No, it’s not a plain vanilla case concerning compensability.  It should cause you to look twice at many of your Indiana workers’ compensation claims.  This year the Indiana Supreme Court redefined our “arising out of” prong of the test for compensability in Milledge v. The Oaks, 784 N.E.2d 926 (Ind. 2003).

Ms. Milledge was an employee of The Oaks, a nursing home.  She was also diabetic.  One morning, as she walked from her car across the parking lot to the facility, she twisted her ankle.  There was no debris, crack, pothole, or other defect in the surface.  She did not trip over a curb or other obstruction.  In fact, no one will probably ever know why she twisted her ankle.  After she suffered the injury, she developed a blister on her ankle.  The blister became infected, then gangrenous, and finally her foot was amputated.

Because the injury occurred on the employer’s parking lot as she was preparing to report for work, there was no dispute that the injury arose “in the course of” her employment.  The employer did dispute, however, that the injury arose “out of” her employment.  Most adjusters likely would.  The employer prevailed before Single Hearing Member Linda Peterson Powell.   Not surprisingly,  the Full Board adopted Judge Powell’s decision.  Even less surprising was the Indiana Court of Appeals’ affirmation of the Full Board’s decision.   The Indiana Supreme Court granted transfer, however, and on March 14, 2003, reversed and remanded the case to the Worker’s Compensation Board, finding that the injury did, indeed, arise out of Ms. Milledge’s employment with The Oaks.

The Supreme Court discussed, and significantly altered the application of the types of risk that may result in injuries that arise in the course of employment.  The three categories of risk are:

1.      Risks distinctly associated with employment;

2.      Risks distinctly personal to the claimant; and

3.      Risks that are neither distinctly personal nor distinctly related to the employment.

Risks in the third category are known as “neutral risks.”

Relying on cases from other states, the Indiana Supreme Court held that in workers’ compensation claims that cannot be explained by a pre-existing illness or condition personal to the employee, an injury that arose in the course of employment is presumed to have arisen out of the employment.  The presumption is rebuttable, but it can only be rebutted by evidence that is within the control of the Plaintiff — her prior medical information.

The Court discussed that Indiana law does not require a Plaintiff to “prove a negative;” however, it requires an employer to do exactly that to successfully defend a claim for which the cause is not readily ascertainable if the injury arose in the course of employment.  The Court specifically referred to the “positional risk test” as follows:  “an injury arises out of the employment if it would not have occurred but for the fact that the conditions and obligations of the employment placed claimant in the position where he was injured.”  784 N.E.2d 926, 931. (emphasis in original).  The position where (and when) an employee is injured is the very nature of the “course of” element of compensability.

To take this reasoning one step further, if the mechanism of injury is not apparent, the injury is presumed to have arisen out of the employment because it arose in the course of employment.  The Milledge case significantly alters Indiana’s Worker’s Compensation law in at least two ways:

First, it shifts the burden of proof on the element of causation from the Plaintiff to the Defendant in many claims.  This overturns Milholland Sales & Engineering Co. v. Griffiths, 94 Ind. App. 62, 178 N.E. 458 (1931), which held that the Plaintiff has the burden to prove each and every element of his claim for workers’ compensation benefits.  It also appears to reverse Blevins v. Consumers Ice & Fuel Co., 129 Ind. App. 257, 156 N.E.2d 103 (1959), which held that compensability cannot be presumed in an unexplained injury if there is some evidence before the Board from which it can find that the accident did not arise out of employment.  Without reviewing the record of this case, one must presume that evidence was introduced that could have supported a finding that a blister, gangrene, and even amputation can occur in diabetic persons without any specific injury.

Second, it blends the two prongs of compensability into one.  No longer must each claimant establish that her injury arose out of and in the course of employment.  This apparently limits the application of Olinger Cosntr. Co. v. Moseby, 427 N.E.2d 910 (Ind. App. 1981) (holding that “[t]he phrases ‘out of’ the employment and ‘in the course of’ the employment have separate meanings and both requirements must be fulfilled before compensation is awarded.”)  Now, under Milledge, If the mechanism of injury is unclear, the claimant must only prove that the injury arose in the course of employment, then see whether or not the employer can prove that the injury was due to distinctly personal causes.

Milledge appears to make employers the virtual guarantors of their employees’ safety while on their premises or which traveling in furtherance of their business interests.  Because employers are limited in the information they can seek about prospective employees by the Americans with Disabilities Act, it is very unlikely that they will be able to obtain the information necessary to rebut the presumption that an unexplained injury that arose in the course of employment also arose out of employment.   Little short of legislative amendment is likely to change the law back to its previous state requiring the claimant to prove the elements of her claim for workers’ compensation benefits.