Case Law Update

BCPWQ Seminar

April 19, 2013

CAUSATION

Arising Out of and In the Course of – Parking lot

Mohney v. American International Group, 2012 ACO #98. Here, the claimant slipped and fell in the parking lot leased by her employer and designated for employee parking. The slip and fall occurred while the claimant was walking directly from the lot to the building entrance. The sole issue was whether the injury arose out of and in the course of employment. The MCAC noted the statutory provision that establishes a presumption of compensability where the injury occurs on the employer’s premises within a reasonable time before and after work. MCL 418.301(3). Because the evidence showed that the claimant fell on a direct route between the lot and building, and because the lot was leased by the employer, the MCAC found that the injury arose out of and in the course of employment. In further support, the MCAC noted that it is an implicit and reasonable expectation that an employee walk from the provided parking lot to the office, an expectation which supports compensability.

Arising Out of and In the Course of – “Going to and Coming From”

Little v. Merchants Preferred Insurance Co., 2012 ACO #104. This case involved a claimant who was driving an employer-owned vehicle from the employer’s headquarters to a job site when he was involved in an accident. The Magistrate found that the injuries arose out of and in the course of employment, but the MCAC reversed. First, it noted the general rule that injuries incurred while going to and from work are not compensable, with the four-prong exception: 1) whether the employer paid for or furnished the transportation; 2) whether the injury occurred during or between work hours; 3) whether the employer derived a special benefit from the activities at the time of injury; and 4) whether the employment subjected the employee to excessive exposure to traffic risks. The MCAC also cited the general test of whether the employment relationship, construed in light of all circumstances, suggests an express or implied agreement by the employer to provide transportation. The magistrate initially focused on the benefit provided to the employer as a result of the claimant taking the employer’s car to the job site. However, the MCAC noted that the claimant was using the employer’s vehicle only because his personal vehicle was having trouble, and the employer thus allowed the claimant to use theirs. Therefore, the benefit of going to the job site would have been provided regardless of whether the claimant was using the employer’s vehicle or his own. Further, the claimant only occasionally used the employer’s vehicle, which suggested no implied agreement by the employer to provide transportation.

Medically Distinguishable Condition/Pathologic Aggravation – Inflammation

Slovan v. HCR Manor Care, Inc, 2012 ACO #100. This case involved a claimant who alleged that she injured her back as a result of lifting a patient at work. The claimant’s medical expert testified only speculatively regarding aggravation of disc pathology and nerve root irritation, but did testify that the claimed work injury caused inflammation. Initially, the Magistrate found that this work-related inflammation represented the required medically distinguishable condition. However, the MCAC remanded with specific instructions that inflammation is insufficient evidence of a distinguishable condition as compared to pre-existing problems. Instead, the MCAC noted that something more was needed, usually in the form of imaging studies. On remand, the Magistrate found that the medical testimony did not support the finding of a medically distinguishable condition aside from inflammation, and thus denied benefits. The MCAC affirmed.

Medically Distinguishable Condition/Pathologic Aggravation – Inferences

McDonald v. MGM Grand Detroit, LLC, 2012 ACO #68. The claimant in this case alleged a September 2008 cervical spine injury. The medical records established that the claimant had a prior injury in 1993 that caused her to be off work for one year. The Magistrate nonetheless found that the claimant established a work-related September 2008 injury. In doing so, the Magistrate relied upon the evidence that the claimant had no symptoms or treatment from 1993 until the September 2008 injury date, and then had consistent symptoms thereafter. Defendants contended that the Magistrate failed to strictly apply Rakestraw’s “medically distinguishable condition” standard to address causation. The MCAC disagreed and affirmed the Magistrate’s finding. The MCAC noted that there need not be explicit testimony regarding “change in pathology.” Instead, there only needs to be evidence from which a legitimate inference can be drawn that the underlying pathology was changed as a result of as work injury. Here, the lack of any symptoms for 15 years prior to the injury, combined with unrelenting symptoms thereafter, allowed for such an inference.

Inhalation Injuries

Mulvena v. State of Michigan Dept. of Transportation, 2012 ACO #46. In this case, the claimant alleged that he developed pulmonary problems as a result of chemical exposure and lack of ventilation at work. Based upon the testimony of the claimant’s physician, the Magistrate found a work-related asthma injury. On appeal, defendants challenged this finding on the grounds that the physician did not have an appropriate basis to render his opinion. In its argument, the defendants noted that the physician did not know: 1) the specific chemical agent that the claimant allegedly inhaled; 2) the frequency and duration of exposure; 3) the concentration of exposure; and 4) other possible exposures outside of work. The MCAC agreed, finding that the witness’ testimony did not support a finding of a work injury despite the witness’ ultimate conclusion on causation, because the witness did not have an appropriate foundation and knowledge of all contributing factors to render such an opinion.

Residuals of Work Injury Causing Subsequent Event/Injury

Lane v. Consumers Energy, 2012 ACO #136. The claimant here was involved in an undisputed work injury in May 2007 that caused a closed head injury/traumatic brain injury. He then fell down stairs at home in June 2007, further aggravating the injury. The claimant alleged that this second injury was caused by dizziness stemming from the first injury, and was thus a work-related injury. The Magistrate found that the second injury was a consequence of the first and awarded the claimant medical benefits for same. The MCAC reversed. The MCAC clarified that compensation for a subsequent injury is only available when the injury is a direct and natural consequence of the work injury. In the MCAC’s opinion, the second fall was not a direct and natural consequence of the first injury. In reaching this opinion, the MCAC highlighted Supreme Court cases finding that injuries incurred while driving to/from medical treatment for an original work injury are not a direct and natural consequence of the work injury, and the MCAC further reasoned that the facts of this case are even less direct than those precedential circumstances. As a result, the MCAC concluded as a matter of law that the second fall was not a compensable work injury. The MCAC also noted that it was not conclusive whether the June 2007 fall was attributable to dizziness or some other factor, and therefore the second fall was not a compensable work injury from a factual perspective either.

DISABILITY

Jobs Identified by Defense Vocational Expert

Sulowska v. Trostel, Albert & Sons Co., (Court of Appeals, July 26, 2012). This case involved an injured employee who testified that she had not looked for work since her injury. She was not declared totally disabled, but was instead under work restrictions. She also struggled to speak English. Defendant’s vocational expert found an available job as part of his labor market survey, which he felt was suitable for her qualifications and training. The claimant was not made aware of this job prior to vocational testimony. The Magistrate found that the claimant met her burden of disability under Stokes, which the defendant challenged on appeal. The focus on appeal was on the job identified by the defendant, as well as its effect on plaintiff’s burden under Stokes. First, the MCAC noted that Stokes’ analysis only deals with jobs that pay the claimant’s maximum wages, such that lesser paying jobs that are identified may be dismissed for Stokes analysis. Nonetheless, the MCAC further noted that when a defendant finds a real job, it is not fatal to the claimant if she does not attempt to secure this job. This is so because an inability to obtain a job is Step 4 of Stokes. Alternatively, the claimant may show that the identified job is not within her qualifications and training under Step 2, such that Step 4 as it relates to that job is irrelevant. Additionally, the claimant can show that she is physically unable to perform the job under Step 3 of Stokes, which also makes Step 4 irrelevant. In other words, there are three separate ways a claimant can rebut a job identified by a defense expert and still meet Stokes – by proving that: 1) the job is not within her qualifications and training under Step 2; 2) she cannot physically perform the job under Step 3; or 3) she cannot obtain the job under Step 4. In making one of these three showings, the MCAC stated that the burden remains on the claimant to prove that the job is not suitable to her training and qualifications, or that she cannot perform it. While this is the claimant’s burden of proof, the MCAC noted that it is not the plaintiff’s burden of production to fill in the gaps regarding the physical requirements and skill requirements of the job. Instead, the defendant who presents an available job has the burden of presenting details of the job that would then allow the claimant the opportunity to make one of the three showings above. Otherwise, the burden would be too strong on plaintiff to investigate every job identified by the defendant, even those lacking detailed information, to prove that he/she is not qualified to or physically able to perform it. The Court of Appeals affirmed the MCAC’s finding of disability and its supportive reasoning, specifically noting that the MCAC did not misapply the burden of proof under Stokes when it said that the employer had the burden of production to provide details regarding available jobs, so that the plaintiff can respond accordingly under her Stokes burden of proof.

Significance of Job Search

Holmes v. ET4, Inc., (Court of Appeals, August 2, 2012). The appeal in this case was of a Magistrate’s finding of disability under Stokes.  The claimant testified to his significant post-injury job search efforts, which included registering his resume online and applying for all available work he could find at various types of employers. The claimant’s job history was primarily in manual labor, but he testified that he was applying for any job he could find. Per the Magistrate, this testimony met the second requirement of Stokes regarding establishing the jobs the claimant is qualified to perform. The magistrate also used this testimony to find that the claimant met the fourth requirement of Stokes that he is unable to obtain the jobs that he is qualified to perform. Initially on appeal, the MCAC reversed, reasoning that an employment search must be conformed to the jobs that the claimant has an opportunity to be considered for given his skill and experience. Further, the MCAC noted that a claimant’s burden under Stokes’ second requirement is to consider a “proper array” of other jobs he may be qualified to perform, and that a wide-ranging and unfocused search does not supply enough information to meet this burden. However, the Court of Appeals then reversed and reinstated the disability finding. According to the Court of Appeals, job search efforts are significant under Stokes, and can certainly be used to assess the universe of jobs a claimant is capable of working. Further, the Court noted that Stokes often punishes claimants whose job considerations are too restricted and don’t establish the full array of qualified employment opportunities. Thus, a holding that discounts an overly broad job search is contrary to the logic and reasoning behind disability law.

Wage Earning Capacity – Current Wages of Historical Jobs

Nelson v. Arvco Container Corp., 2012 ACO #91. Here, the claimant suffered a work injury, and the primary dispute was disability. At trial, the clamant testified to all of his prior jobs, as well as the wages he earned at those jobs. The Magistrate noted that the claimant earned less at all of his prior jobs than he did for defendant, thereby establishing (and narrowing) the jobs that the claimant was qualified to perform that paid his maximum wage, as is required by Stokes. The Magistrate ultimately found disability. Defendants challenged this on the grounds that the Magistrate did not properly consider the claimant’s prior employments as it related to disability. The MCAC agreed and reversed. The MCAC noted that Stokes requires the claimant to prove what jobs he is qualified to perform that pay his maximum earning capacity, and also that he is unable to work jobs that pay his maximum wages. In addressing the maximum wage jobs, the MCAC noted that what the claimant earned when he worked the historical jobs is irrelevant. Instead, Stokes requires that the claimant prove the current wage for his historical jobs in order to meet his burden of proof regarding all suitable jobs that pay his maximum wage and his inability to work those jobs. The MCAC specifically rejected plaintiff’s argument that such a burden is too onerous.

Medical Testimony vs. Vocational Testimony

Peterson v. Consumers Energy., 2012 ACO #31. In this case, the defendant appealed the Magistrate’s finding of work-related wage loss. Despite the appeal centering on the wage loss issue, the MCAC also offered persuasive guidance on the issue of disability. Specifically, the Magistrate found disability because the plaintiff’s physicians testified to total disability. The MCAC, however, noted that doctor’s testimony does not serve as competent testimony on the issue of disability, because a doctor’s medical testimony can usually not serve as an expert opinion regarding the translation of medical restrictions into vocational situations. Instead, the MCAC stated that physicians should provide medical restrictions, and vocational proofs can translate those restrictions into an assessment regarding wage earning capacity for suitable jobs.  Per the MCAC, this latter requirement can be accomplished through a vocational expert or job search efforts.

WAGE LOSS

Proofs of and Calculation of Partial Wage Loss

The MCAC heard challenges in numerous 2012 appeals regarding the presiding Magistrate’s claimed failure to acknowledge and calculate a partial wage loss rate in light of partial disability under the Supreme Court’s 2011 orders in Harder, Umphrey, and Vrooman. In all of these appeals—consolidated in this summary—the MCAC reiterated Harder’s directive that once a Magistrate finds that disability is partial and a claimant retains the ability to work lesser paying jobs, he or she must calculate a partial wage loss rate, providing a credit for wages that the injured workers remain able to earn in accordance with MCL 418.361(1).

In these remand opinions, the MCAC provided consistent and identical guidance to the magistrates on remand regarding what proofs should be used to identify a partial residual rate, and how to calculate that rate. Because Stokes proofs are utilized to find a partial versus total disability, the MCAC established that those same proofs should be used to determine whether a claimant has a residual wage earning capacity to calculate partial wage loss. When an individual has not worked a job that he or she nonetheless retains a residual ability to perform, MCL 418.371(5) states that the wage used for partial wage loss purposes is the usual wage paid for similar services. Again, the MCAC consistently held that Stokes proofs can be used to quantify the identified residual earning ability. After establishing the wage of the jobs that the claimant remains able to perform, the partial rate is then calculated by computing 80% of the after tax AWW of the injury job, and subtracting 80% of the after tax AWW of the job the claimant retains an ability to perform. All these cases addressed dates of injury prior to the December 2011 statutory amendment, which adjusted the way a partial rate may be calculated.

In all of these cases, the MCAC noted that the new law and the Supreme Court orders demanded a remand for additional analysis and calculation of a partial wage loss rate in light of the claimants’ retained ability to work lower paying jobs. In some cases where it was necessary, the MCAC allowed for remand proofs to be submitted to address the new standards of partial wage loss.

See:

Smith v. Eaton Corp. Torque Controls, 2012 ACO #6.

Fenner v. Convention & Show Services, 2012 ACO #10.

Harris v. DaimlerChrysler Tech Center, 2012 ACO #16.

Boertman v. Belle Tire Distributors, Inc., 2012 ACO #17.

Jones v. DaimlerChrysler Corp., 2012 ACO #18.

Williamson v. General Motors, LLC, 2012 ACO #21.

Bowden v. General Motors Corp., 2012 ACO #25.

Theoretical Earning Ability/Effect of Job Search on Partial Rate

Vrooman v. Ford Motor Co., 2012 ACO #90. The Vrooman case was one of the several Supreme Court orders from 2011 that created the concept of and need for partial wage loss analysis and rate calculations. On remand for partial wage loss analysis, the Magistrate found that the claimant had a retained earning ability of $9.00/hour. But the Magistrate also found that the claimant made reasonable efforts to, but could not, secure a job at this rate. As a result, the Magistrate granted full benefits. In affirming the award of full benefits, the MCAC reiterated its own directive in Harder that a theoretical ability to work does not allow for a partial benefit reduction. Instead, the work must be reasonable available. Therefore, the MCAC held consistent with Harder that full benefits can be awarded even where claimants retain a residual earning ability, if they have made reasonable but unsuccessful efforts to secure jobs within that residual ability.

Difficulties with Current State of Partial Wage Loss Law

Ferris v. Tri Tec Seal, Inc., 2012 ACO #49. This case was one of several MCAC decisions that remanded back to the magistrate on the grounds that the presiding magistrate failed to perform proper wage loss analysis using recent changes in the law. Specifically in Ferris, the magistrate failed to determine the specific amount of wage loss related to the work injury, and further did not define the work restrictions attributable to the plaintiff’s work injury/new disc pathology in contrast to those attributable to a pre-existing condition. While this case was one of many similar cases discussed above that remanded for wage loss analysis in 2012, it also contained a relevant concurring opinion from Commissioner Smith. Commissioner Smith agreed with the remand, but noted the significant and “unimaginably onerous” burden now placed on plaintiffs and magistrates as a result of the current state of the law under the amended statute and new case law on wage loss. Specifically, the commissioner noted the nearly impossible task of determining the portion of the disability related to a work injury versus a non-occupational cause, and then quantifying how much of the wage loss is related to the work injury versus other factors. The commissioner called it “utter speculation” to be able to prove or analyze these now required issues.

RICO ClAIMS

Brown v. Cassens Transport Co., (U.S. Court of Appeals, April 6, 2012).  This case involved a claim initiated by a group of employees who claimed work-related injuries while working for the defendant. The defendant denied workers’ compensation benefits in each cased based on independent medical evaluations. As a result, the plaintiffs alleged that they were fraudulently denied workers’ compensation benefits in violation of the Racketeer Influenced and Corrupt Organization (RICO) Act due to a combined scheme among the employer, insurance carrier, and evaluating doctors. The RICO Act was initially intended to target organized crime. Nonetheless, it gives individuals a private cause of action in Federal civil court against a criminal enterprise that deprives it of a business or property interest.

In 2010, the U.S. District Court dismissed the claim based on the “exclusive remedy” provision of the Workers’ Disability Compensation Act. Under that provision, employees seeking to recover benefits, or to argue that they were improperly denied benefits, must utilize the WDCA’s administrative process. As such, the district court reasoned that this provision precludes a claim under the RICO Act. Even without such preclusion, the district court indicated that a claim under the RICO Act would fail because the RICO Act only allows recovery for injuries to business and properly, not for personal injuries.

However, the U.S. Court of Appeals heard this case in 2012, and reversed the district court, thereby allowing the RICO claim to proceed. In doing so, the Court of Appeals held that the U.S. Constitution prevents the Michigan state legislature, through the WDCA, from declaring that its state remedy supersedes or excludes any available federal remedies, such as the RICO Act. Even more, the Court of Appeals held that the RICO suits did involve property, so as to invoke a potential RICO violation. The Court found that while workers’ compensation benefits may arise out of a personal injury, the entitlement to the benefits qualifies as property, such that the deprivation or devaluation of those benefits is a sufficient injury to property under the RICO Act. The Court even went further to say that the claim for benefits itself is a property interest. The Court of Appeals’ reversal allowed the RICO suit to proceed in district court, but did not address the merits of the claim.

Subsequent to Brown and in a similar case, the Sixth Circuit U.S. Court of Appeals once again reversed and reinstated a district court’s dismissal of a RICO claim brought by a workers’ compensation claimant. Jackson v. Segwick Claims Management Service, Inc. (U.S. Court of Appeals, November 2, 2012). Therefore, that case appeared to be consistent with Brown. However, the Court of Appeals in January 2013 granted the Defendant’s request for an en banc hearing, which effectively vacates the initial reversal and allows the Sixth Circuit to re-decide the issue. In other words, the initial Court of Appeals decision, which is unfavorable to Defendants, was issued by a three-judge panel. The en banc hearing means the case will be re-heard before a majority of the Sixth Circuit judges, not just a three-judge panel. The ultimate disposition of the Jackson case en banc could change the case law surrounding RICO claims, including effectively reversing Brown. As a result, the case law surrounding RICO claims is not settled at present.