Indiana Worker's Compensation Institute

It is common knowledge in the workers’ compensation community that the Workers’ Compensation Act provides the exclusive remedy to employees pursuing damages due to a workplace injury, and any claims for those damages must be filed with the Workers’ Compensation Board.  However, in the recent case of Amerisafe Risk Services et al. v. The Estate of Hazel D. Wadsak et al., (Nov. 9, 2012) the trial court was faced with two specific questions concerning the exclusive remedy doctrine:  (1) Does the doctrine apply when the employee dies and the claim is made by his estate? And (2) Does the doctrine apply when the allegation of wrongdoing is against the workers’ compensation insurance company?  In both cases, the ultimate answer is “yes.”

Mr. Wadsack was a 19 year old employee of Mills Tree Service in 2008 when he suffered an injury by electrocution when a tree limb touched a power line.  While he was in an induced coma recovering from his injuries, his parents were appointed as temporary guardians.  The reported decision does not indicate the course of Mr. Wadsack’s treatment.  However, Mr. Wadsack’s parents claim that the insurance company’s handling of the workers’ compensation claim deprived their son of necessary medical care resulting in “extreme emotional distress” to his mother and resulting in her death.  They sued the worker’s compensation carrier directly in civil court, and the carrier requested dismissal of the claim under the exclusive remedy doctrine.

The trial court, after a hearing on the motion to dismiss, denied the motion without explanation.  However, the carrier was allowed to appeal the motion’s denial.  The Court of Appeals has held that the trial court lacked subject matter jurisdiction over the claim and directed the Wadsacks to take their complaint to the Board.  It ruled that the exclusive remedy doctrine continues to apply when the complaint is made by the “personal representatives or next of kin” of employee.  Furthermore, any bad faith claim against the provider is only subject to review by the Workers’ Compensation Board under Ind. Code § 22-3-4-12.1(a).

While this decision may not appear to be noteworthy to those who handle worker’s compensation claims routinely, it nevertheless reminds us that not all attorneys, and not all trial courts, understand the impact of the exclusive remedy doctrine.  All claims that stem from a workplace injury must be adjudicated before the Workers’ Compensation Board.  The risk of being uninformed of this restriction can be significant.

Janet Stewart suffered an injury on December 5, 2003 while working as a PE teacher for Richmond Community Schools. Ms. Stewart was assisting a student in a gymnastic maneuver when the student fell on her causing Ms. Stewart to break her right leg. While recovering from that injury, Ms. Stewart fell again at home fracturing her right hip. Treatment for the broken leg was provided without dispute. However, treatment for the hip injury was denied by the employer as not work related. Ms. Stewart filed an Application for Adjustment of Claim with the Board seeking workers’ compensation benefits for the hip injury.

Following an evidentiary hearing, the Hearing Member found that Ms. Stewart’s hip injury was caused by the original work injury, and he awarded her Permanent Total Disability as a result of her injury. On appeal, the Full Board reversed the finding of PTD and remanded the case to the Hearing Member for a determination of Ms. Stewart’s PPI rating.

Ms. Stewart did not immediately seek an appeal to the Court of Appeals. She continued to argue that she was PTD on remand, but she stated, in the alternative, that her PPI rating was be 39% of the body. After review of the additional evidence submitted, the Hearing Member found that Ms. Stewart had suffered a 39% whole body PPI. Ms. Stewart appealed that ruling to the Full Board. The Full Board affirmed the PPI rating and Ms. Stewart then perfected her appeal to the Court of Appeals arguing that she was PTD as a result of the work injury, and the PPI awarded was inadequate to compensate her for her injuries.

In the decision rendered by the Court of Appeals, Janet Stewart v. Richmond Community Schools, 964 Ind. App. 927 (Ind. Ct. App. 2012), the court looked closely at the procedural history of the case. It relied on a prior Supreme Court’s holding in Cox v. Worker’s Comp. Bd., 675 N.E.2d 1053 (Ind. 1996) that “an order regarding temporary total disability benefits is a final decision subject to appellate review, even though the parties’ dispute is not yet fully resolved as to all issues.” Id. At 1056-57. Based on this prior holding, the Stewart Court then found that Ms. Stewart had waived her right to claim PTD. They reasoned that a reversal of the PTD determination during the first Full Board review was “analogous to a ruling on temporary total disability” as discussed in Cox. 964 N.E.2d 930-31. Ms. Stewart’s failure to take an immediate appeal to the Court of Appeals once the PTD finding was reversed by the Full Board was, therefore, held to be a waiver of her right to appeal it later. Id.

This case should serve as a warning to future litigants. The remand of a case by the Full Board to the original Hearing Member may nevertheless start the 30 day deadline for appeal of the Full Board decision to the Court of Appeals if that remand decision impacts the award (or denial) of disability benefits to the employee.

Diligent worker’s compensation managers, adjusters and defense attorneys justifiably strive to identify compensability issues and weed out cases that arguably do not create compensable claims.  Such efforts appropriately manage worker’s compensation costs by eliminating claims that fall outside the protections of the compensation laws.  Should employers always resist accepting claims as compensable when the facts present arguments against compensability?  A recently decided Indiana premises liability case highlights the importance of recognizing that an employer may prefer a finding of compensability in situations that present issues as to whether the injury arose out of and in the course of employment.

The Indiana Court of Appeals recently decided just such a case in Curry v. D.A.L.L. Annointed, Inc. (Ind. Ct. App. 2012).  The plaintiff, Gladys Curry, worked at a fast food  restaurant operated by D.A.L.L.  On her day off, Curry came to the restaurant to attend an employee meeting.  The meeting started at 5:00 p.m., but Curry arrived at 3:45 p.m. to eat a meal before the meeting.  The evidence did not establish whether D.A.L.L. required Curry to attend the meeting or whether she received pay for attending the meeting, but Curry clearly was not on the clock while eating her meal.  Curry took her food outside to eat with other employees who came to attend the meeting.  Curry suffered injuries when she tripped and fell while taking her trash to a trash can.  All of this occurred before the meeting began.

The employer, through its worker’s compensation carrier, directed her medical treatment and paid wage benefits to Curry while she recovered from the injury.  Curry did not request that she receive worker’s compensation benefits for the injury, but rather, the employer opted to treat the case as a compensable injury from the outset.

Curry and her husband sued the employer for negligence in a premises liability tort suit.  They sought tort damages for the injuries and for the husband’s loss of consortium.  The employer moved to dismiss the suit on the grounds that the Indiana Worker’s Compensation Act provided the exclusive remedy for Curry to seek compensation for her injury.  The trial court agreed with the employer and dismissed the suit.  On appeal, the Court of Appeals affirmed the dismissal.  The Currys argued that because Gladys’s injury did not occur during work time, the injury did not arise out of and in the course her employment.  They also argued that the case did not fall under the Act because Gladys did not affirmatively seek worker’s compensation benefits.   The Court rejected their position, agreeing with the employer that the injury fell within the Act and the Act provided the sole remedy, stating, “The connection between [the employer’s] interest in improving the business by holding employee meetings and Gladys’s presence on the premises as an employee waiting for the meeting to begin, places jurisdiction of her claim for compensation for injuries sustained while on those premises squarely within the Act.”

Although the facts of this case presented a situation in which the employer could have made a good faith argument about compensability of the claim, the Court of Appeals decision finding compensability underscores that employers may prefer to find themselves in the workers compensation arena rather than the tort arena.   A tort suit would involve not only claims for medical treatment and lost wages, but also claims for pain and suffering, loss of consortium, and under extreme circumstances, punitive damages.  Premises liability trip and fall cases can result in substantial judgments if juries believe that property owners ignored the safety of those on their premises.  In the worker’s compensation framework, the employer could direct the medical care (and presumably control costs) and avoid exposure to damages that could greatly exceed those available in a worker’s compensation case.

The Curry decision illustrates the point that worker’s compensation claims provide not only a means for employees to obtain treatment and benefits, but also a way for employers to avoid exposure to potentially more costly tort claims and remedies.  A worker’s compensation claim may seem like a sword for employees, but it also creates a shield for employers.  In close cases, even if an employer may have a good faith argument against compensability, the employer may derive some benefit if it treats the case as compensable and the case is ultimately determined to be compensable.  Before denying the compensability of a workplace injury,  in a close case employers and carriers should engage in a thoughtful analysis of the facts and exposure of the case.  The employer may well prefer the devil it knows in the comp universe to the less predictable one lurking in the tort universe.

If you have any questions, please contact an Ice Miller Workers’ Compensation attorney.

Since 1992 and the publication of the decision in Grand Lodge Free & Accepted Masons v. Jones, 590 N.E.2d 653 (Ind.Ct. App. 1992), employers have struggled with the parameters of compensable ongoing palliative care once an employee reaches MMI from a work injury. The Court in the Grand Lodge case held that Grand Lodge must continue to pay for Susan Jones’s use of her TENS unit, even though her injury was quiescent and no further medical treatment was indicated, because her treating physician considered the ongoing use of the TENS unit in determining her PPI rating. The Court held that the employer’s financial obligation to provide the TENS unit “is to continue only so long as it is prescribed, not indefinitely.” Id. at 656.

Since the Grand Lodge case was published, employees and their attorneys have used that holding to argue the value of any Award or settlement must include the cost of “future ongoing palliative care” regardless of whether there is a specific recommendation for that care by a treating physician. Furthermore, since every physician views each patient differently, it is not unusual to have multiple inconsistent medical opinions as to the need for future medical treatment “to limit or reduce impairment.” We now have some clarification of the evidence needed to establish liability for future medical care, and the burden or producing that evidence, in the recently published decision of Reeves v. Citizens Financial Services, ___ N.E.2d ___ (Ind. Ct. App. 2012).

Mr. Reeves suffered a back injury in a motor vehicle accident in 2003 while working for Citizens Financial. Over the course of several years following the accident, Mr. Reeves was examined and treated by a number of physicians for his pain complaints – physicians authorized by the work comp carrier, personal physicians, and a Board appointed IME. Based on the lengthy summary of Mr. Reeves medical treatment by the Court of Appeals, it is evident that the doctors who examined Mr. Reeves varied in their recommendations and findings. None of the physicians recommended surgery, and all non-surgical treatment recommendations were authorized and provided. To the extent ongoing future palliative care was mentioned, it varied by physician. Furthermore, none of the treatment that was recommended and provided, including versions of what was alleged to be ongoing palliative care, improved Mr. Reeves’ symptoms or lessened his subjective complaints of pain.

Based on this evidence, both the original Hearing Member and the Full Board ruled that Mr. Reeves had a right to his PPI rating as a result of his injury but nothing more. On appeal, the Court of Appeals agreed, stating “Reeves has failed to specify what treatment he believes he needs. . . . Unlike Grand Lodge, the evidence in this case is conflicting as to whether palliative care – be it medicine, physical therapy, or some other measure – reduces the extent of the impairment.” Holding that Mr. Reeves had the burden of proving his need for palliative care and that he failed to carry that burden, the Court affirmed the Board’s decision unanimously.

When an employee seeks medical treatment and compensation under the Indiana Workers Compensation Act, the employee must prove that he suffered “personal injury or death by accident arising out of and in the course of employment.” Ind. Code § 22-3-2-2(a). A recent case decided by the Indiana Court of Appeals highlights that employers may need to view the requirement that an injury arise of out employment more broadly than they have previously when deciding whether to accept a workplace injury as compensable. Waters v. Indiana State University, 2011 Ind. App. LEXIS 1434. In Waters, the Court of Appeals ruled against the employer and determined that the employee’s injury arose out of her employment, so the employer must provide medical treatment and compensation.

The employee, Betsy Waters, had worked for Indiana State University for almost eighteen years. Waters made draperies for residence hall rooms. Prior to her injury, Waters had several significant health issues, including obesity (360 pounds), diabetes, and knee problems requiring that she use a cane to walk.

Waters fractured her femur while attending an annual employee appreciation lunch. ISU held the lunch during the work day at a cafeteria on campus. ISU did not require employees to attend the lunch, but paid employees for the time during which they attended the lunch if they decided to attend. Waters sat at a booth during the lunch, although the cafeteria included other types of seating. She had difficulty exiting the booth at the end of the event. She had to rock and then twist to get out of the Booth. She felt a “pop” in her upper right leg as she twisted to leave the booth. Waters had fractured her right femur. The injury required surgery to repair the fracture with a plate and pin. Recurring infections and multiple surgeries followed the initial surgery. Waters did not return to work.

ISU denied Waters’ claim for workers compensation benefits on the ground that the injury did not arise out of her employment, but rather resulted from risks personal to Waters. The Single Hearing Member agreed with ISU’s arguments and found in favor of ISU. The Hearing Member concluded that the ISU work environment did not present an increased risk for the injury suffered by Waters. The full Workers Compensation Board agreed with the Hearing Member and affirmed the decision in favor of ISU.

On appeal, the Court of Appeals sided with Waters and reversed the finding in favor of ISU. The Court concluded that although Waters’ physical condition contributed to her injury and complicated her recovery from the injury, the injury itself arose from an activity (exiting the booth while at an employer provided luncheon) that was “incidental to, and therefore considered to arise out of the employment.” Waters, at *17. The booth, the Court noted, constituted a condition of the work environment that contributed to the injury. The Court based its decision on cases holding that risks arising from an employee’s pursuit of personal comfort or convenience, such as seeking fresh air, going to the bathroom, or cleaning up at the end of the work day are considered to arise out of employment. Although recognizing that employers do not have to compensate employees for injuries caused by an employee’s pre-existing conditions if the injuries are unrelated to employment, the Court stated that “where an employee’s pre-existing condition combines with a circumstance of his or her employment to result in an injury, the employee is entitled to recover for the full extent of the injury.” Waters, at *12

In reaching its decision, the Court acknowledged that an employee could suffer injuries while at work that would not arise out of the work. It cited the example of an employee who faints at work and suffers injuries from the fall as an example of injuries caused by purely personal risks. In contrast, the Court offered the example of an employee with pre-existing heart disease suffering a fatal heart attack at work brought on by the stress of a workplace fire as an example of a compensable injury arising out of work. . The Court sent the case back to the Workers Compensation Board for further determinations based on the Court’s opinion. ISU is asking the Indiana Supreme Court to review the Court of Appeals decision.

As the Waters case illustrates, an employer must undertake a thoughtful analysis of the facts surrounding the occurrence of a workplace injury before deciding to deny a claim. The employer should examine both the immediate factual circumstances of the injury and the existence of prior medical conditions of the employee. Employers cannot assume that an employee’s pre-existing health problems will provide a basis for denying a claim. If a connection exists between the injury and a condition or circumstance at work, then, under the Waters analysis, the employer may end up paying the claim even if the employee’s personal health conditions complicate treatment of the injury and greatly increase the length and cost of the treatment and recovery.

Karen Dutcher, an attorney in Ice Miller LLP’s Labor and Employment Section, concentrates her practice in defending employers in workers compensation matters.

While the exact fact pattern of R.M. v. Second Injury Fund 943 N.E.2d 811 (Ind.App. 2011) may be unusual, it nevertheless provides a valuable lesson on how a settlement decision could impact the integrity of the Second Injury Fund.

In November, 1999, Ronald Mayes was seriously injured, and permanently disabled, at work for Main Tech when his arms were pulled into a conveyor belt he was cleaning. He pursued claims against three non-employer defendants for damages, and negotiated confidential settlements with each of them. One of the terms of the settlement was that his employer, Main Tech Corporation, would continue to pay him all statutory workers’ compensation benefits as if no third party settlement had occurred. That “agreement” was reduced to writing and submitted to the Board for “approval” even though it did not compromise or reduce Mr. Mayes’ benefits in settlement of his claim.

Unfortunately, Main Tech’s insurance carrier, Reliance, went through bankruptcy before the employee had received 500 weeks of benefits. The Indiana Guaranty Fund provided benefits thereafter until those benefits exceeded their maximum liability of $100,000. Main Tech then stepped up and continued lost wage and medical benefits until it also went into bankruptcy in October 2004 after Mr. Mayes had received a total of 264 weeks of benefits from the date of injury. Mr. Mayes then petitioned for entry into the Second Injury Fund.

The original Hearing Member, the Workers’ Compensation Board and the Court of Appeals ruled that entry into the Second Injury Fund was prohibited because of the third party settlement that had occurred. However, the Indiana Supreme Court in the decision entitled Mayes v. Second Injury Fund, 999 N.E.2d 773 (2008) reversed that decision. The Court stated:

In the future, if the Board is concerned about double recovery, it should refuse approval of agreements involving confidential settlements or insist that the agreement contain a provision releasing the Second Injury Fund from liability.

Based on the ruling by the Supreme Court, Mr. Mayes requested payment of benefits dating back to the end of benefits received from Main Tech. The Second Injury Fund, however, took the position that Mr. Mayes could only gain access to additional benefits after expiration of the 500 weeks base period from the date of injury. Mr. Mayes objected and litigation ensued as to when his entry to the Second Injury Fund should occur.

In the recently published decision of R.M. v. Second Injury Fund, the Indiana Court of Appeals has now ruled that Mr. Mayes need not wait the 500 weeks normally required before gaining access to the benefits of the Second Injury Fund, despite rulings to the contrary by the Hearing Member and the Full Board. The Court reasoned:

While we acknowledge that under Indiana Code section 22-3-3-10, R.M. is entitled to receive worker’s compensation benefits for 236 more weeks, we conclude that R.M. has effectively received the maximum benefits possible and, thus has exhausted his right to receive worker’s compensation benefits. Having concluded that R.M. has effectively exhausted his right to receive worker’s compensation benefits, we believe that the legislature intended that an individual under these specific circumstances shall be considered to have exhausted their right to worker’s compensation benefits, thus making them eligible to recover additional benefits from the Second Injury Fund. Any other interpretation would result in the unjust and absurd result of R.M. being left without the assistance of the additional benefits to which he is entitled for a period of 236 weeks.

(emphasis added) There is no mention in this most recent decision of the unknown amount and impact of the third party settlement between Mr. Mayes and the three non-employer defendants.

These two appellate decisions on this one case have undoubtedly led the Board to more closely scrutinize all cases involving stipulations that the injured employee is permanently and totally disabled. Even though the Board is presented with only limited information at the time a compromise settlement is submitted for approval, the Board’s decision to approve a settlement could have significant monetary impact on its oversight of the state’s Second Injury Fund.

While the Board is now compelled to more carefully scrutinize settlements of this kind, employers and their carriers, who also share in the cost of benefits paid by the Second Injury Fund, should also be wary of negotiating settlements that potentially have far-reaching future financial implications for the Indiana Second Injury Fund.

The Second Injury Fund was created by the Indiana General Assembly primarily to encourage the employment of partially disabled workers. The intent is to relieve employers who hire disabled persons from some liability for workplace injuries that cause such persons to become permanently totally disabled. In situations where, prior to the employment, a worker has been totally deprived of the use of an eye, a hand, a foot, or an entire limb and she or he subsequently sustains a work-related injury rendering them permanently totally disabled, the employer is liable only for benefits related the workplace (second) injury.

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The following is a summary of bills pertaining to the Indiana Worker’s Compensation system that have been introduced in this session of the General Assembly. The most notable provisions of the legislation address provider fee claim issues and are included in this summary. Action by the originating body of the General Assembly must be completed by March 1, 2011 so that the opposite body may consider the legislation.

2011 Worker’s Compensation Legislation

Senate Bill No. 576

Requires that all members of the Worker’s Compensation Board (Board) be attorneys in good standing admitted to the practice of law in Indiana.
• Renames the position of executive secretary executive administrator.
• Requires a health care provider to file a claim for payment with the Board not later than one year after the last date the provider provided services to an injured or disabled employee.
• Requires the Board to establish a schedule of fees and charges for the resolution of health care provider claims.
• Allows the second injury fund to be used to pay certain fund liabilities.
• Authorizes the Board to resolve claims using mediation.
• Requires an employer to provide a copy of an injury report to the Board upon request.
• Requires an injury report within seven days after the first day of a disability arising from a work place injury (rather than the occurrence of the injury).
• Increase civil penalties for failure to: (1) post certain notices; (2) file certain records; and (3) determine liability for claims in a timely manner.
• Permits the Board to request evidence of worker’s compensation and occupational diseases compensation coverage from an employer.
• Establishes a civil penalty of $50 per employee per day for an employer’s failure to provide proof of coverage.
• Requires the Board to waive a civil penalty assessed whenever an employer provides proof of coverage by the twentieth day after the Board provides written notice of the employer’s failure to provide evidence of the coverage.
• Allows the Board, after notice and a hearing, to post on the Board’s web site the name of an employer who fails or refuses to provide proof of coverage or pay a civil penalty assessed for the failure or refusal to provide coverage.
• Provides that an employer’s name may not be removed from the Board’s web site until the employer provides proof of coverage and pays the civil penalties assessed.
• Requires that civil penalties be deposited in the worker’s compensation supplemental administrative fund, instead of the state general fund.
• Removes outdated references to infractions and criminal penalties. Makes confirming and technical corrections.

Senate Bill No. 574

• Requires a health care provider to file a claim for payment with the Worker’s Compensation Board (Board) not later than two years after the last date the provider provided services to an injured or disabled employee.
• Amends the definition of “pecuniary liability” applying to the responsibility of an employer or insurance carrier to recognize that the charge for services or products provided after June 30, 2011, by a medical services facility is equal to 200% of the amount determined using the Medicare program reimbursement methodologies, models, and values or weights, including the coding, billing, and reporting payment policies in effect on the date a service or product is provided.
• Increases benefit amounts for injuries and disablements occurring on and after July 1, 2011.

House Bill No. 1485

• Sets limitations on the pecuniary liability for a medical services facility for purposes of the worker’s compensation law.
• Prohibits a medical service facility from collecting payment for medical care.
• Requires the Worker’s Compensation Board to annually approve the most recent Medicare fee schedule, not later than December 31 each year, to determine the pecuniary liability of a medical services facility.
• Allows a medical services facility to request an explanation from a billing review service if the medical services facility’s bill has been reduced as a result of the application of a Medicare coding change.
• Requires an employer required to carry worker’s compensation insurance to pay an annual $2 filing fee.
• Makes a technical correction.
• Removes an outdated reference.

Senate Bill No. 164

• Provides than an employee who knowingly or intentionally makes a false statement of independent contractor status to the department of state revenue commits a Class D felony.
• Provides that an employer or employee shall not classify an employee as an independent contractor for the sole or primary purpose of avoiding the worker’s compensation law, and that a violation is a Class A infraction.
• Provides that a person who makes a false representation that an employee is an independent contractor for the purpose of avoiding the unemployment compensation law commits a Class C misdemeanor.
• Makes technical corrections.
• Makes confirming amendments.

Senate Bill No. 170

• Requires a local government unit that employs an individual as a police officer, county police officer, or sheriff who is disabled in the line of duty to offer to provide and pay for certain health coverage for the individual and the individual’s spouse, surviving spouse, and certain children.

Senate Bill No. 370

• Exempts worker’s compensation benefits received from other states from the claims of creditors. Increases the bankruptcy exemption for intangible personal property from $300 to $1,200.

In 2003, the Indiana Supreme Court ensconced the Positional Risk Doctrine in the hallmark case of Milledge v. The Oaks. In Millege, the claimant began her usual shift and parked her car in the nursing home parking lot. After closing the door upon exiting the car she twisted her ankle. She proceeded to her job and completed the majority of her shift but the pain in her ankle prevented the claimant from finishing her duties.

Leaving work early, Milledge went to the emergency room of a local hospital where x-rays revealed a sprained ankle. However, her ankle still bothered her a week after the injury. Among other things she suffered swelling in her right leg, and her right foot was severely discolored. In addition, a large blister had developed on her ankle, which her husband lanced on two occasions. Milledge returned to the hospital where she was treated with antibiotics. After surgical procedures failed to control the infection that had developed, Milledge’s right leg was amputated below the knee. Subsequently, she was fitted with prosthesis.

The Supreme Court explained that risks incidental to employment fall into three categories; (1) risks directly associated with employment, (2) risks personal to the claimant, and (3) risks neither distinctly employment nor distinctly personal in character.

It reasoned that risks in category one are those we intuitively think of as work-connected, risks in category two are those caused by pre-existing illness or condition, unrelated to employment, and risks in category three are neutral risks. While risks in categories one and three are generally compensable under the Worker’s Compensation Act, risks personal to the claimant are not. The Court ruled that if there is a neutral risk, one that is neither distinctly related to the employment nor distinctly personal, then there is a rebuttable presumption that the injury arises out of the employment. The burden then shifted to the employer to demonstrate that the injury was actually the result of a cause personal to the claimant.

The Supreme Court’s ruling in Millege was somewhat of a shock to the legal community because it was contrary to all other familiar concepts of tort law wherein the initial burden of proof lay with the party alleging the tort and/or claim.

I. Amendment of Indiana Worker’s Compensation Act

In response to the Supreme Court’s ruling in Milledge, the Indiana General Assembly amended Indiana Worker’s Compensation Act (“Act”) to eliminate the burden shifting mechanism of the Positional Risk Doctrine. Indiana Code § 22-3-2-2 was then amended by adding the following two sentences to the end of subsection (a):

The burden of proof is on the employee. The proof by the employee of an element of a claim does not create a presumption in favor of the employee with regard to another element of the claim.

This language appears to be an explicit abrogation of the Milledge case. Prior to the amendment, subsection (a) read as follows:

Every employer and every employee, except as stated in IC 22-3-2 through IC 22- 3-6, shall comply with the provisions of IC 22-3-2 through IC 22-3-6 respectively to pay and accept compensation for personal injury or death by accident arising out of and in the course of the employment, and shall be bound thereby.

Whereas the prior version did not specifically mete out the burden of proof to the employee, the amendment left no speculation of the employee’s burden in the establishment of the elements to affix entitlement to worker’s compensation benefits.

II. Decisions Interpreting the Amendment of the Act

A. Pavese v. Cleaning Solutions

The Court in Pavese was the first to interpret the amended language in the Act. Here, the claimant had been dust-mopping a floor in her place of employment and then put the dust-mop away. Empty-handed, she then walked back to retrieve a scrubbing machine. Approximately 10 to 15 minutes later, coworkers found her unconscious on the floor and called 911. The next thing the plaintiff remembered was waking-up in the ambulance. She did not remember the events leading up to the fall. However, she described the floor as concrete and slick because there was often oil and water on it. The plaintiff was taken to the emergency room and spent the night there. Her treating physician noted that she had fallen backwards causing a laceration on the back of her scalp and a concussion with retrograde amnesia. The treating physician ruled-out pre-existing conditions by noting she had no history of fainting, dizziness, or light-headed spells. Moreover, she had no history or evidence of seizures with a normal EKG in the emergency room. The plaintiff’s CT scan of the brain, except for the hematoma from the trauma, and her blood test was normal. The treating physician discharged Pavese with the diagnosis of syncopal episode, etiology uncertain with the impression that it was a sudden onset without warning that would suggest the possibility of cardiac rhythm disturbance.

The Indiana Worker’s Compensation Board ruled that the plaintiff did not meet her burden of proving that her injury arose out of her employment and that the accident occurred in the course of the employment. The Indiana Worker’s Compensation Board interpreted the newly-amended Indiana Code § 22-3-2-2(a) by requiring the claimant to prove causation thus discarding the Positional Risk Doctrine as previously mandated by Milledge.

The Appellate Court in Pavese upheld the Board’s interpretation of the statute. The Court noted that the Legislature had stepped-in to clarify that employees maintain the burden throughout the entire proceedings. This was the Legislature’s prerogative, as the right to worker’s compensation is a creature of statute. Because the plaintiff presented evidence that her fall could have been a syncopal episode or a slip-and-fall, she had not met her burden of proving the causal nexus between her injury and her employment.

B. PS2, LLC. v. Childers

The Childers case was somewhat tangential to the issue of positional risk. Here, a claimant sought worker’s compensation benefits following his work-related injury. The Worker’s Compensation Board determined that the plaintiff was entitled to precursor lap-band surgery to reduce his weight prior to a back fusion surgery for the work-related injury. The employer appealed the ruling of the Indiana Worker’s Compensation Board under various arguments. One argument presented by the employer was that the plaintiff alleged need for lap-band surgery is the result of a risk that was personal to him and therefore not the responsibility of the employer. The defendant directed the Childers Court to the ruling Pavese.

The Childers Court acknowledged that Pavese interpreted the amended Act to be an effective overruling of the Positional Risk Doctrine as established in Milledge. However, the Childers Court side-stepped the issue by pointing out that Board had made a factual finding that Childers had proven that his back injury arose out of and in the course of his employment. Its rationale was that the obesity was not a risk personal to the plaintiff because his weight had not been a disabling factor until the injury occurred. It opined that the Indiana Worker’s Compensation Board had made a factual finding, supported by the evidence of the record, and that the necessary medical treatment for his lower back injury included the precursor lap-band procedure. Accordingly, the Appellate Court did not have the authority to overturn the Board’s ruling when it was supported by the evidence.

While the Childers decision does not deal with a positional risk analysis, its dicta recognizes that Pavese interpreted the Indiana Code § 22-3-2-2 (a) as effectively overruling the Positional Risk Doctrine as adopted in Milledge.

C. Baker v. Heartland Food Corp. (I)

After Pavese and Childers, it appeared that the Positional Risk Doctrine had been effectively eliminated as the law as contemplated by the amendments to Indiana Code § 22-3-2-2 (a). However, this was about to change when the Appellate Court in Baker (I) rendered its first decision. In Baker, the plaintiff was an employee who experienced back pain while at her job on August 3, 2007. She was taken to a hospital by her mother and diagnosed with a herniated disc for which she had two surgeries. Baker initially denied that the herniated disc was work-related, but she subsequently filed an application for adjustment of claim alleging her injury was work-related.

The hearing Judge found that Baker initially stated she was bent over and not lifting anything, but subsequently, she testified that she was wrestling with a bun tray. She had also given various medical providers a variety of stories as to how the back pain began. At the hearing, Baker’s relevant medical records were submitted as evidence, but those records did not include a medical opinion regarding the etiology of her injury. Ultimately, the hearing Judge found that the plaintiff had not established her burden of proof that her injury arose in the course of her employment. This ruling was upheld by the Full Indiana Worker’s Compensation Board and the appeal ensued. On August 28, 2009, the Baker (I) Court issued an opinion reversing the Indiana Worker’s Compensation Board. The Court opined that since neither party had established the causal nexus for the plaintiff’s injury, the burden was upon Heartland to rebut the presumption in Baker’s favor. For this proposition, the Court cited Milledge and its progeny. Quixotically, the Court made no citation to the amended statute or Pavese and Childers.

Heartland timely petitioned for a rehearing citing the amended statute, Indiana Code § 22-3-2-2 (a), and the Pavese case. Baker responded to Heartland’s petition by arguing that the Legislature had intended to support the Positional Risk Doctrine as espoused in Milledge.

On October 16, 2009, the Court of Appeals issued a rare ruling wherein it withdrew its published decision of August 28, 2009. It declared that the August 28, 2009 decision was vacated, withdrawn and held for naught. As such, Heartland’s Petition for Rehearing was denied as moot.

D. Baker v. Heartland Food Corp. (II)

On November 4, 2009, the Appellate Court reissued its decision in Baker v. Heartland Food. It should be noted that the original decision was for publication and the subsequent decision was done by memorandum and not for publication. Pursuant to the Indiana Rules for Appellate Procedure 65 (B), the new decision should not be regarded as precedent and shall not be cited by any Court except by the parties to the case. Nevertheless, the Court of Appeals reaffirmed that the amendment to Indiana Code § 22-3-2-2 (a) overruled the Positional Risk Doctrine as established by Pavese. In doing so, it upheld the decision of the Indiana Worker’s Compensation Board against Baker. In addition, it ruled on two other issues that are worthy of note.

In Baker’s original appeal, she argued that her injury was an obvious one which did not need the opinion of an expert to establish a causal nexus. However, the Court of Appeals correctly pointed out that the plaintiff was requesting a reweighing of the evidence which it could not do.

Also, Baker originally asked that the subsequent deposition of a physician be allowed to be considered. After the hearing before hearing Judge, the plaintiff sought to remedy her failure to establish a causal nexus by conducting the deposition of the surgeon who had performed her surgeries. In that subsequent deposition, the surgeon indicated that it was his opinion the plaintiff injured herself while executing her duties for Heartland. Baker then moved to introduce the deposition of the surgeon in her appeal to the Full Indiana Worker’s Compensation Board.

At the hearing before the Full Indiana Worker’s Compensation Board, the Board refused to accept the deposition of the surgeon as additional evidence. The Court of Appeals averred that Baker had waved the issue because she did not make an offer to prove the deposition during the hearing before the Full Board. Further, Baker did not demonstrate that the Board clearly abused it discretion when it denied her petition to introduce new evidence. Baker’s explanation for her failure to obtain the deposition in a more timely manner was unpersuasive.

Because of the importance of these legal issues to the worker’s compensation practice, Heartland requested that Baker (II) be published as well. This request was denied by the Court of Appeals. However, one can review the decision and determine how the Court may lean when ruling on these issues in the future. Because no Petition for Rehearing or Transfer has been timely filed, one can assume that this is the final ruling regarding the Baker litigation.

E. Edwards v. Domino’s Pizza

A more recent decision has cemented the onus required plaintiffs under Indiana Code § 22-3-2-2 (a). In Edwards, a manager of a Domino’s Pizza closed the store, ran a close-out report, and departed in his own vehicle. After closing, he gave an employee a ride home and during that trip, Edwards’ vehicle was rear-ended by a drunk driver and both were killed in the accident. Edwards’ widow then filed an application for an adjustment of claim seeking death benefits under the Act. While this case was not specifically dealing with a neutral risk, it does point out the analysis that courts will use in the future. Here, the Indiana Worker’s Compensation Board found that the plaintiff could not establish that Edwards’ accident arose out of his employment. The Edwards Court cited Pavese in dicta noting that an accident occurs in the course of employment when it takes place of a period of employment, at a place where the employee may reasonably be, and while the employee is fulfilling the duties employment or while engaged in doing something incidental thereto. Both the requirements must be met before compensation is awarded, and neither alone is sufficient. The person who seeks worker’s compensation benefits bears the burden of proving both elements.

As in Baker (II), the Edwards decision was an unpublished memorandum decision. Accordingly, the Indiana Rules of Appellate Procedure 65(D) states that the decision should not be regarded as precedent or cited before any Court except for the purposes of establishing a defense of res judicata, collateral estoppel, or the law of the case. Nevertheless, we can see the Court’s tendencies in both Baker (II) and Edwards with regards to the onus of plaintiffs involving a neutral risk or another uncorroborated element. Simply put, the Courts have determined that the amendment to Indiana Code § 22-3-2-2 (a) will no longer require that an employer prove a negative in defending a claim with a neutral risk i.e. that the risk was not incidental to the employment.

III. Conclusion

By tracing the survey of case law presented here, the genesis of the Positional Risk Doctrine can be traced through the Indiana Supreme Court’s ruling in Milledge and legislature’s response in amending Indiana Code § 22-3-2-2 (a). Perhaps, legislature reacted because of the uncertainty created by the Positional Risk Doctrine. It appeared in the practice of workman’s compensation law that claimants gain an advantage if they did not know, could not recall, or could not explain how their injuries occurred. In those instances, if the cause of their accident were unexplained, then the burden would shift to the employer to prove that the cause of the accident was an idiopathic condition of the plaintiff. Because this often times can be impossible to prove, a plaintiff could prevail without having to prove causation. This rendered the Act inharmonious with the entirety of tort law, specifically regarding the allocation of burden in the establishment a claim.

With the amendment of Indiana Code § 22-3-2-2 (a), legislature sought to codify and clarify that the burden on every element of the claim is to remain with the plaintiff. This approach seems far more equitable when we consider the affirmative defenses that an employer may assert under Indiana Code § 22-3-2-8. In those instances, the burden of proof then shifts to the employer after an employee has met the initial burden of proving a valid claim. Consequently, each party bears the burden of proof with regards to its own assertion. A plaintiff has a burden to prove all elements of his or her claim and the defendant has the burden to prove each every element of its affirmative defense. This outcome is far more in tune with traditional assumptions of tort law.

Placing the burden upon a plaintiff to prove each and every element of his or her claim is not particularly onerous, when the Worker’s Compensation Act provides that this burden can be met with a written report by a physician. For instance, in the Baker case, the plaintiff could have easily prevailed had she submitted a report that met the criteria of the Act. In doing so, the Indiana Worker’s Compensation Board would then have had some evidence upon which to find that the plaintiff met her burden.

Now that it is clear that a plaintiff has a burden of proof with regards to each and every element of the claim, both employers and employees can evaluate claims with more certitude. Employees will know what medical evidence they must garner to prevail, and employers can determine their exposure if such evidence is presented to them.

This article first appeared in 7(1) Indiana Civil Litigation Review 19 (2010). The Review is a publication of Defense Trial Counsel of Indiana. Reprinted with permission of the Defense Trial Counsel of Indiana.
Christopher Cross is an Associate at Skiles Detrude and is a member of the Defense Trial Counsel of Indiana.

Not everyone notices when the Indiana Workers’ Compensation Act is amended, and such amendments can be extremely important in defending or prosecuting a claim. Hayes Lemmerz Intl. Inc., v. ACE American Ins. Co. (2010 WL 3398152) is an example of the cost of missing the actual language of the statute.

In 2005 a worker for a subsidiary of Hayes Lemmerz was injured in an explosion at a plant in Huntington and another worker was killed. Litigation was filed against the parent corporation, Hayes Lemmerz International, in civil court. No reference was made in the suit that the workers were employees of a subsidiary corporation, and neither party evidently felt that fact was relevant. ACE American Ins. Co. was notified of the suit as they had insurance coverage for the parent corporation, and it agreed to share the cost of the defense but did not assume control of the defense. The trial court initially ruled that Hayes Lemmerz International was not the plaintiffs’ employer, but it was never provided with the pertinent language from the Workers’ Compensation Act in making that ruling.

Because of an amendment to Indiana Code §22-3-6-1(a) in 2001, the employer of a worker is defined as both the subsidiary for whom he works and the subsidiary’s parent corporation. This change occurred in response to the prior case of McQuade v. Draw Tite, Inc., 659 N.E.2d 1016 (Ind.1995) in which the Indiana Supreme Court held that a parent corporation could not avoid civil liability if its corporate structure separated it from the subsidiary company that actually employed the worker. The McQuade court reasoned that the corporation could not enjoy the legal protection afforded by its structure and ignore the division between the entities concerning workers’ compensation matters (essentially declining to pierce the corporate veil to protect the party who erected it.)

The most noteworthy example of how the McQuade holding was applied, before the statute was amended, is the 2001 case of Ritter and Kroger Co. v. Stanton, 745 N.E.2d 828 (Ind.App. 2001). In that case, a truck driver brought a personal injury claim against Kroger for an accident that occurred on Kroger property while he was working for a wholly-owned subsidiary. The jury verdict of $55 million against Kroger was affirmed on appeal, and Kroger was not allowed to raise the bar against civil liability that protects employers even though the employer was a wholly owned subsidiary of Kroger.

Amending the statute in 2001 only solved the problem, however, if attorneys know of the amendment and bring it to the attention of the Court. In the recent case of Hayes Lemmerz v. ACE, counsel for Hayes Lemmerz failed to assert the fact that the parent corporation now shares the same protection against civil liability that the subsidiary (direct employer) has under the Act, and it litigated the issue for two years, at a cost of $267,000, attempting to prove to the trial court that the parent corporation was actually the employer. As noted by the Appellate Court, this “issue” was covered by the 2001 amendment to the Act, but the attorneys failed to cite the relevant language of the Act during the course of the litigation. When Hayes Lemmerz sought reimbursement by ACE for the costs of the litigation on this issue, the 7th Circuit Court of Appeals had no problem in denying reimbursement for those fees on the basis they were not reasonable expenses of litigation. The assertion by Hayes Lemmerz that ACE should have “taken over” the defense of the claim and, thereby, avoided the “mistake” their counsel had made, did not prove persuasive to the Court.