Appeals Board Hears Arguments on Attorneys’ Fees Statutory Provisions

By Jane Salem, Staff Attorney, Nashville

The Tennessee Workers’ Compensation Appeals Board took up a topic of interest to most practitioners – fees – in a pair of cases at its most recent docket of oral arguments.

The judges dived deeply into two separate provisions of the Workers’ Compensation Law authorizing fees to employees’ attorneys at the January 10 arguments in Jackson. Altogether, the Board heard five cases, several of which presented issues of first impression.

In Thompson v. Comcast Corp., the trial court awarded David Thompson’s counsel fees under section 50-6-226(d)(1)(B). That provision allows fees when an employer “wrongfully denies a claim…, or fails to timely initiate” benefits. Judge Thomas Wyatt awarded fees because Comcast failed to provide a panel of pain-management specialists for several months after the authorized treating physician made the referral. Comcast conducted an investigation after the referral but didn’t seek another medical opinion.

Comcast’s attorney, Chris Sherman, emphasized that it made “a business decision” to authorize treatment up to that point, but he maintained an employer has a right to right to investigate questionable claims. He further argued that the legislative history is “very sparse” and that the judges should construe “wrongfully” into the second clause of the statutory provision. “If you’re going to have the wrongful standard apply to one, it should apply to both,” Sherman said.

But Michael Fisher, Thompson’s attorney, said that lawmakers inserted a comma in the provision for a reason: so “wrongfully” only applies to denials. The statute is unambiguous, he said, and “the failure to timely initiate benefits is wrongful in and of itself.”

Fisher further argued that fee awards shouldn’t be available only at the compensation-hearing stage, reasoning that “the salient facts won’t change” between the expedited and compensation hearings. This kind of rule would discourage settlements, he added.

Another issue in Thompson was whether Judge Wyatt erred by ordering Comcast to authorize treatment with the pain-management specialist of his choosing rather than ordering a panel.

The judges examined another attorney-fee provision, section 50-6-226(a), in Bowlin v. Servall Pest Control. The trial court, Judge Allen Phillips, ordered payment of unauthorized medical bills totaling more than $89,000 and held that Bowlin’s counsel was entitled to a twenty-percent fee on that award of medical benefits.

Servall’s counsel, Gordon Aulgur, agreed that pre-Reform Act cases supported an award of fees on medical benefits, but those orders were made after full trials. He urged the Appeals Board to rule that fees on medical benefits should only be available after a full compensation hearing.

“If this stands, my approach will change drastically on expedited hearings,” Aulgur said, explaining that had he known his client was vulnerable for the fee award, he might have hired an expert and conducted additional depositions, adding delay and expense to both parties.

Aulgur said he wasn’t sure how to comply with the order; should Comcast pay the medical bills according to the fee schedule, or does it pay providers the full amounts plus or minus 20 percent to opposing counsel?

In response, Bowlin’s lawyer, Monica Rejaei, stated that lawmakers didn’t change section -226(a) when they passed the 2014 reforms. This suggests they didn’t intend any distinctions between the availability of fee awards at expedited hearings versus compensation hearings. She acknowledged that section -226(a)(2)(D) references fees in a “final order” and that an expedited hearing isn’t a full trial, but it requires substantial preparation and provides “judicial review.”

Bowlin also presented the issue of whether an employer is entitled as a member of the Drug-Free Workplace Program to the presumption that an employee’s drug use was the proximate cause of the injury. Servall didn’t file the annual application to the Drug-Free Workplace Program in 2015−the year Bowlin became injured−but said its documented participation every other year since 2004 evidenced “substantial compliance.”

“It’s such a minor aspect of the program,” Aulgur said. Moreover, Bowlin had notice of Servall’s status as a drug-free workplace.

Rejaei countered that the program’s procedural requirements are “mandatory not directory.”

In another case, the judges considered the limits of the “personal comfort” doctrine.

In Jacobs v. Bridgestone Americas, Thomas Jacobs was about to smoke outside in cold weather near a barrel containing a fire, when a coworker poured gasoline on the flames. He was burnt severely.

Bridgestone’s lawyer, Nick Akins, argued that compensability “defies all common sense,” given that the accident occurred at the union hall, several miles away from the plant, in a fenced-in area where Bridgestone had no access and no on-site supervisors, and where union members installed stereo equipment for parties. Akins conceded the collective bargaining agreement allowed Jacobs’ presence at the hall as a union officer but questioned whether the agreement contemplated pouring gasoline on flames.

Employee lawyer Donald Byrd said Jacobs was waiting on an email relating to union business at the time of the accident, making the claim work-related.

Bridgestone also challenged whether it or the union was Jacobs’ employer. The trial court, Judge Robert Durham, found the claim compensable, noting that it was the co-worker and not Jacobs who poured the gasoline. Judge Durham also ruled that Bridgestone was the employer.

Compensability was likewise disputed in Burnett v. Builders Transportation. Counsel for the employer, Mike Jones, said the judges should infer from the testimony of a supervisor and safety and risk director that Jay Burnett didn’t use safety equipment, resulting in his severe injury. Burnett testified via affidavit that he used the equipment, but his supervisor testified live that he inspected the safety equipment after the accident and didn’t think anyone recently used it.

Jones argued the appellate judges “were in the same position” to assess Burnett’s credibility as was the trial court, Judge Deana Seymour, because he testified in writing rather than live. Jones further argued that Judge Seymour improperly excluded evidence but acknowledged he didn’t make an offer of proof at the expedited hearing.

Attorney Shannon Toon, representing Burnett, maintained he used the equipment, but even if he didn’t, nothing in the record suggested Burnett’s actions were “willful.”

Finally, in Batey v. Deliver This, Inc., Judge Wyatt awarded permanent partial disability benefits and “extraordinary relief” under section -242(a)(2). Deliver This argued that Christopher Batey’s injury was not permanent because the authorized treating physician returned him to work without restrictions. Several months later, however, the physician completed a C-32 listing multiple restrictions. Judge Wyatt found the C-32 the “best evidence” of the work restrictions.

Counsel for Deliver This, Michael Haynie, said Judge Wyatt overlooked deposition testimony to the contrary in making that ruling. He also erred by ruling that the “employee’s pre-injury occupation” refers to his pre-injury job, contending that “occupation” refers to an employee’s profession or trade.

The Appeals Board – Presiding Judge Marshall Davidson, Judge Timothy Conner and Judge David Hensley—has 20 business days after oral argument to issue decisions for the expedited hearing appeals and 45 days for Batey because it was a compensation hearing.

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The Appeals Board Judges are, left to right, Judge Timothy Conner, Presiding Judge Marshall Davidson, and Judge David Hensley. File photo by Anna Sudberry.

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