KGS Steel, Inc. v. Donald McInish: 

On June 26, 2009, the Alabama Court of Civil Appeals considered the trial court’s finding of medical causation for a second time.  In the case, the employee claimed to have sustained a cumulative physical stress injury to his neck and shoulders while employed as a truck driver by KGS Steel, Inc.  The first time, the Court of Civil Appeals reversed the trial court after reweighing the evidence presented at trial and determining that the employee’s case did not satisfy the clear and convincing proof standard of evidence, which is required in order to prevail in a workers’ compensation claim based on an injury caused by cumulative physical stress.  In its ruling, the Court of Civil Appeals also implied that proof of medical causation is solely dependent upon the presence of expert medical testimony.  However, the Supreme Court of Alabama reversed and remanded the Court of Civil Appeals with regard to reweighing evidence and establishing medical causation. The Supreme Court stated that an appellate court cannot reweigh evidence presented to the trial court. Rather, the appellate court’s role is to determine whether the trial court’s findings of fact are supported by substantial evidence with due regard to, and respect for, the appropriate level of evidentiary proof required, which in this case is clear and convincing proof. The Supreme Court also stated that "totality of the evidence" standard applies to workers’ compensation cases, which means that lay and expert, as well as circumstantial evidence, must be considered.      

In its second opinion, the Court of Civil Appeals still reversed the trial court’s finding of medical causation; however, the Court incorporated the instructions from the Supreme Court.  After reviewing all circumstantial evidence, lay testimony, and expert testimony, the Court of Civil Appeals ruled that the trial court could not have reasonably concluded with firm conviction that the employee’s job duties at KGS Steel, Inc. caused or contributed to the neck and shoulder injuries claimed by the employee. 

It should be noted that Judge Pittman dissented on the grounds that he agreed with the trial court’s conclusion. 

Christopher Hatch v. NTW Incorporated, d/b/a/ National Tire and Battery Company:

On June 19, 2009, the Alabama Court of Civil Appeals affirmed the trial court’s Order granting the Employer’s Summary Judgment Motion as to the retaliatory discharge portion in the workers’ compensation claim. The employer was terminated due to the expiration of his 3 months of leave time (FMLA) pursuant to company policy. These 3 months consisted of time the plaintiff was off for the on the job back injury. In fact, the 3 months expired approximately 7 days after the employee was placed at MMI. The Court of Appeals held the plaintiff could use circumstantial evidence to establish a prima facie case for retaliatory discharge pursuant to Alabama case law. However, the proximity of the termination to the MMI date, the decision maker’s knowledge of the compensation claim, the supervisor’s attempt to contact the doctor, allowing an employer to work light duty for a period despite the lack of company policy, and having the reason for termination expressed two different ways but both indicating termination was due to the expiration of leave time was not enough circumstantial evidence to establish the compensation claim was the sole motivating factor for the termination.

As was previously discussed on the blawg (http://www.alabamaworkerscompblawg.com/template_permalink.asp?id=144 ) work continues in Congress in opposition to the possible federalization of Workers’ Compensation laws.  

There was an attempt to push the bill, H.R. 635, through Congress via the Suspension Calendar (which is an expedited procedure that is generally used for non-controversial measures), but this was blocked after many people contacted their Congressional delegation. Because of the calls and emails, the bill’s supporters got the message that they could not advance this bill through an expedited process.  The Chamber and other groups are continuing the grassroots effort to educate their members, and the public about this harmful bill. 

However, H.R. 635 could be included as an amendment to a larger piece of legislation, like health care or OSHA reform. Doug Holmes, President of UWC – Strategic Services on Unemployment and Workers’ Compensation, along with AIA, and the Property Casualty Insurance Association of America (PCI), drafted a resolution opposing H.R. 635 which will be offered for approval at the annual meetings of the National Conference of Insurance Legislators (NCOIL) and the American Legislative Exchange Council (ALEC) this summer.  The National Federation of Independent Business (NFIB) has similarly been preparing a resolution opposing H.R. 635 for consideration at the ALEC meeting. In addition, Bruce Wood, Associate General Counsel, American Insurance Association (AIA), will be speaking on a panel specifically addressing H.R. 635, at an American Association of State Compensation Insurance Funds conference in Washington, D.C.

Work continues to be done in opposition to H.R. 635 and members of Congress continue to be educated about this bill and the detrimental effects it will have on state workers’ compensation systems.

The National Conference of Insurance Legislators (NCOIL) will consider a working draft of the Employee Misclassification Workers' Compensation Coverage Model Act, as sponsored by Rep. Charles Curtiss (TN) when it meets on July 10^th at the 2009 NCOIL Summer Meeting. The model attempts to address workers' compensation issues caused by employee misclassification and independent contractor status. It presumes the employment status of an injured worker unless he/she can meet a nine-point test to be exempt from coverage requirements as an independent contractor. It also requires construction industry independent contractors with any employees to carry coverage. Much of the model is based on the Florida statute, with the exception of the independent contractor definition, which uses a Wisconsin nine-point test to establish independent contractor status. The model includes language addressing a number of the ongoing issues surrounding the definitions of "employer", "employee" and "independent contractor" that are also addressed by taxing agencies such as the IRS, Unemployment Insurance, and the Federal Labor Standards Act, and regulated by Secretaries of State and Departments of Commerce among others. If adopted by NCOIL, this model would likely begin to serve as a reference for state workers’ compensation "reform" proposals.

In a recent article in the Insurance Journal, it was noted that the economic downturn has resulted in a rise in workers’ compensation fraud. According to a senior special agent for the National Insurance Crime Bureau, people stay out longer on claims and multiple body parts are reported in the same claim. This of course increases treatments and costs. Employees are litigating rather than settling which requires more testing and lab work. In addition, employees are now choosing to expand the claim. For example, a toe injury leads to sleep therapy, which leads to sexual dysfunction. Acording to the NICB, there has also been a significant trend in medical identity theft and provider fraud. To read the full article, visit: http://www.insurancejournal.com/news/national/2009/04/14/99585.htm.

Matthew’s Masonry Company v. Edward Aldridge, Jr.:

On June 5, 2009, the Alabama Court of Civil Appeals considered the trial court’s interpretation of certain settlement language for a second time. The first time, the Court reversed the trial court because it failed to consider the affect of settlement language that specifically settled future medical care for the right and left knees. On remand, the trial court heard oral arguments on the issue and issued an Order stating that the settlement agreement was ambiguous because it could possibly mean to only exclude future medical care for injuries to the knees in existence at the time of the settlement. The trial court went on to state that, since the knee injuries could have developed after the settlement agreement as a result of an altered gait created by the back injury for which medical benefits were still available, medical benefits remained available for the new post-settlement injuries. On appeal for the second time, the Court of Civil Appeals ruled that, in the absence of fraud, a workers’ compensation settlement supported by valuable consideration and unambiguous in meaning, will be given effect according to the intention of the parties. In this case, the fact that future medical care for both knees was specifically set forth in the settlement agreement made it unambiguous and, as such, outside evidence was not admissible to question the settlement terms. The settlement agreement stated that future medical benefits were closed for the knees and, therefore, no further benefits were available. 

Practice Pointer:     If you intend to leave medical benefits open for a specified body part, then it is important to state this intention in the settlement language. In Alabama, if it can be shown that an employee develops subsequent injuries that are the "direct and natural consequence" of the covered injury, then the new injury may also be covered. This is known as the Successive Compensable Injury Test. It may be possible to eliminate exposure for such future conditions by specifically excluding such future injuries or conditions in the settlement language even if you are leaving medical benefits open.