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NOTEWORTHY CASES
Court of Appeals Cases
Brown v. Muskego Norway School District Group Health Plan, 2018AP1799 (October 16, 2019):
William C. Brown was injured in a motorcycle accident. Brown declined worker’s compensation coverage and wanted coverage provided by his own health insurance policy. The circuit court found that Brown was in the course of his employment when he was injured and further found that Brown’s health insurance policy expressly excluded coverage as benefits were available to Brown under the worker’s compensation law. Brown was ordered to reimburse his health insurance for the medical expenses it paid as a result of the accident. The Court of Appeals affirmed the circuit court’s finding.
On November 4, 2015, Brown suffered significant injuries in a serious motorcycle accident. At the time, Brown was a salaried employee of Gardner Pet Group, which had two plant locations in Wisconsin: one in Juneau and one in West Bend. The morning of the accident, Brown attended a meeting at the Juneau plant.
The accident occurred as Brown was traveling east on Highway 33, which is the most direct route to his office at the West Bend plant. Brown claims that he left the Juneau plant to enjoy a motorcycle ride on a beautiful day and to have lunch as he had already put in an eight-hour day. When asked whether he was planning on going back to his office, Brown responded, “I don’t know to be honest with you. I don’t know if I was…. The concept would be let’s just go for a ride.”
Five days after the accident, Gardner Pet Group submitted a claim to the Wisconsin Department of Workforce Development’s Worker’s Compensation Division, indicating that Brown was “driving from one work location to another” when the accident occurred. Travelers—Gardner Pet Group’s worker’s compensation carrier—opened a file and began its claims investigation. Travelers completed its investigation and determined that Brown’s claim was compensable and that “[t]he accident arose out of and in the course of [Brown’s] employment.” When Brown discovered the claim had been filed, he refused the worker’s compensation checks he received from Travelers and instructed Gardner Pet Group to withdraw the claim, arguing that he was not working at the time of his accident.
Brown’s health insurer (the Plan) also investigated whether it owed coverage and sent a standard questionnaire to Brown, which included the question, “Was treatment required as the result of a work related Injury or Illness,” and the box was marked, “No.” The form was signed on February 11, 2016, by Brown’s attorney. Relying on the questionnaire, the Plan paid $482,099.61 for Brown’s medical care and treatment as a result of the accident.
Brown filed this action on February 22, 2016, against the driver and insurer of the vehicle that hit him, alleging negligence. The amended complaint also named the Plan as a subrogated party for the health care payments that it made and Travelers in the event it made payments. The Plan filed an amended answer and counterclaim seeking a declaration under Wis. Stat. § 806.04 that the Plan was not obligated to pay any claims arising from the accident pursuant to the Plan language as Brown was covered by worker’s compensation benefits.
The Court of Appeals analyzed the Wisconsin Worker’s Compensation Act and determined Brown was a traveling employee in the course of his employment at the time of the accident. The Court of Appeals took into consideration that the worker’s compensation insurer never denied worker’s compensation benefits to Brown. The Court did not defer to the Department or the Division to make a finding that Brown was in the course of his employment at the time of the accident. Brown was order to pay his health insurer $514,551.28.
This case is important to claims for reimbursement pursuant to Wis. Stat. sec. 102.29. The Court of Appeals determined if applicant was entitled to worker’s compensation benefits rather than sending the case to OWCH for such a determination. Recently, subrogated health insurers also named in third-party lawsuits have been asking worker’s compensation insurers to substantiate their failure to pay medical bills paid by health insurance. Based on this case, health insurers may ask the trial court to determine if the medical bills should have been paid by the worker’s compensation insurer.
Sinkler v. American Family, 2019AP88 (October 22, 2019):
EMC appealed an order distributing the settlement proceeds in a third-party liability action filed under Wis. Stat. § 102.29. EMC argued the circuit court erroneously exercised its discretion by failing to distribute any portion of the reasonable cost of collection to EMC’s attorneys.
Following a mediation on December 4, 2018, American Family agreed to pay $175,000 to settle the Sinklers’ claims. The parties further agreed that 30% of that amount—or $52,500—would be allocated to a loss of consortium claim. However, EMC and the Sinklers disputed how the remaining $122,500 in settlement proceeds should be distributed.
After an analysis of Wis. Stat sec. 102.29(1)(c) and the three-step process that is required by the Wisconsin Supreme Court in Anderson v. MSI, 2005 WI 62, the Court of Appeals denied attorney fees to EMC as part of cost of collection found in the 102.29 distribution formula. The Court found that EMC’s lawyer did not engage in “pressing the claim” on behalf of the plaintiff.
The Court of Appeals made some interesting statements concerning lawyers retained to represent the worker’s compensation insurer.
The court reasoned that the “risks attendant to a worker’s compensation insurer’s counsel joining an action filed by the injured employee’s counsel are significantly lower than those attendant to the injured employee’s counsel in investigating and instigating the entire action.” In other words, the court explained that because the statutory distribution formula mandates that an insurer be reimbursed for benefits paid to an injured employee, EMC’s recovery would have occurred regardless of whether EMC hired its own counsel. Accordingly, when the firm representing EMC appeared in this action, it received the benefit of the plaintiff firm’s preparation of the claim, without having to assume the risk of absorbing the expense of such preparation if the claim were not ultimately successful. The firm representing EMC therefore only risked receiving no compensation for work completed from the date of its retainer in March 2017 through the case’s conclusion; the plaintiff's firm, in contrast, risked receiving no compensation for two years of preparation work as well as all work completed after filing the action.
Further, in a case in which the worker’s compensation insurer has paid a large amount of benefits relative to the total amount of the gross recovery, the insurer will necessarily receive a greater portion of the gross recovery than the employee. That result will occur regardless of the amount of work performed by the insurer’s and the employee’s respective attorneys.
When an attorney is hired to represent the worker’s compensation insurer, the insurer and attorney cannot assume that the attorney fees generated in protecting the lien will be part of the cost of recovery as identified in 102.29. There is a difference between monitoring the plaintiff’s efforts to obtain a judgment or settlement and assisting the plaintiff in pressing the claim against the defendants.
As noted above, at mediation the parties agreed that 30% of the total settlement would be allocated to plaintiff’s spouse for loss of society and companionship. Based on our personal experience, plaintiffs generally are seeking 20% for the spouse. The allocation is subject to agreement of the parties, and if the worker’s compensation insurer disagrees with the allocation, it will have the burden of proving the allocation is inequitable before the trial judge.
LIRC Cases
Purdy v. Appleton Coated LLC, (October 23, 2019):
This case involves a mental injury suffered by claimant following an incident at work. LIRC affirmed the findings of the ALJ that the work incident involved circumstances that were not so out of the ordinary from the emotional strains and tensions the applicant or any other employee could have expected in the course of operating the employer’s crane as to meet the extraordinary stress standard.
On July 2, 2015, the applicant arrived to work the night shift. He immediately saw that there had been a mishap on the previous shift involving a cable that had snapped while the crane was lifting a 20,000·pound roll of paper. This resulted in the paper roll hanging lopsided from the crane hooks. In lifting the paper roll, the crane operator would use the crane's two hooks to grab either side of a spool that fit through the center of the paper roll. The crane hooks themselves were attached at the top to a horizontal bar called a strong back. The strong back itself is attached in such a way that it is capable of movement in any direction, but it is intended to be level when the crane hooks are lifting paper rolls. The snapped cable had resulted in the strong back being pulled down in the direction of the snap, thus resulting in the paper roll also drooping down on that side. The employer was concerned that additional cables on either side of the roll might snap, and it was also concerned with re-securing and rebalancing the roll. As a result, it had called in a third-party contractor, Boldt, to deal with the matter. The applicant was hoisted up to his crane control booth by means of a platform boom. Usually he climbed a stairway to get up to the booth, but on this occasion, it was deemed safer for him to be boomed up. The crane is about two stories off the floor. At some point one of the chains or straps securing the paper roll snapped, one end of the roll swung into the front corner of the crane booth, and it knocked out the safety glass covering the front of the booth. The safety glass had top and bottom sections separated by a strip of metal called a "base bar." This base bar was torn out and the top section of the safety glass was pushed back and "wrapped around" the applicant. However, it did not cut or otherwise injure him. The applicant was then lowered to the plant floor via the boom, and he waited there for about two hours while Boldt re-secured the paper roll. He was then boomed back up to the damaged booth to complete the operation of leveling and lowering the paper roll, and this time it was successfully accomplished. The applicant testified that during this two-hour wait he felt numb and, "I really didn't - I really didn't come to terms with the magnitude of the situation until my drive home." He testified that on his way home it sank in that he had nearly been killed, and at one point he became emotional and had to pull over to the side of the road. The accident occurred early in the morning on a Friday, and he was scheduled off work until the following Monday. He went to work that Monday thinking he would have a normal work week, but when he got up to the crane booth he started sweating, shaking uncontrollably, and felt nauseous. He was unable to ever return to the crane job.
Applicant was diagnosed and treated for Post-Traumatic Stress Disorder. The employer attempted to accommodate applicant’s psychological distress by providing EAP and work in positions that did not require crane operation.
Following a denial of benefits, the matter went to hearing. At hearing the employer offered testimony from fellow employees and supervisors that similar crane incidents occurred in the past. LIRC did not dispute that applicant suffered a mental injury, but determined that the incident in question was not so stressful or out of the ordinary as to be likely to cause mental injury to employees who performed the duties of a crane operator at the employer's plant. Benefits were denied and the application was dismissed.
NOTEWORTHY GUIDANCE
SOME TIPS FOR OBTAINING EFFECTIVE
RECORDED STATEMENTS IN WORKER'S COMPENSATION CLAIMS
(YOUR DEFENSE ATTORNEY WILL THANK YOU LATER)
In civil litigation, defendants have the ability to conduct extensive discovery to investigate the factual background of a particular case and to use that information to prepare defenses to the claim. Discovery in this context includes things like taking depositions, sending out written interrogatories, and making requests for admission of particular facts. In worker's compensation in Wisconsin, however, there is no formal discovery. Consequently, the ability of employers and insurance carriers to investigate the factual aspects of worker's compensation claims is significantly limited.
A critical component of our "quiver" of tools to investigate a worker's compensation claim is the recorded statement. Aside from being one of a limited set of opportunities to factually investigate a claim, the recorded statement is an indispensable tool in the defense of a worker's compensation claim for two other important reasons. First, the recorded statement is conducted in the early stages of a claim. Memories of events are fresh. For that reason, the recorded statement is often accorded a high degree of credibility in a litigated claim. It is not unusual for a 20 pound box lifted one week before a recorded statement to become a 50 pound box a year and a half down the road. Because of the proximity of these statements to the underlying events, they are critical to reviewing expert physicians and finders of fact in worker's compensation cases. Second, the recorded statement is usually conducted before attorney involvement on behalf of the claimant. For this reason, the recorded statement provides an opportunity to obtain an unfiltered account of the circumstances surrounding the claim as well as the claimant's relevant medical and treatment history.
When obtaining a recorded statement, the claims professional must keep in mind the importance and unique nature of the recorded statement. This pertains not only to the factual investigation immediately at hand, but it also extends to the potential foundation for the defense of a worker's compensation claim that may become litigated months or even years in the future.
The first step in taking a recorded statement should be for the claims professional to take a moment to consider the particular aspects of the claim under consideration. No two claims are exactly identical and not stopping to consider the nuances of a particular claim could result in important aspects of the claim being overlooked when the recorded statement is taken. In this regard we encourage our clients to feel free to contact us for a brainstorming session before the recorded statement is taken. We welcome such calls as well as the opportunity to provide input in the early stages of the development of the claim.
In general, we suggest the following issues be addressed in the recorded statement:
▪ Make a record of the date and time the recorded statement is being taken. It is import to record the full date the statement is being taken, including the calendar year. The month and the day alone may be insufficient if the recorded statement ends up being used in litigation years later.
▪ Obtain the claimant's date of birth and social security number.
▪ Obtain the claimant's address and telephone numbers including any alternate residences such as vacation homes.
▪ Determine whether the claimant is married, and identity all other members of the claimant's household.
▪ Determine the claimant's educational background.
▪ If a particular traumatic injury is being claimed, obtain a detailed history of the event in question. Pay particular attention to estimates of force and measurements, such as weights and distances.
▪ If a particular traumatic injury is claimed, obtain an account of the claimant's activities before the claimed injury occurred and whether there was anything out of the ordinary in the claimant's routine that day.
▪ If a particular traumatic injury is being claimed, ask the claimant to provide their understanding of how the alleged injury occurred. The burden of proof in a worker's compensation claim rests on the claimant. That requires the claimant to explain how the claimed injury "arose out of" the employment. If the claimant states they are unsure regarding how the injury occurred, which may be true particularly in claims involving, slips, trips and falls, a key element of that burden of proof might be left in question.
▪ Determine whether there were any witnesses to the claimed injury and, if so, the identity of those witnesses.
▪ Determine when and to whom the injury was reported. The claimant should identify all individuals to whom the injury was reported. Determine what was said by the claimant to each individual to whom the injury was reported.
▪ Identify each and every symptom the claimant attributes the claimed injury.
▪ Determine the status of each symptom. That includes any symptoms the claimant experienced that might have resolved prior to the recorded statement.
▪ Determine whether the claimant experienced any physically observable symptoms associated with the claimed injury, such as any bruising or swelling associated with the claimed injury. If so, determine the status of those symptoms.
▪ Determine when the claimant initially experienced each symptom pertaining to the claimed injury.
▪ Determine whether or not the claimant ever experienced each symptom associated with the claimed injury prior to the claimed injury.
▪ Determine when the claimant last worked for the employer in relation to when the recorded statement is being conducted.
▪ If a particular traumatic injury is claimed, determine whether the employee completed the shift during which the claimed injury occurred and whether or not the employee went home or to other locations after leaving the employer's premises.
▪ Determine whether the claimant ever reported similar injuries or similar symptoms to the employer prior to the claimed injury which is the subject of the current investigation.
▪ Regardless of whether an occupational disease injury or a particular traumatic injury is being claimed, obtain a detailed history of the claimant's work activities. It is not unusual for what begins as a claim involving a particular traumatic injury to develop into an occupational disease injury claim down the road.
▪ If an occupational disease injury is being claimed, identify whether there are particular aspects of the work to which the claimant attributes the development of the condition
▪ If an occupational disease injury is being claimed, determine whether there were any changes in the claimant's job assignment and/or the manner in which the job is performed during the one-year period preceding the onset of symptoms.
▪ Obtain a history of the claimant's job assignments with the employer and the job activities associated with those job assignments.
▪ Determine whether the claimant has other employment.
▪ Obtain a history of the claimant's past employment with other employers.
▪ Determine whether the claimed injury has had any effect on the claimant's leisure-time activities. (For strategic reasons, we would ask this before the following question.)
▪ Determine whether the claimant has any leisure-time activities or hobbies.
▪ Determine whether the claimant has an exercise routine or engages in any physical fitness activities outside of work.
▪ Obtain a complete worker's compensation claims history for the claimant.
▪ Obtain a complete personal injury claims history for the claimant including motor vehicle accidents.
▪ Obtain a complete treatment history pertaining to the claim in question. Pay particular attention to identifying all initial treating healthcare providers.
▪ Determine whether the claimant has treated for any similar conditions in the past and if so when that treatment occurred. Identify any and all heath care providers who treated the claimant for such similar conditions.
▪ Identify the claimant's general practitioner or family physician.
▪ Determine whether the claimant takes any prescription medications and, if so, the identity of the prescribing healthcare providers.
▪ Obtain a complete surgical history for the claimant.
▪ Obtain a complete history of in-patient hospitalizations for the claimant.
▪ Identify any and all chiropractors with whom the claimant ever treated for any condition.
Good luck with your recorded statements! Again please call us if you have questions or wish to discuss a particular claim.