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When Claims Give You Lemons, Make Lemonade

Matthew Riddle

One of Clement Rivers, LLP’s clients has given me permission to share an interesting experience I had recently in an ongoing case.   The employer received a very favorable result on appeal before the SCWCC Full Commission Panel. I am required to say that I can’t guarantee similar success in other cases, but I think there are some important lessons to be learned from this particular situation.

Our client, a large national retailer, found itself on the wrong end of an order after a Single-Commissioner hearing.  The main problem was that the employer had not made an appearance at the hearing.  There had been a mix-up between the employer’s carrier of record and its third-party administrator (TPA).  As a result, none of the SCWCC filings, including the hearing notice, had been provided to the claims manager at the TPA in time to make a referral to defense counsel.  The Commissioner at the hearing simply gave the claimant everything she wanted.  The Claimant alleged injuries to her neck and right shoulder, and sought temporary total disability (TTD) benefits going back to the date of injury, several months before the hearing.  To the contrary, the employer had provided medical treatment for an injury to the right shoulder only, and denied the neck was involved.  The employer also denied the claimant was entitled to TTD, asserting she had refused the employer’s offer of light duty work.  But again, no one was at the hearing on the employer’s behalf to present these defenses and supporting evidence.

After the hearing, the employer’s TPA obtained the relevant documents, and referred the file to my office in time to decide whether an appeal might be possible.  Of course, the situation looked very bleak when I initially reviewed the file and spoke with the claimant’s attorney.  But when I received the certified Order from the Single Commissioner (which had been prepared by the claimant’s attorney), I realized we might actually have a chance of success on appeal.  The Commissioner had essentially entered a “default” judgment at the hearing.  The Commissioner did not take sufficient testimony from the claimant or review any narrative medical records.  He allowed the claimant’s attorney to simply recite what the claimant asserted were the facts of the case, but did not require the attorney to put forth any evidence to support many of these allegations.  As a result, I filed an appeal, and asserted that there was insufficient testimony and evidence in the record to support the Single Commissioner’s order.  I argued that, even though the employer had not made an appearance at the hearing, the claimant was still required to prove her claim with a preponderance of the evidence.

The Full Commission panel agreed with our arguments on appeal.  The panel vacated the single commissioner’s order and remanded the case for a completely new hearing.  As a result, the employer will have the opportunity to present medical evidence and testimony to support its various defenses.

I think there are several important takeaways here.  First, all employers should work closely with their insurance carriers and TPAs to ensure that all time-sensitive documents are identified and responded to by claims managers and, where appropriate, defense counsel.  The employer in my case could very well have been in a much worse position if the claimant’s attorney had the foresight to simply ask the right questions when his client testified at the initial hearing, and present the relevant medical records to the hearing Commissioner.  Without any contrary evidence presented by the employer, the Commissioner would have had no choice but to rule in favor of the claimant, and the employer would not have had grounds for appeal.  Furthermore, the employer in my case still had to pay sanctions to the Commission for its failure to make an appearance at the Single-Commissioner hearing, even though we were successful on appeal.  So the first lesson is to avoid this situation entirely by putting procedures in place that will guarantee an appropriate response to time-sensitive documents.

Second, the fact that the full commission panel vacated the single commissioner’s order in this case demonstrates that the commission does actually require evidence to support a claim or a defense.  Often it seems that, no matter how hard we try as representatives for employers and insurance carriers, the Commission awards benefits even in highly questionable claims.  But the outcome in this case confirms that the Commission will at least require that some actual evidence be presented to support a claim.  Although workers’ compensation cases are adjudicated in an administrative court with relaxed rules regarding admissibility of evidence and other court procedures, an attorney cannot simply tell the commissioner the facts of the case.  He or she must actually present testimony and medical evidence.  The same rule applies to employers and insurance carriers with regard to any defenses.  Assistance from employer representatives to identify relevant documents and witnesses (and help us get employer witnesses to actually attend a hearing) is absolutely crucial to our presentation of an effective defense.

Finally, cases that initially appear very unfavorable can often be improved.  Although the expected outcome of a claim may initially seem bleak, it is always worth taking a second look to identify any possible means of improving circumstances or reducing possible exposure.  In my case, I must admit that I was very pessimistic when I first reviewed the file.  I initially advised my client that the likelihood of success on appeal was very slim as a result of the employer having not responded to the claimant’s hearing request, and having failed to appear at the Single-Commissioner hearing. However, after I received the Commissioner’s order and saw that there were some serious flaws, my client and I realized that we actually had a decent opportunity on appeal.  By working closely with the claims manager at the TPA and representatives of the employer, we were able to obtain a favorable result, and my client will have an opportunity to present evidence in support of its defenses at a new hearing.  Similarly, in many claims that are initially admitted as compensable work-related accidents, later investigation reveals grounds to deny compensability.  In those instances, employers and insurance carriers should remember that you are not absolutely bound by your initial payment of benefits.

Please feel free to comment if you have had any similar experiences where “lemon” claims were turned into “lemonade.”  Also, please do not hesitate to contact us if you have any specific questions or concerns.