him could not remedy the situation because if he was needed, there would be no way for him to comply.  The Court reasoned that only if Appellant’s supervisors authorized him to leave and take his radio with him, would the dual purpose doctrine apply.
Appellant also relied upon the personal comfort exception as set forth in King Waterproofing Co. v. Slovsky, 71 Md. App. 247 (1987).  In Slovsky, Claimant was a part-time telephone solicitor who was struck by an automobile while on a paid break.  At the time Claimant was struck, he was crossing the street in order to get food and a drink from a nearby restaurant.  To determine whether Claimant’s injury was compensable, the Court considered whether the Claimant sustained his accidental injury while engaged in some personal comfort activity incidental to his employment.  The Court reasoned that an injury during an off-premises coffee break could easily occur during an on-premises coffee break; therefore, the injury was compensable.
Here, the Court of Special Appeals recognized that in order for the personal comfort exception to apply, there must be some mutual benefit between the employee and employer.  While Appellant believes the personal comfort exception was applicable because he would have been compensated while running personal errands, this activity was neither encouraged nor accepted by his supervisor and his argument must therefore fail.
The Court of Special Appeals affirmed the Circuit Court’s ruling finding that Appellant did not suffer a compensable injury arising out of and in the course of employment.

For further information concerning the defense of Maryland workers' compensation matters, call  Steve Schwinn at 703-246-0900.

Posted by Mark Kopelman, Associate on 03/11/2012 at 01:31 PM
MarylandWorkers CompensationPermalink

Employee’s disclaimer of third party tort action against employer’s customers upheld by D.C. Court
In Brown v. 1301 K Street Limited Partnership, No. 09-CV-695 (D.C. Nov. 23, 2011), the D.C. Court of Appeals upheld the validity of a disclaimer signed by a security guard, in which she agreed that her workers' compensation benefits from her employer would be her sole remedy and that she waived any rights she had to make a claim against her employer's customers arising from injuries covered under the Workers' Compensation statutes.

The wording of the disclaimer was as follows:
I understand that state Workers' Compensation statutes cover work-related injuries that may be sustained by me. . . . As a result, and in consideration of Allied Security offering me employment, I hereby waive and forever release any and all rights I may have to:

- make a claim, or

- commence a lawsuit, or

- recover damages or losses

from or against any customer (and the employees of any customer) of Allied Security to which I may be assigned, arising from or related to injuries which are covered under the Workers' Compensation statutes.

The plaintiff had slipped on a wet floor while working as a security guard for Allied Barton Security, which had a contract with the building owner and property manager to provide security services. Plaintiff received a lump sum workers' compensation settlement for her injuries, and then filed suit against the building owner and property manager. In her action, she alleged negligence, OSHA violations, and violation of the D.S. Industrial Safety Act.

The defendants were granted summary judgment on the basis of the above disclaimer, and the plaintiff appealed.

On appeal the plaintiff argued that the disclaimer was invalid because it is an agreement to forego her right to compensation under the D.C. Workers' Compensation Act. The Court rejected that argument, because the disclaimer did not purport to limit in any way the plaintiff's right to compensation under the Act.

The Court also rejected the plaintiff's argument that the disclaimer was too general, finding that the parties' intent is clear from the face of the disclaimer.

The Court rejected the argument that the disclaimer violated public policy. The Court has previously invalidated only a few exculpatory clauses on public policy grounds: an exculpatory clause in a will that excused self-dealing by the personal representative; and an exculpatory clause in a lease the excused the landlord's obligations under the implied warranty of habitability. However, the Court found "nothing violative of public policy in an employer's choice to protect its customers from liability for workplace injuries, choosing instead to compensate its employees itself exclusively through workers' compensation."

Finally, the Court rejected the plaintiff's argument that the disclaimer violated the public policy underlying the OSHA and ISA statutes. The Court noted that those statutes are not strict liability statutes, but are analogous to negligence in that they establish standards of care. "Although releases purporting to limit liability for gross negligence, willful acts, or fraud will not be enforced, releases are viable and enforceable when they limit liability for ordinary negligence."

This case illustrates that the Courts are willing to allow businesses to structure their relationships to apportion risk, at least where negligence claims are concerned. Here, the security company may end up paying higher workers' compensation insurance premiums than it would without the disclaimer. On the other hand, the security company can adjust its fee structure to account for its insurance costs.

Posted by David B. Stratton on 01/16/2012 at 11:19 PM
DefensesDistrict of ColumbiaWorkers CompensationPermalink

Tolling the statute of limitations for change-in-condition applications under Virginia Act
In Ford Motor Company v. Gordon, 281 Va. 543, 708 S.E. 2d 846 (2011), the Court considered the proper interpretation of Va. Code sec. 65.2-708(A) and 65.2-708(C), which govern the tolling of the statute of limitations for filing a change-in-condition application for workers' compensation benefits. The Court held that the Code sec. 65.2-708(A) statute of limitations runs anew under each successive award of compensation for a particular compensable injury and is triggered on the last day for which compensation was paid. The Court also held that Code sec. 65.2-708(C), by providing for wages meeting certain prescribed conditions to be treated as compensation under sec. 65.2-708(A), applies to each such award.

The effect of these statutes is best understood by their application to the facts of the Gordon case. The claimant sustained a compensable injury in Ford's plant in Norfolk, Virginia on January 9, 2000. Based on this injury, the Commission entered a series of awards of compensation to Gordon for various periods of TTD and PD. The last of these awards was entered on January 13, 2003, which was an open-ended award for TTD. Gordon received his last payment under this award on February 23, 2003. Thereafter, between periods of TTD, he worked in light duty positions for Ford. He worked light duty from October 23, 2000 to January 3, 2001; from April 1, 2002 through June 30, 2002, and from April 20, 2003 through September 11, 2006, earning wages equal to or higher than his pre-injury average weekly wage. On September 11, 2006, he was temporarily laid off from his position at Ford because the plant was shut down for production reasons, and he filed a change-in-condition application on September 25, 2006, seeking TTD benefits based on lost wages caused by this change in condition.

The Court's holding meant that because Gordon worked in a light-duty capacity for Ford from April 2003 through September 11, 2006, and was paid wages equal to or greater than his pre-injury wage, under Code sec. 65.2-708(C), the wages that Ford paid to Gordon during the first 24 months must be considered "compensation" for purposes of tolling the statute of limitations under Code sec. 65.2-708(A). Accordingly, since the application for benefits was made within 24 months after the last day for which compensation was paid, the application was timely.

Subsequent to the Gordon decision, the Virginia Court of Appeals has applied Gordon in Prince William County School Board and VML Insurance Programs v. Rahim, No. 1737-10-2 (Va. App. July 12, 2011). There, the Court held that in a case where the Commission had entered a "medical-only" award, under Code secs. 65.2-708(A) and 708(C), the claimant had 24 months from the last day compensation was paid either pursuant to an award or pursuant to the requirements of subsection C within which to file a change-in-condition application. In so ruling, the Court distinguished Mayberry v. Alcoa Bldg Prod., 18 Va. App. 18, 441 S.E.2d 349 (1994), and limited that decision to its facts, on the grounds that in Mayberry, there had been no formal award entered by the commission, and voluntary payment of medical expenses by the insurer is not the payment of compensation which tolls the running of the statute of limitations.

Posted by David B. Stratton on 01/16/2012 at 08:49 PM
VirginiaWorkers CompensationPermalink

Virginia Workers Compensation:  Court affirms successful res judicata defense
In Brock v. Voith Siemen Hydro Power Generation et al., No. 0428-11-3 (Va. App. Nov. 1, 2011), the Court affirmed a decision by the Virginia Workers Compensation Commission that the claimant was barred by res judicata from litigating injuries he alleged in his initial claim but did not raise at his evidentiary hearing.

As a result of a work injury, Brock filed a workers' compensation claim seeking benefits for injuries to his shoulder, back, and hips. He later amended his claim to allege additional injuries to his head and leg. A deputy commissioner scheduled a hearing and advised Brock's counsel that all issues will be considered at the upcoming hearing. Brock's counsel requested a continuance, and the hearing was continued for more than three months.

At the hearing, Brock and the employer stipulated that he had injured his left shoulder. Brock, who was represented by counsel, produced no evidence of his other injuries. Significantly, Brock also did not request additional time to obtain evidence, did not ask the deputy commissioner to hold the record open to later consider the other injuries, did not seek to withdraw any part of his claim, and did not ask the deputy commissioner to defer for later determination issues which were unripe for adjudication.

The deputy commissioner entered an award for benefits for the stipulated injury to the left shoulder, and dismissed the claim. Neither party appealed the order to the full commission.

Months later, Brock, proceeding pro se, filed a claim seeking benefits for injuries to his back, head, shoulder, leg, and hip arising out of the same workplace accident. At a hearing for these claims, the employer argued that these claims had been abandoned and argued that they could not be properly considered. The deputy commissioner held that Brock had abandoned the claim for injuries beyond the stipulated left shoulder injury, but declined to apply res judicata, instead finding that the abandonment was in effect a non-suit.

The employer appealed to the full Commission, arguing in part that the doctrine of res judicata barred the claims for the other alleged injuries. The Commission agreed that res judicata barred Brock's allegedly new claim for injuries. Brock then appealed the Commission's decision.

The Court of Appeals affirmed the Commission, noting in pertinent part that claims precluded by res judicata include those "made or tendered by the pleadings" as well as those "incident to or essentially connected with the subject matter of the litigation, whether the same, as a matter of fact, were or were not considered." The Court noted that these res judicata principles apply to workers' compensation cases.

The Court observed that on appeal, Brock "simply asserts the right to litigate the case on an injury-by-injury basis at separate hearings with each resulting in separate award orders." The Court rejected that argument, stating, "Like the commission, we are unaware of any 'conceivable public policy which would be furthered by such piecemeal adjudication of claims.'"

This case illustrates the importance of claimant's counsel taking formal steps at a workers' compensation hearing to preserve claims which may not be ready for adjudication.

For employers, insurers, and their defense counsel, this case underscores that in any file where the employee is alleging additional injuries arising out of an accident which has already resulted in an award, it is important to fully understand what issues were raised in the prior proceeding, what issues were decided, and what issues were preserved for later adjudication.

Posted by David B. Stratton on 01/16/2012 at 03:41 PM
VirginiaWorkers CompensationPermalink

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