Kentucky Employment Law Blog

Kentucky Workers Compensation Exclusive Remedy Doctrine Bars Injury Suit

The exclusive remedy doctrine in Kentucky workers compensation law limits the circumstances in which an injured employee may recover anything other than workers compensation benefits. The scope and application of the exclusive remedy doctrine was illustrated in the recent Kentucky Court of Appeals decision, Helton v. Tri-County Cycles Barbourville, No. 2009-CA-000049-MR.

Helton was a salesman for Myers Chevrolet, which was owned by Gregory Wilcheck. Myers Chevrolet owned a 50% interest in Tri-County Cycles. The weekend before Tri-County was to formally open for business Helton was riding on the back of an ATV driven by Wilcheck during a sales demonstration for a customer. Helton had signed a sales representative contract with Tri-County; he and other Myers Chevrolet employees had been working to get Tri-County ready to open for business. Wilcheck began "jacking around" while operating the ATV, doing doughnuts and eventually causing it to tip over and badly injure Helton's leg. Helton filed for and received workers compensation benefits.

Helton then filed suit in circuit court for damages against Tri-County, Myers Chevrolet and Wilcheck. The court ruled that those claims were barred by the exclusive remedy doctrine, which "shall be exclusive and in place of all of the reliability of such employer to the employee [.]" First, the court noted that Helton held business licenses to act for both Myers Chevrolet and Tri-County, which made them his joint employer. Second, the claim against Wilcheck was barred, because an injured worker may sue a co-employee for damages on account of injuries sustained in the course of employment only where the injuries are caused by a willful and unprovoked act of physical aggression, not by reckless horseplay.

Robert L. Abell
www.RobertAbellLaw.com

Recovery Workers Compensation Benefits Not Barred by Recovery of Damages From Third-Party In Personal Injury Suit

The recovery of workers compensation benefits is not barred where a worker also has recovered damages from third parties whose actions most directly caused the injuries. Workers compensation benefits, however, will be reduced to the extent and amount that they duplicate damages already recovered, so as to prevent a double recovery. This scenario is illustrated in the recent decision by the Kentucky Court of Appeals,Wal-Mart Stores, Inc. v. Wells, No. 2009-CA-001682-WC.

Donald Wells, a Wal-Mart employee, was injured by carbon monoxide exposure caused by employees of Atlas and Unarco, who were repairing a freezer. Wells received $500,000 in settlement from Atlas and 400,000 from Unarco for his personal injuries. He then pursued a workers compensation claim against Wal-Mart and was awarded $440,659.21 in income benefits in past and future medical benefits.

Wal-Mart's contention that Wells was completely barred from any recovery of workers compensation benefits was rejected as contrary to numerous prior decisions including Cincinnati Ins. Co. v. Samples, 192 SW3d 311 (Ky. 2006); AIK Selective Self Ins. Fund v. Bush, 74 SW3d 251 (Ky. 2002); and Hillman v. American Mut. Liability Ins. Co., 631 SW2d 848 (Ky. 1982).  The court explained Kentucky law as follows:

...if you collect on a workers' compesnaiton claim, you cannot collect the awards in the civil action that mirror workers' compensation benefits; i.e., money for past and future medical expenses, lost wages, and the impairment of power to earn money.  If an employee does pursue both claims, then the employer has a right to subrogation against the proceeds recovered in the civil action that duplicate the workers' compensation benefits. This prevents the employee from receiving a double recovery. 

The court then explained that Wal-Mart's workers compensation liability would be calculated as follows: first, a total of $444,080.36 of the damages recovered from Atlas and Unarco duplicated workers compensation benefits and therefore were subject of a subrogation lien by Wal-Mart. Second, the fees and expenses incurred by Wells in prosecuting his claims against Atlas and Unarco must be deducted; these totaled $317,268.76.  Therefore, Wal-Mart had a subrogation credit of $126,811.60 ($444,080.36 minus $317,268.76).

Robert L. Abell
www.RobertAbellLaw.com 

Injury From Unexplained Fall Covered By Workers' Compensation

An injury sustained on the job is presumed work-related and covered by workers' compensation.  The Kentucky Supreme Court reaffirmed this principle recently in Vacuum Depositing, Inc. v. Dever, No 2008-SC-853-WC (June 25, 2009).  The employer must demonstrate by substantial evidence that the injury is not work-related for workers compensation not to apply.

Dever slipped and fell in the break room.  There were no witnesses and she "did not know why she fell."  She suffered a fractured wrist and sustained a minor back injury.  According to another employee, Dever later stated that she was "clumsy," that she had "just turned around and fell and had no idea how" and that she was "the only person she knew that could fall while standing still."  At the time of the fall, Dever was wearing high heels, which were commonly worn by women in the office.  An administrative law judge denied her claim on the grounds that the injury was due to her clumsiness and was not work-related.

The Supreme Court ruled that Dever's injury was covered by workers' compensation.  First, Kentucky law presumes that an unexplained workplace fall is work-related unless the employer presents substantial evidence to show otherwise.  To prevail the employer was required to show that the fall was not work-related.  The court ruled that evidence that Dever was clumsy and wearing high heels was not sufficient to demonstrate that her fall was not work-related and not covered by workers' compensation.

Learn more about your rights under Kentucky workers compensation law here.

Robert L. Abell
www.RobertAbellLaw.com 

"That's the game, baby" Explains Workers' Compensation Insurance Company Expert Witness

In "A World of Hurt: Exams of Injured Workers Fuel Mutual Mistrust" the New York Times today examines the role of "independent medical examiners" hired by workers compensation insurance companies to examine and report on injured workers. One doctor, a prolific "independent medical examiner," explained the difference between his written report stating that the claimant was not injured and videotaped statements while he was actually examining the injured employee as follows: 

"If you did a truly pure report," he said later in an interview, "you'd be out on your ears and the insurers wouldn't pay for it. You have to give them what they want, or you're in Florida. That's the game, baby."

Fraudulent medical opinions were a focus of a case decided by the Sixth Circuit last year, Brown v. Cassens Transport, which held that a civil RICO claim for money damages may be pursued by injured workers wrongfully denied workers compensation benefits on account of fraudulent medical opinions. Robert L. Abell published an article about the case in The Advocate, the official publication of the Kentucky Justice Association, "Injured Workers May Pursue Civil RICO Claim Based On Enterprise To Deny Them Workers' Compensation Benefits."

Robert L. Abell
www.RobertAbellLaw.com

Teacher's Injury At Beta Club Convention Is Work-Related

A teacher serving as the faculty sponsor for the high school Beta Club was injured while chaperoning the students at a club convention. Her injury was work-related and she was entitled to workers compensation benefits the Kentucky Supreme Court ruled recently in Clark County Board of Education v Audeen Jacobs, No 2008-SC-000222-WC (February 19, 2009).  

Kentucky law requires that an injury covered by workers compensation arise out of and in the course of the injured workers's employment. Under Kentucky law "an injury occurs in the course of an employment if it takes place during the employment, at a place where the employee may reasonably be, and while the employee is working or otherwise serving the employer's interests." Here, because the school board encouraged the teacher to sponsor the Beta Club and viewed the activity "as advancing its mission to educate students," the Court ruled that her injury was within the scope of the teacher's employment.

Robert L. Abell

www.RobertAbellLaw.com

Injured Workers May Sue Under Racketeering Law Based On Scheme To Deny Them Workers Compensation Benefits

Injured workers may pursue civil claims for damages under the federal racketeering law known as RICO (Racketeer Influenced Corrupt Organizations) based on a scheme to wrongfully deny them workers compensation benefits the Sixth Circuit ruled today in Brown v. Cassens Transport Co., No. 05-2089. The plaintiffs, a group of six injured workers, claimed that their employer, Cassens Transport Company, the company that administered Cassens's workers compensation claims, Crawford & Company, and a doctor, Saul Margules, "employed mail and wire fraud in a scheme to deny them worker's compensation benefits."  More specifically, the injured workers alleged that "Cassens and Crawford deliberately selected and paid unqualified doctors, including Margules, to give fraudulent medical opinions that would support the denial of worker's compensation benefits, and that defendants ignored other medical evidence in denying them benefits."  A copy of the workers' complaint can be read here. 

The court, in reversing a district court decision dismissing the case, ruled that the workers had pleaded a pattern of racketeering activity based on the following commonalities of the defendants' acts: (1) the common purpose of reducing "Cassens's payment obligations towards worker's compensation benefits by fraudulently denying worker's compensation benefits to which the employees are lawfully entitled"; (2) the common result of denying "worker's compensation benefits to certain Cassen's employees who are entitled to such benefits under Michigan law"; (3) common participants including worker's compensation officials at Cassens and Crawford and "Margules, a doctor who the plaintiffs allege, with regard to some of the predicate acts, fraudulently recommended ineligibility of benefits at the request of Cassens and Crawford"; (4) common victims in the injured employees eligible for but wrongfully denied worker's compensation benefits; and (5) similar methods of commission, the fraudulent application of legal standards to wrongfully deny worker's compensation benefits to eligible employees.  The court further held that the defendants' predicate acts were continuous under both closed- or open-ended theories because they had gone on for a time span "well over three years" and were alleged to have been defendants' standard way of doing business: "fraudulently denying benefits to which the employees are entitled through the use of fraudulent communications by mail and wire." 

The court also addressed two other RICO issues.  First, that reliance by the injured workers on defendants' fraudulent misrepresentations was not an element of a civil RICO claim based on a Supreme Court ruling in Bridge v. Phoenix Bond & Indem. Co., No. 07-210 (June 9, 2008).  Second, the workers pleaded a compensable RICO injury because "the defendants' fraudulent acts were a 'substantial and foreseeable cause' of the injuried alleged by the plaintiffs: the deprivation of their workers' compensation benefits and expenses for attorney fees and medical care." 

This case outlines a path by which injured workers may obtain relief from schemes by employers, insurance companies and doctors aimed not at dealing with the true and real facts but at wrongfully denying benefits to truly and legitimately injured workers.  It should also raise a flag of caution for those insurance companies and doctors that reflexively oppose and deny the claims of truly and legitimately injured workers.

The Kentucky Justice Association published an article authored by Robert L. Abell on this case in its January/February 2009 issue of its publication, The Advocate, "Injured Workers May Pursue Civil RICO Claim Based on Enterprise To Deny Them Workers' Compensation Benefits.

A federal judge in Colorado recently certified a class action by injured Wal-Mart workers in that state regarding that company's handling of workers compensation claims, see Workers Comp Suit Against Wal-Mart Certified As Class Action.

Robert L. Abell
www.RobertAbellLaw.com