The AWCO will be putting on its 31^st Annual Spring Conference on May 3^rd and 4^th at the Wynfrey Hotel in Birmingham, Alabama. This is always a great conference with a wide array of speakers from the legal and medical communities addressing numerous topics affecting workers’ compensation claims in Alabama. There will also be a Workers’ Compensation 101 and 102 class on May 3^rd that is designed for adjusters that are new to handling workers’ compensation claims in Alabama.

Registration beings at 7:00 a.m on May 3^rd and the conference ends at 12:00 pm on May 4^th. If you are interested in attending or know someone that is, please contact the AWCO President, Henry Levens, and he will send you a conference brochure and registration sheet. His e-mail address is Henry.Levens@willis.com.

On December 31, 2011, this Blawg addressed proposed legislation that would substantially change the Alabama Workers’ Compensation Act. As an update, SB 77 was referred to the Senate Business and Labor Committee. At the request of the Alabama Trial Lawyers Association, Committee Chair, Rusty Glover, has scheduled a public hearing for February 22, 2012 at 9:00 a.m. in room 610.

To be continued...

Representative Paul DeMarco (R) of Birmingham, has introduced HB 104 seeking to amend §25-5-51 of the Alabama Workers’ Compensation Act. HB 104 relates to injuries caused by an employee who is impaired by drugs or alcohol. As initially drafted, the billed would have prevented an employee, or the employee’s estate, from receiving medical and indemnity benefits if the injury or death was the direct result of impairment or intoxication caused by the employee’s alcohol consumption or drug use. The bill then provided that, once the employee had a positive drug or alcohol screen according to the U.S. Department of Transportation, the burden would be on the employee to demonstrate that the impairment was not the cause of the injury or death.

Unfortunately, the bill was weakened by two amendments added by the House Judicial Committee. In addition, the Medical Association added an amendment that requires an employer to notify a medical provider in writing if the employee was guilty of a drug or alcohol offense thus ending the coverage through the employer.

The Trial Lawyers Association further weakened the bill with its amendment requiring the employer to petition the court once a positive drug or alcohol screen is received for a determination on whether medical and indemnity benefits can be terminated. Medical benefits would be due until the date the Court ruled they were no longer owed as a result of the positive drug screen. At the hearing, if the test resulted in a blood alcohol level equal to or greater .08 as stated in §32-5A-191 (a)(1) of the Alabama Code, there would be a rebuttable presumption that the employee was impaired. If conclusively established that the employee was impaired and the employee proves by a preponderance of the evidence that the impairment did not proximately cause or contribute to the accident, then the Court could deny the petition filed by the employer. If only rebuttably presumed impaired and the employee proves by a preponderance of the evidence that a) he or she was not impaired, or b) though impaired, the impairment did not proximately cause or contribute to the accident, the Court may then deny the employer’s petition. If the employee was given written warning that the refusal to submit to or cooperate with testing would result in the forfeiture of benefits, the employer’s responsibility to pay compensation and medical benefits would terminate as of the date of the refusal.

With the two amendments the bill gained committee approval and is awaiting further action by the House. We will continue to monitor the status of this bill during this legislative session.

On February 10, 2012, the Alabama Supreme Court released it opinion in Ex parte Water Works and Sanitary Sewer Board of the City of Montgomery wherein it ruled that the Alabama Insurance Guaranty Association (AIGA) has a six year statute of limitations to seek reimbursement from a high net worth insured. In this case the Water Works and Sanitary Sewer Board of the City of Montgomery (hereinafter Board) was insured by an insurance company that went insolvent (Legion). The insurance company was, however, a member insurer of the AIGA. Therefore, in July 2003, the AIGA took over the claim filed by the Board’s employee related to an injury that occurred in 2001. In November of 2003 the claim was settled and paid by the AIGA.

On October 7, 2003, AIGA sought to determine the Board’s net worth pursuant to the AIGA Act, which states that the AIGA can seek reimbursement from any insured whose net worth exceeds twenty-five million dollars. After several attempts the Board finally responded to the net worth request in August of 2009 stating that its net worth exceeded twenty-five million dollars. AIGA filed the underlying declaratory judgment action seeking to enforce its right to reimbursement. The Board took the position that the AIGA’s claim was limited to payments made within two years of filing the action based on a two-year statute of limitations. The AIGA took the position that the claim was subject to a six year statute of limitations. The trial court awarded the AIGA amounts paid on the claim during the two years immediately prior to the declaratory judgment action. The AIGA appealed and the Court of Civil Appeals ruled that the action did not sound in tort or contract but was a statutory right to reimbursement similar to a common law action of debt subject to the six year statute of limitations. The Board petitioned the Alabama Supreme Court.

The Alabama Supreme Court affirmed the Court of Civil Appeals’ decision and held the claim filed by the AIGA was subject to the six year statute of limitations not the two year statute of limitations. The Supreme Court opined that the action was a statutory right permitting the recovery of a liquidated sum. This claim would therefore fall under actions for the recovery of money upon a loan pursuant to §6-2-34 (5), which states "actions for the recovery of money upon a ... liquidated account" are subject to a six year statute of limitations. The case was remanded to the trial court for a determination based on the application of the six year statute of limitations.

The Alabama Court of Civil Appeals recently released its decision in the case of G.A. West & Co., Inc. v Claiborne Johnston. On Thursday, September 14, 2006, Johnston stepped into a ditch, and either slipped on a pipe or lost his balance. Johnston was able to right himself before he fell, but he allegedly felt an excruciating pain in his lower back, hips and thighs. Johnston testified that he immediately yelled out in pain, and that he told his supervisor, Dale Clements (who was in the ditch with Johnston at the time), that he had hurt his hips when he slipped. Johnston finished his shift that day, and was off work the next 3 days. When he returned to work on Monday, Johnston told Clements that he was still hurting from the incident and needed to see a doctor. According to Johnston, Clements did not respond, so Johnston called Dr. William Bose. Dr. Bose had previously performed two hip replacement surgeries on Johnston in 2002 and 2005. Dr. Bose examined Johnston and determined that he had not injured his hips, and referred Johnston to Dr. James West. Dr. West had previously treated Johnston for a fractured coccyx due to injury in 2005 with another employer, and had assigned a 5% impairment rating to Johnston’s body-as-a-whole as a result of that injury. According to Dr. West, Johnston suffered a new injury to his lumbar spine as a result of injury at G.A. West & Co.

A year after the injury, Johnston went to the office of G.A. West’s company nurse, and told her that he had suffered an injury the prior year. He further told the nurse that he first thought the injury was related to his hips or his coccyx, but had since learned it was related to his lumbar spine. Johnston asked G.A. West to consider paying for his treatment. G.A. West declined, and Johnston filed a lawsuit seeking permanent and total disability benefits. G.A. West & Co. asserted that it did not have proper notice of the alleged injury; that Johnston had knowingly and intentionally misrepresented his physical condition in writing at the time he entered into the employment relationship; that Johnston had deliberately concealed a work related injury; that Johnston had a pre-existing condition that accounted for some of his disability; and that Johnston was not permanently and totally disabled because he was capable of being vocationally retrained. The trial court found in favor of Johnston on all issues, and G.A. West & Co. appealed on all of the above grounds. A very brief analysis of each of the issued raised on appeal by G.A. West is below.

Misrepresentation

When Johnston was hired, he completed a pre-employment questionnaire that asked if he had any prior on-the-job injuries, other injuries or illnesses, or was taking any prescription medications. Johnston admitted that he had injured his coccyx in April of 2005 and had been assigned a 5% impairment rating. However, he answered "no" to the remaining questions, although he was taking Mobic regularly and had two previous hip replacement surgeries. Additionally, a 2005 MRI of Johnston’s back revealed bulging discs at the L4-5 level of Johnston’s lumbar spine, and medical records obtained through discovery indicated that Johnston had complained of back pain for more than 20 years. Based on this, G.A. West & Co. argued that Johnston was barred from recovering benefits under § 25-5-51 of the Alabama Workers’ Compensation Act, because he misrepresented his physical condition at the time he was hired. The appellate Court noted that in order to prevail on that defense, G.A. West & Co. had the burden of proving that in the course of entering into the employment relationship, G.A. West provided Johnston with the written warning set forth in § 25-5-51, Johnston knowingly and falsely misrepresented his physical condition in writing, and that condition was aggravated or reinjured in an accident arising out of and in the course of Johnston’s employment. The Court noted that while Johnston had a history of back issues, the evidence did not establish that Johnston was ever informed that he had any serious back related injury or illness. Additionally, the Court failed to find any causal connection between Johnston’s use of prescription medications or his prior hip replacement surgeries and his September 2006 injury that would predispose him to further injury. As such, the Court found that G.A. West failed to meet its burden of proof on the misrepresentation defense.

Notice

While it was undisputed that Johnston failed to give written notice as provided under the Act, the Court found that G.A. West had oral notice sufficient to cause it to investigate the alleged accident further. The Court noted that since Johnston’s supervisor was with him and witnessed the alleged accident, G.A. West had sufficient notice that work-related activity prompted Johnston’s exclamation of pain.

Estoppel

On appeal, G.A. West argued that Johnston was estopped from recovering workers’ compensation benefits because he deliberately concealed his work-related injury. The appellate Court found that G.A. West failed to raise that issue before the trial court. Relying on precedent set in Dueitt v. Scott Paper Co., 695 So.2d 40, 44 (Ala.Civ.App. 2004), the Court of Appeals stated that it could not consider an issue that had not been properly raised in the trial court.

Pre-Existing Condition

G.A. West argued that the trial court erred when it failed to allocate at least a portion of Johnston’s alleged disability to his previous injuries pursuant to § 25-5-58 of the Act. However, the appellate court noted that "the law presumes that there is no preexisting injury or infirmary when the employee is able to fully perform his or her job duties in a normal manner prior to the subject injury." As such, the appellate court found that the trial court’s findings were based on substantial evidence.

Causation

G.A. West further argued that Johnston failed to establish medical causation of his injury, because Dr. West could not state with any certainty that Johnston’s herniated disc was caused by the September 2006 accident. The appellate court noted medical causation may be established by a combination of lay testimony and expert medical testimony. Since Dr. West considered the accident to be the cause of Johnston’s injuries, and Dr. West testified that Johnston’s injuries were potentially compatible with an accident like Johnston’s, the trial Court had substantial evidence on which to base its finding of compensability.

Permanent & Total Disability

Finally, G.A. West argued that Johnston was not permanently and totally disabled because he was capable of being vocationally retrained. In support of its argument, G.A. West pointed out that Johnston had been employed by various employers since the accident; that Dr. West had only restricted Johnston to the light to medium job categories; that Dr. West did not testify that Johnston was incapable of working; Johnston had a commercial drivers’ license; and Dr. West agreed with Johnston’s plan to find work as an equipment operator. Johnston, on the other hand, testified that he couldn’t perform the equipment operator jobs without pain; he had to nap during the day because he slept poorly at night due to pain; he had performed manual labor jobs all of his life; and he only had a tenth grade education. The Court of Appeals found that the trial court could have implicitly found that Johnston was incapable of being retrained for gainful employment due to his pain, sleep difficulties, and limitations on standing, sitting, and walking. The Court further pointed out that an employee doesn’t have to be completely helpless to be permanently and totally disabled, but only must be unable to maintain employment similar in remuneration.

Re-posted (in part) with permission from Kansas WC defense attorney, Kim Martens (Hite, Fanning & Honeyman, L.L.P., Wichita, Kansas)

As an employer, you probably have been frustrated at one time or another with your State’s workers’ compensation system and what it has put you through. However, have you ever really considered what would/could happen to you as an employer if the workers’ compensation system was NOT the exclusive remedy for the injured worker’s claim, and what you as an employer would be put through if you were subjected to a civil tort suit for that injured employee’s work accident claim?

It’s happening right now, in several States in the "undocumented worker injury claim" context. A number of States are toying with the idea of enacting State laws totally banning undocumented injured workers from receiving benefits through the state workers’ compensation system.

This question will be explored by a panel of experts at in the upcoming American Bar Association’s National Trends And Emerging Issues Affecting Workers’ Compensation Laws Seminar in San Antonio, TX at the Westin Riverwalk Hotel, March 8-10. At 3 p.m on March 8th, the panel of experts will explore the following topic: "A telescopic look at a PARALLEL UNIVERSE for undocumented injured worker claims—is the civil tort claim alternative to workers’ compensation benefits BETTER or WORSE for employers, carriers and injured workers?"

If you as an employer thought a defense legal cost tab of $10,000 to $15,000 to defend an undocumented injured worker claim in your state WC system was high, wait until you hear from our panel of experts what defending that same action in the civil tort claim context would cost you, and what indirect costs you would face, that you would otherwise avoid, if the dispute remained in the WC adjudication process.

If this topic intrigues you, join us at the conference by registering at the following link:

www.americanbar.org/groups/tort_trial_insurance_practice.html