Significant Case Summaries
EMERGENCY REGULATION AFFECTING APPROVAL OF SETTLEMENT AGREEMENTS
EFFECTIVE JANUARY 4, 2010
COMAR 14.09.01.01 Definitions and
COMAR 14.09.01.19 Agreements of Final Compromise and Settlement
In recognition of rights of Medicare and the increased obligations of parties to report qualifying claims to Medicare, and to protect Medicare from incurring obligations for medical treatment that is related to a workers’ compensation claim, the WCC passed emergency regulations affecting the form and approval of settlement agreements. There is no longer an official template for settlement agreements provided by the WCC. The parties must tailor each agreement to each specific case. In addition, the Guide Form that must accompany the settlement has been changed to require more information.
The following is information that must be provided for every settlement agreement:
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total amount of indemnity benefits paid to the Claimant
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a statement confirming that the interests of Medicare have been considered by the parties, and how they have been considered
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a statement that the Insurer shall reimburse Medicare for any provisional or conditional payments made by Medicare that are ultimately determined to be the responsibility of the Employer/Insurer
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the gross value of all future payments to be paid pursuant to an annuity (not present value)
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if the Insurer makes an assignment of any of its obligations to a third party, the agreement shall contain affirmative language confirming that the Insurer shall resume its obligation for all remaining payments in the event of default by a third party
The following information must be provided if future medical is to be closed:
· If the settlement falls within Medicare’s thresholds for review by Medicare, the settlement must be approved by CMS before it will be approved by the WCC. Most parties are settling the indemnity portion of the case first, and then completing a second settlement agreement when closing the medical portion of the case after approval has been received from Medicare
· If the settlement falls outside Medicare’s thresholds, it will be approved provided that the parties set forth that Medicare’s interests have been considered, identify the amount of the settlement apportioned to future medical care, or provide a set aside for future medical expenses using a formal set aside allocation that complies with Medicare’s guidelines. Any projected future medical expenses must be supported by an opinion from a physician setting forth the future medical treatment and associated cost of same
· If the case being settled is contested, has been disallowed by the WC and is pending on appeal, then the requirement for a medical report supporting future medical may be excused
REGULATION AFFECTING ATTORNEYS FEES
EFFECTIVE JANUARY 14, 2010
COMAR 14.09.05.25
Highlights of the new regulation as follows:
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Attorney fees may be awarded in structured settlements, setting forth a tiered structure for calculation of attorneys fees based on the settlement amount and its relationship to the State AWW;
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Any sums placed in Medicare Set Aside may not be included as part of the settlement for calculation of an attorneys fee;
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The Commission may not regulate attorneys fees charged for administration of a Medicare Set Aside once a case is resolved by settlement.
PROPOSED REGULATION AFFECTING ATTORNEYS FEES
COMAR 14.09.05.25
Highlights of the proposed regulation as follows:
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In calculating attorney fee, an attorney may not include as part of the settlement any amounts paid for medical services and prescription drugs, including monies allocated to future medical expenses through a formal set-aside allocation, any monies apportioned to future medical benefits, any monies already paid or owing for medical services or prescription drugs;
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Addressing a schedule covering fees awarded for awards of worsening of condition on permanency, settlement post permanency award
REGULATION AFFECTING VOCATIONAL REHABILITATION
EFFECTIVE APRIL 22, 2010
COMAR 14.09.05.
Amended Regulations: .01 and .04 — .07
New Regulations: .08 — .12
Highlights of the new regulation as follows: (1) The Employer/Insurer may no longer unilaterally assign a vocational rehabilitation counselor. If the parties cannot agree on a counselor, then the Commission will pick a counselor from candidates selected by the parties. The parties may only utilize a counselor that is on the Commissions approved list; (2) There will be an expedited procedure for a hearing within five days of a request by any party in the event that there is a dispute over vocational rehabilitation; (3) The Employer/Insurer will have to continue payment of benefits until the issue is resolved by a hearing; (4) The format for the Stipulated Vocational Rehabilitation Plan has changed. Once a stipulated rehabilitation plan expires, the vocational counselor is required to make recommendations for additional action, and if the parties cannot agree on a recommendation, a hearing will be set within five days to address the issue; (5) The Commission will be given the discretion to award attorney fees in disputes arising out of VR issues when deemed necessary.
2009/2010 COMPENSATION RATES
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2009
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2010
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State AWW
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$906.00
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$920.00
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Max Temp. Total
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$906.00
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$920.00
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Max Perm. Total
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$906.00
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$920.00
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Max Dependency
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$906.00
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$920.00
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1st Tier Perm Partial
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$130.00
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$142.00
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2nd Tier Perm Partial
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$302.00
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$307.00
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Max Serious Disability
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$680.00
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$690.00
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WHEN MAKING A DETERMINATION OF STATUTORY EMPLOYER LIABILITY, THE QUESTION OF WHETHER THE CLAIMANT IS A “COVERED EMPLOYEE” UNDER THE ACT IS DETERMINED BY THE CLAMANT’S RELATIONSHIP TO THE
STATUTORY EMPLOYER
W.M. Schlosser Co., Inc., et al. v. UEF, September Term, 2009, No. 112 (Md.Ct.App., May 12, 2010).
The Claimant suffered an accidental injury while working wholly outside of this State in the District of Columbia for Rose Industrial Services, the subcontractor of Schlosser, which had workers' compensation insurance coverage in D.C. but not in Maryland, where Claimant resided. The Commission had to determine whether the statutory employer (Schlosser) or the UEF was responsible to pay compensation to the Claimant. The issue arises because Mr. Johnson filed for workers' compensation benefits in Maryland for his accidental injury that occurred solely in the District of Columbia, where Rose only had workers' compensation coverage; Schlosser had workers' compensation coverage in Maryland.
The Workers' Compensation Commission found the situs for the claim to be the determining factor, when determining that Schlosser was a "statutory employer". It determined that Schlosser was not liable for the claim because there would not have been workers' compensation jurisdiction over a claim in Maryland against Schlosser if it had been the direct employer of Claimant. The Circuit Court affirmed the Commission, and the Court of Special Appeals reversed, basing its decision on public policy concerns, rather than on a situs determination, without deference to the determination by the Workers' Compensation Commission.
The court of appeals concluded that the Fund was liable for workers' compensation benefits payable to the employee, because the employee's direct employer, the subcontractor, was uninsured in Maryland. The court of appeals noted, even if the employee had worked directly for the principal contractor, his work would have been wholly outside of Maryland under Md. Code Ann., Lab. & Empl. § 9-203(c), and thus, he would not have been a "covered employee" of the principal contractor.
THE COMMISSION MAY COMBINE SCHEDULED MEMBER AND OTHER CASES AWARDS TO REACH SECOND TIER PERMANENCY RATE AS LONG AS INJURIES STEM FROM A SINGLE ACCIDENT
Anderson/Robinson v. Montgomery Co. Bd. of Ed., September Term, 2008, No. 2853 (MD.Ct.Spec.App., May 6, 2010).
In the Anderson case, the Commission found that Claimant had suffered a 20% impairment to her body as a result of the injury to her back, and that half of the impairment was pre-existing, and half of the impairment (i.e., 10% impairment) was due to the accidental injury. The Commission also found that she had suffered a 59% impairment to her leg, of which only 9% was due to the accidental injury. These percentages of disability resulted in an award of 50 weeks of compensation for the back and 27 weeks of compensation for the leg. The Commission ordered the employer to pay Anderson 77 weeks of compensation, all at the second tier rate.
In the Robinson case, the Commission found that Robinson sustained a permanent partial disability resulting in 40% loss of use of the right hand/wrist; and has an overall 30% industrial disability to the body due to an injury to the back, 10% is due to this accidental injury and 20% is pre-existing. This finding was equivalent to an award of 100 weeks of compensation for the hand/wrist, plus 50 weeks of compensation for the back injury. The Commission determined that Robinson was entitled to be compensated at the second tier rate for the entire 150 weeks
Each worker received an award for a combination of injuries to a "scheduled" member under Md. Code Ann., Lab. & Empl. § 9-627(a) through (j) and injuries defined as "other cases" under Md. Code Ann., Lab. & Empl. § 9-627(k) arising from a single injury to each worker. The trial court held compensation for injury to a scheduled member could not be combined with compensation for other cases to meet the 75-week threshold for compensation at the second tier rate under Md. Code Ann., Lab. & Empl. § 9-629. The appellate court disagreed because (1) there was no ambiguity in the language of § 9-629, (2) the history of the creation of the second tier of compensation showed the legislature intended the Commission to consider the total compensation awarded due to one accident in deciding if the enhanced second tier rate applied, and (3) each worker was clearly awarded compensation for a period equal to or greater than 75 weeks for injuries sustained in a single accident
TO PROVE INDEPENDENT CONTRACTOR STATUS, THE ONLY TEST WITH
SPECIAL CONCLUSIVE SIGNIFICANCE IS THE POWER OR RIGHT TO CONTROL;
A BALD ASSERTION THAT A WORKER IS AN INDEPENDENT CONTRACT
BY VIRTUE OF SIGNING A FORM TO THAT EFFECT IS INSUFFICIENT.
Injured Workers’ Insurance Fund v. Orient Express Delivery Service, Inc., et al., 190 Md. App. 438 (Md. Ct. Spec. App., 2010)
A courier company had contracted with a company to provide delivery persons. The delivery persons did not work for any business other than the courier company. Likewise, the courier company almost exclusively used the delivery persons. Each individual delivery person that performed delivery services for the courier company executed an independent contractor agreement and a sole proprietor status form. The courier company submitted an application to IWIF for a workers' compensation insurance policy. In the application, the courier company represented that all of the company's deliveries were performed by subcontractors who had their own workers' compensation insurance policies. As part of an audit process, IWIF requested a certificate of insurance or other proof of workers' compensation coverage for delivery persons. The courier company did not provide this. IWIF filed a complaint against the courier company alleging that the courier company concealed information relating to the delivery persons who should have been counted toward premium assessments under the policy.
The Court noted the five criteria used in determining whether or not an employer/employee relationship exists between two parties: (1) the power to select and hire the employee, (2) the payment of wages, (3) the power to discharge, (4) the power to control the employee's conduct, and (5) whether the work is part of the regular business of the employer. Thus, the bald assertion that a worker is an independent contractor by virtue of signing a form to that effect is not sufficient.
WHEN INSTRUCTING A JURY ON THE ISSUE OF PROXIMATE CAUSE, A JURY MUST BE INSTRUCTED THAT THE PARTY APPEALING A DECISION BY THE WORKER’S COMPENSATION COMMISSION HAS THE BURDEN OF PROOF.
Wilson v. Shady Grove Adventist Hospital, September Term, 2008, No. 2588 (Ct. Spec. App. March 31, 2010).
Claimant worked as a psychiatric technician for Shady Grove Hospital. While restraining a patient, Claimant fell and injured his right knee and underwent surgery. Subsequently, he began complaining of pain in hisleft knee and an MRI of the left knee was ordered. A WCC hearing was held on the issue of whether the left knee injury was causally related to the work-related injury. The WCC authorized an MRI of the left knee and the Hospital appealed said decision. At trial, as to the issue of causation, the judge instructed the jury: "In this case causation means that [Claimant/Appellant's] work related injury of July 14, 2006, to his right knee, is a cause of the condition of his left knee."
The Court of Special Appeals noted that pursuant to Md. Labor and Employment Code Ann. § 9-745, the decision of the Workers' Compensation Commission is presumed to be prima facie correct. The party challenging the decision has the burden of proof. Thus, the jury was not properly instructed that the burden was on the Hospital/Appellee to prove that the WCC decision should be reversed because the right knee injury could not have caused the left knee condition or that there was another intervening cause. The causation instruction, as given, directed the jury that Claimant/Appellant had the burden of proving that the accident was a cause in-fact of the left knee condition, without any mention of the consideration of intervening causes. As a result the judgment of the trial court was reversed and the matter was remanded.
EMPLOYER’S VIRGINIA POLICY COULD NOT BE HELD TO COVER CLAIMANT BECAUSE HE COULD NOT SEEK BENEFITS UNDER VIRGINIA LAW AS THE EMPLOYMENT CONTRACT WAS MADE IN MARYLAND, HIS WORK WAS NOT TEMPORARY, HE PRINCIPALLY WORKED IN MARYLAND AT THE TIME OF INJURY AND MARYLAND REQUIRES EMPLOYER TO HAVE INSURANCE.
Granite State Ins. Co. v. Hernandez,, September Term, 2008, No. 2497 (Md. Ct. Spec. App. March 30, 2010).
Claimant was injured while working as an employee of Rhino Shield. The employer used a Virginia address as a business address and purchased workers' compensation insurance through Granite State for injuries occurring in Virginia. The policy through Granite State allowed coverage for workers' compensation claims arising outside of Virginia pursuant to the Residual Market Limited Other States Insurance Endorsement only when (1) he was hired under a contract made in Virginia or, at the time of injury, he was principally employed there, (2) he did not claim benefits in a state where, at the time of injury, the employer had to have workers' compensation insurance, and (3) his work in the state in which he sought benefits was temporary. A worker’s compensation claim was filed on behalf of Claimant. The WCC found that Granite State was the proper insurer. Granite State appealed on the ground that it was not the proper insurer and the circuit court upheld the Commission's decision.
The Court of Special Appeals found that the Claimant would not have been entitled to workers' compensation benefits if a claim had been filed in Virginia. This was due to the fact that Virginia law requires that workers' compensation benefits be provided to an employee who has sustained an injury in a work-related accident outside of Virginia only if the contract of employment was made in Virginia and the employer's place of business is in Virginia, provided that the employment contract was not expressly for service exclusively outside Virginia. Here, the Claimant was hired under a contract of employment made in Maryland and, at the time of his injury, was principally employed in Maryland. The contract was not expressly for service exclusively outside Virginia. Under Maryland law, Rhino Shield was required to provide workers' compensation coverage for Claimant as a covered employee, but failed to do so. The Court held that the circuit court erred in upholding the Commission's decision because, in failing to apply the applicable law, it expanded the insurer's contractual commitment under the policy beyond what was contemplated by the parties. The judgment of the Circuit Court was reversed.
a party appealing to the circuit court from a decision by the Workers’ Compensation Commission
must cross-appeal in order to challenge a portion of the Commission’s decision
Darby v. Marley Cooling Tower Co., September Term, 2008, No. 2242 (Ct. Spec. App. March 1, 2010).
The claimant filed a claim with the Commission seeking temporary total disability (“TTD”) from December 6, 2005, and thereafter. The Commission denied TTD, but ordered the employer and insurer to pay causally related medical expenses. The employer and insurer petitioned for judicial review to the Circuit Court for Baltimore County, alleging that the Commission erred when it found that the claimant sustained an injury, and ordered the employer and insurer to pay causally related medical bills. The claimant responded by stating his intent to participate in the appeal. Eventually, the employer and insurer voluntarily moved to dismiss the appeal. The claimant opposed the dismissal, arguing that he intended to challenge the Commission’s denial of TTD. The court dismissed the appeal. The claimant appealed to the Court of Special Appeals.
The Court of Special Appeals held that the lower court correctly dismissed the appeal. The Court began its analysis by observing that the Workers’ Compensation statute does not make allow the circuit court on appeal to reverse any and all decisions by the Commission. Rather, the Court observed that standing questions in workers’ compensation appeals present the same issues as in any other type of appeals to the circuit court. The Court then recounted that ordinary appeals to the circuit court require aggrieved parties to either appeal or cross-appeal to obtain relief. Absent such action, a party merely can seek affirmance on the issues raised by the properly appealing party. In this case, the claimant never petitioned for judicial review of the Commission’s denial of TTD. Therefore, the only parties asserting a grievance were the employer and insurer. Consequently, the lower court’s dismissal of the appeal was proper in light of the employer and insurer’s motion to voluntarily dismiss the appeal.
a motion for summary judgment can be made at any time
DURING AN appeal from the Workers’ Compensation Commission
Benway v. Maryland Port Administration, September Term, 2008, No. 2260 (Ct. Spec. App. March 1, 2010).
The plaintiff filed a claim with the Workers’ Compensation Commission of Maryland seeking death benefits from the Maryland Port Administration and the injured Workers’ Insurance Fund as a result of the death of her husband. The Commission disallowed her claim. The plaintiff petitioned for judicial review in of the Commission’s decision in the circuit Court for Baltimore City. The Court issued a pre-trial scheduling order requiring summary judgment motions to be filed 5 months before trial. Over a month after the summary judgment motion deadline, the Maryland Port Administration moved for summary judgment. The court granted the motion.
On appeal, the plaintiff argued, most importantly, that the lower court erred when it considered the late filed motion for summary judgment. The Court of Special Appeals held that a party may move for summary judgment at any time. In doing so, the Court disregarded the fact that the predecessor to the current summary judgment rule allowed the filing of summary judgment “at any time,” but the current rule did not explicitly allow a motion for summary judgment at any time. The Court explained that the committee note to the summary judgment rule cited a case allowing parties to move for summary judgment at any time. Thus, the Court affirmed the lower court’s grant of summary judgment.
A PARTY SEEKING TO RECOVER CHILD SUPPORT ARREARAGES CANNOT
GARNISH JUDGMENTS AND SETTLEMENTS
Rosemann v. Salsbury, Clements, Bekman, Marder & Adkins, LLC, 987 A.2d 48 (Md. Ct. Spec. App. January 13, 2010).
A father obtained two judgments totaling over $33,000 against a mother for child support arrearages. The father south writs to garnish from a law firm that represented the mother $30,000 that the firm held for the mother in connection with the settlement of a civil claim against a third party for alleged personal injuries suffered by the mother. The mother argued that the money received as part of the settlement in the personal injury case was exempt from execution under Md. Code Ann., Courts & Judicial Proceedings § 11-504(b)(2), which exempted “[m]oney payable in the event of . . . injury” from execution on a judgment.
The Court held that the plain language of the statute established that the money was exempt from execution. Furthermore, the General Assembly did not create an exception to this exemption for child support arrearages. The father argued that certain cases have construed statutes and constitutional provisions exempting property from legal process to be inapplicable against a claim for child support. The Court rejected this argument, distinguishing those cases on the grounds that they construed statutes exempting wages and unemployment benefit. Although this opinion arose out of a liability case, it might apply in the workers’ compensation context as well.
DETERMINATION OF COMPENSABILITY OF OCCUPATIONAL DISEASE,
CLAIMANT ONLY HAS TO SHOW THAT THE RISK FACTORS FOR DEVELOPING THE DISEASE, AND NOT THE DISEASE ITSELF, ARE A HAZARD INHERENT IN THE EMPLOYMENT
Black and Decker Corp. et al. v. Humbert, 2009 Md.App. LEXIS 179 (November 25, 2009).
Claimant was an electrician employee of Black and Decker since 1993. He filed a claim with the WCC alleging he sustained an occupational disease (right shoulder impingement syndrome) arising out of his employment. The WCC denied the compensability of the claim. Claimant appealed. The sole witnesses on appeal were the Claimant, and his treating physician. At trial, the Claimant testified that he had been an electrician for twenty-five years, and that the overhead activities in which he engaged (working on the lights in the ceilings, and similar work as an electrician that required over-head reaching) constituted "job duties typical of all the electricians . . ." that he had observed during his years in the profession. The treating physician testified that the claimant had a bone spur in his shoulder, and that the bone spur, combined with the Claimant’s repetitive work activity, caused the impingement syndrome.
The Employer moved for judgment at the close of the case which was denied. The jury found in favor of the Claimant. The Employer appealed, alleging that Claimant failed to establish that his condition was caused by the employment, and shoulder impingement syndrome was a hazard inherent in employment as an electrician.
The Court of Appeals affirmed, holding that (1) the Claimant only had to prove that the occupational disease (impingement syndrome) was caused in part, by the occupation; (2) to be compensable under LE 9-502(d)(1)(i), Claimant must only show that the risk factors (not the disease) are inherent in the nature of the employment (not the disease), and the Claimant’s testimony regarding his job duties, which were in his 25 years of experience typical to the profession of an electrician, was sufficient to show that repeated over-the-head arm movements were required for an electrician to perform his or her job.