Monday, May 20, 2013

Claim Denial and the "Reasonable Contest"

Denial of an injury claim may be the best defense to a questionable Workers' Comp disability case.

Some old sage insurance claims professionals will rely on their years of experience and a "gut feeling" when the alleged "facts" of a claim report do not "add up".  The risk associated with denial of a reported injury claim is that the Workers' Compensation Judge may find there was an unreasonable contest of the claim and assess the payment of claimant attorney fees, in addition to the wage loss benefits.  At times, incurring this risk is justified. [Section 440 allows the assessment of attorney fees].

Wrecsics v. WCAB (National Carriers, Inc.) an unreported memorandum decision of of the Commonwealth Court of Pennsylvania authored by Senior Judge Friedman on August 24, 2012, illustrates this employer strategy.
Recently, the Supreme Court of Pennsylvania denied this Employee's Petition for Allowance of Appeal via per curiam order dated May 9, 2013.

Factual and Procedural Background

Employee alleged he slipped and fell in the course of his duties as a truck driver with Employer.
Employer filed a Notice of Denial that a work related injury occurred or that an injury occured within the scope of his employment.

Employee testified. Employee presented a fact witness. Employee presented 2 Medical Expert witnesses, who relied upon Employee's description of the work injury.
Employer presented 2 fact witnesses and one Medical Expert witness.

WCJ found Employee was not credible regarding (1) the occurrence of a work related fall or (2) the extent of his injuries. As Employee's Medical Experts relied upon his version of events, which was discredited, their opinion testimony was rejected.

Employee Appeal, WCJ did not author a "Reasoned Decision".

Section 422 of the Pennsylvania Workers' Compensation Act requires a "reasoned decision",
"containing findings of fact and conclusions of law based upon the evidence as a whole which clearly states and explains the rationale for the decisions so that all can determine how and why a particular result was reached...". See also: Daniels v. WCAB (Tristate Transport) (Pa. 2003).

Application of the Legal Standard

Here the Employee testified before the WCJ. The WCJ observed employee's demeanor. Where a witness testifies before the WCJ, a mere conclusion that the witness was credible (or not) is sufficient.

A different rule applies when the witness does not appear before the WCJ. When the witness does not appear before the WCJ and only testifies via deposition, in this situation, the WCJ must articulate an actual objective basis for rejecting the witness testimony.

In Wrecsics, the Employee appeared and testified before the WCJ.
In addition to the WCJ observations, this WCJ provided "reasons" for rejecting Employee's testimony.
These reasons are similar to those "gut feelings" that lead the experienced claims professional to question and deny an injury claim:

(1) Employee and his girlfriend did not go into the truck stop to contemporaneously report his slip and fall injury after it occurred,

(2) Employee testified he injured his right middle finger when he hit the ground and felt immediate swelling of his ankle, but waited 24 hours before seeking medical attention,

(3) medical records showed no physical exam findings of bruising of the back, no redness or abrasion of the finger and only mild tenderness and swelling of the ankle,

(4) Employee testimony was inconsistent, he testified regarding his intense pain, such that he had difficulty taking care of himself, yet he was able to climb into the truck cab, start the truck and move it, two weeks after these alleged injuries.

(5) Employee submitted to his employer an incorrect trip log, which he did not rebut.

The Commonwealth Court provided an apt summary, "Here, the WCJ did not disregard or ignore Claimant's testimony. Rather, the WCJ fully considered Claimant's testimony, summarized it, and ultimately rejected it on credibility grounds...". slip opinion at page 5.

The acceptance of an Employee history of injury by the Employer medical expert is not an admission or concession that the injury is work-related. Similarly, the Employee medical expert assumption of a work injury based solely upon the eomployee history, leading to a medical diagnosis, may be rejected where the WCJ rejects that underlying history. See: Sewell v. WCAB (City of Philadelphia) (Pa. Cmwlth. 2001). 

The general rule is that Employee has the burden of proving all of the elements to establish a compensable injury in a claim petition. The Employee must prove that his injury "arose in his employment and was related thereto". [ Inglis House v. WCAB (Reedy) (Pa. 1993)].
This Employee failed to meet his burden of proof by credible testimony.

Practice Pointers:

1. How does one assess the "good" cases versus the "bad" cases to accept or deny?
At the outset of an injury investigation, the workers compensation claims professional must secure statements from all witnesses and involved parties, as soon as possible after the injury report. Document the facts present. Document the "omissions", ie., those facts that are typically present, but which are absent in this case.

2. Question the credibility and logic of the alleged injury history. Is this history corroborated by any witness or any written record? Is this history consistent with how one would be expected to act? Does the employee version "make sense"?  Yes, at times the truth is stranger than fiction... but an unusual story bears further investigation.

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