SIGNIFICANT CASE SUMMARY

West Virginia Case Summary

West Virginia Division of Highways v. Victor Shultz, Jr.
Intermediate Court of Appeals of West Virginia
No. 23-ICA-244

Decided: November 1, 2023

Counsel fees were not warranted for the overturned denial of compensation where the Employer had a reasonable argument that the injury did not result from the Claimant’s employment.

Background

The Claimant was involved in a motor vehicle accident when the work truck he was driving flipped over and ejected the Claimant onto the pavement, causing multiple injuries. The claim administrator issued an order denying compensability of the claim. The administrator based this ruling on the police accident report, which reflected that the Claimant was using his cell phone at the time of the accident to elicit nude photos while driving and swerving egregiously. The Claimant protested the order, with the Board of Review overturning it and finding the claim compensable. The Board also awarded counsel fees to the Claimant for an unreasonable denial. The Employer appealed the imposition of counsel fees to the Intermediate Court.

Holding

The Intermediate Court overturned the Board’s imposition of unreasonable denial counsel fees. The Court cited the WV Code, which reflects that a denial is unreasonable if the Employer is unable to show that it had evidence or a legal basis at the time the denial was issued. The Court ruled that the accident report supported at least a reasonable argument that the injury did not “result from” the Claimant’s employment.

Takeaway

An insurer or administrator should be mindful that the denial of a claim, benefits, or medical treatment must have a reasonable basis either factually or legally at the time the denial is made. Otherwise, counsel fees for unreasonable denial can be awarded.

Questions about this case can be directed to Evan Jenkins at (412) 926-1419 or ejenkins@tthlaw.com.