(Note: The Alabama Court of Civil Appeals withdrew its opinion of July 17, 2009 and substituted it with the opinion summarized below)

G.A. West & Co. v. Ricky McGhee: 

On January 29, 2010, the Alabama Court of Civil Appeals released this opinion in which it reconsidered a previous opinion. Specifically, the Court addressed whether the trial court properly calculated the AWW and whether or not a permanent and total award was proper. At trial, the employee introduced evidence that he was injured on his second day of work. Since the employee was a welder and iron worker and did not work consistent work weeks throughout the year, the judge determined that the 3 methods for calculating an AWW provided in the Code were not applicable. Therefore, the judge also considered the testimony of a co-worker who explained how much the employee would have worked had he not been injured and arrived at an AWW he considered just and fair to both parties. The Court of Civil Appeals agreed that the judge was allowed to depart from the 3 methods provided for in the Code. However, the Court reversed the trial court’s method because it resulted in giving the employee his best case scenario. Such a result could not be considered just and fair to the employer.

The employer also appealed the permanent and total award based on its vocational expert’s testimony that jobs were available. The Court upheld the trial court on that issue since the plaintiff’s vocational expert rendered the opposite opinion and it was within the trial court discretion to weigh the credibility of the testimony.

The employer also sought a reversal based on certain affirmative defenses. First, it asserted that the employee was guilty of a willful safety rule violation by not wearing the safety harness at the time of the subject accident. The Court refused to reverse the trial court based on that defense because the employee was not provided notice of the defense until six days before trial. Second, the employer asserted that the employee did not meet the definition of "permanent and total" because he refused to undergo vocational retraining or to accept a reasonable accommodation. The Court refused to reverse based on that defense because it was not asserted until the day of trial. Third, the employer asserted that the employee did not meet the definition of "permanent and total" because he refused reasonable medical treatment. Since that defense was not asserted during the trial at all, the Court refused to consider it. 

Practice Pointer:  The Code provides three methods to calculate an AWW. First, you take the total wages (and employer paid fringe benefits) earned in the 52 weeks prior to the injury and divide it by 52. Second, you take the total amount as set forth above and divide it by the actual number of weeks worked. Third, you take the AWW of a similarly situated employee. In the above case, the employer offered the testimony of such an employee but could not establish to the judge’s satisfaction that the employee was, in fact, similarly situated to the plaintiff. It is important to make sure that you can establish such a foundation or the testimony may be ignored. In addition, it is important to assert all available affirmative defenses in your answer and in the form of amended answers as soon as those defenses become known. Such defenses should become part of your trial stipulations which should, in turn, be part of your trial brief and/or asserted at the commencement of the trial.

In December of 2009, Medicare filed a lawsuit in the U.S. District Court for the Northern District of Alabama seeking to recover conditional payments it made to medical providers on behalf of the plaintiffs involved in a $300 million global settlement. The lawsuit cites Medicare Secondary Payer provisions in federal law that allow Medicare to recover past and future medical expenses from all parties, insured and self-insured, involved in a liability claims award or settlement that includes Medicare eligible individuals.

The settlement was entered into in 2003. By filing the lawsuit some 7 years later, Medicare is indicating that it is willing to reach back and go after any medical costs it considers owed. Of interest, is that Medicare simultaneously named insurers, settlement beneficiaries and plaintiffs attorneys in one lawsuit. This means that if Medicare’s interests are not considered, all parties to a settlement are left exposed to an action for recovery by Medicare.

My Two Cents:

At this point, Medicare appears to only be focusing on the big multiparty settlements where it stands to recover at least seven figures. However, you cannot ignore the fact that Medicare may have the resources and manpower to pursue the smaller settlements several years down the road. With the new mandatory reporting requirements in place, we are now all on Medicare’s radar!

Lana Brown v. Korner Store:

On April 17, 2009, the Alabama Court of Civil Appeals released an opinion which had the affect of dispensing with the "arising out of" part of the two part causation test. In essence, the Court stated that if you are at work ("in the course of") when the accident occurs, then your injury is compensable. This is known as the "but for" test and is the test for causation in some states. However, the Alabama Workers Compensation Code specifically provides for a two part test. The employer petitioned the Alabama Supreme Court to review the case and, fortunately, the Supreme Court just recently agreed to accept the matter. We will continue to monitor the situation and keep you posted as to all developments.

James Nichols v. Material Delivery Services, Inc.:

On January 15, 2009, a Shelby County jury returned a verdict against an employer and assessed $75,000.00 in compensatory damages and $225,000.00 in punitive damages. At trial, it was the position of the employee that he was fired solely in retaliation for filing a workers’ compensation claim which is not allowed in Alabama. It was the position of the employer that he was actually fired for waiting 6 hours to report his injury and not solely because he made a workers’ compensation claim. The employer has 42 days from the date of the verdict to file an appeal.

G.UB.MK Constructors and Eric Leslie v. Darlene Garner, as administratrix of the estate of Wendell Garner, deceased:

On January 8, 2010, the Alabama Supreme Court released this opinion wherein it reversed a jury verdict in favor of the plaintiff based on the Special-Employment Doctrine. At trial, the evidence revealed that the individually named defendant ("Leslie") was hired by GUBMK for the sole purpose of being sent to TVA as "staff augmentation." Leslie worked exclusively on TVA property and, pursuant to a required "labor agreement," was subject to the direct supervision and control of TVA. Leslie used equipment that was owned and operated by TVA. Although paychecks were drawn from a GUBMK bank account, the amount was calculated from information provided by TVA. Workers’ compensation insurance was provided and paid for by TVA and TVA could direct Leslie’s dismissal. On the day of the accident, Leslie was driving a TVA truck and assisting the plaintiff who was an actual TVA employee. Leslie accidentally backed over the plaintiff with the truck causing the plaintiff’s death. As a result, the plaintiff’s estate sued GUBMK and Leslie for negligence. At trial, the jury returned a verdict in the amount of $525,000.00. The defendants appealed asserting that Leslie was a "special employee" of TVA on the day of the accident. As such, he was a co-employee of the plaintiff and could not be sued for negligence based on the exclusivity doctrine of the Alabama Workers’ Compensation Act.

The Court agreed with the defendants and reversed the jury verdict with instructions that judgment be entered in favor of the defendants. In support of its decision, the Court noted that the substantial and unrebutted evidence at trial was that an implied contract existed between Leslie and TVA, that Leslie was performing TVA’s work on the night in question, and that TVA had the right to control the details of Leslie’s work.

Marvin Jackson v. Delphi Automotive Systems:

On January 8, 2010, the Alabama Court of Civil Appeals released this opinion wherein it considered the Statute of Limitations defense. At the trial court level, the defendant filed a motion for summary judgment because the applicable 2 years had run by the time the plaintiff filed his verified lawsuit. In response, the plaintiff asserted that the limitations period was tolled because he received full wages despite the fact he was working in a limited capacity. The argument being that the difference between what he was receiving and what he was actually owed by is employer constituted indemnity benefits. In Alabama, the 2 year limitations period for accidental injuries begins on the date of the accident or on the date of the last indemnity payment. An amended complaint was also filed which attempted to relate subsequent problems back to the original injury. The trial judge granted summary judgment asserting that all counts were time barred.

On appeal, the Court noted that payment of full wages to an employee on restricted duty could be considered "payments of compensation" in certain situations. In order to prevail on that theory, the plaintiff would have the burden of proving at trial that (1) the employer was aware (or should have been aware) that such payments constituted indemnity payments, (2) the payments had the effect of recognizing the workers’ compensation claim, and (3) the employer paid for more than he received.

Although the plaintiff has the burden of proof at trial, the burden was on the employer at the summary judgment stage. The Court reversed the trial court because the employer did not meet that burden. In addition, the Court did not feel summary judgement was appropriate on the issue of whether or not the claims presented in the amended complaint related back to the date of the original accident.

My Two Cents:

If you have work available that meets an employee’s restrictions, make sure that you do not pay that employee more than what he should be receiving (more than what he would be receiving had the accident never happened). It might also be a good idea to have the employee sign an acknowledgment that he is receiving wages as opposed to indemnity benefits.

Recently the matter of St. Joseph’s Hospital , et al., v. Ward, came before the Georgia Court of Appeals. Ward, a nurse, was at work at the hospital when she stood and turned to get a glass of water for a patient, at which point her knee “twisted” and gave out. An Administrative Law Judge (ALJ) found the injury compensable. She attempted to return to work but was unable to complete her duties. Ward then attempted light duty work before she went out for right knee replacement surgery. 

St. Joseph’s appealed the decision of the ALJ to the State Board Appellate Division, whereupon the decision was reversed. The Board concluded that Ward was not exposed to any risk unique to her employment by standing and turning. She would have been “equally exposed” to the risk whether or not she had been at work and therefore the injury was deemed not compensable because there was no casual connection between her injury and her employment. 

Ward appealed this decision to the Superior Court which reversed the State Board’s decision. St. Joseph brought their appeal to Georgia Court of Appeals, in which the court sided with St’ Joseph’s.  For an on-the-job injury to be compensable the injury must not only occur during work ours, it must also “arise out of” and be in the course of the employee’s work duties. Ward has applied for certiorari to the Supreme Court of Georgia but it has not yet been granted at this time.