Your Witness Statements May Not Be Protected

In anticipation of litigation, or during the delay and denial period, the defense on a Workers’ Compensation case may obtain witness statements from the employer. Attorneys for the defense have typically maintained these statements are privileged as attorney work product or under the attorney-client privilege. A new appellate court case has indicated that those privileges may not apply to the statements.

The facts in the Martin case are convoluted as to how the case got to the appellate level and will not be discussed here. The major contention was that the applicant had filed a stress workers’ compensation claim against his employer. The employer denied the claim based on a doctor’s report and an investigation performed by an investigative service for the claims administrator on behalf of the employer. The applicant sought discovery of those statements. The appellate court decided the issues under the privilege of attorney -client privilege as opposed to attorney work product.

The court relied on D.J. Chadbourne, Inc v. Superior Court in making its determination in this case. The court applied the principles enunciated in Chadbourne to the workers’ compensation setting. This court referred to 11 basic principles in Chadbourne for its decision. In order to now assert the attorney-client privilege in a workers’ compensation case as to witness statements you have to review these principles very carefully.

“As can be seen from a reading of Chadbourne, there are many factors to be considered in determination of whether a particular employee statement is privileged….Not all employee statements are protected by the attorney-client privilege….Mere witness statements from corporate employees, however, are not privileged.”

The case went on to define whether the witness was making an independent or making a statement that is required “in the ordinary course of the corporation’s business”, which is the way it can be protected.

“We conclude that when an employee’s only connection is an independent witness, not as a co-defendant or as the natural person to speak for the employer, such statements do not become privileged just because they are given for transmittal to the employer’s attorney in preparation for litigation. When an employee is no more than a witness to an accident, his or her statement is not privileged even if it was taken in preparation for litigation as an employer should not be allowed to silence witnesses…” “(E)ven in a stress claim, the facts known to the employee are not privileged”.

The safest course of action in the future for a defendant is to have your attorney interview the witnesses and make no written reports.

When Does The Date Of A Cumulative Trauma Begin?

A new case not published in the official reports has solidified the opinion previously held in Western Growers Ins. Co. V. WCAB.

The applicant had neck and shoulder pain beginning in June of 1992 and was given pain pills by her manager.  She continued to have problems until she informed her employer of the industrial nature of her problem in June of 1994. A chiropractor placed her on light duty by letter dated June 15, 1994, and the employer actually placed her on light duty no later than June 18,1997. The applicant continued to work until August 19, 1994 when she was terminated.

The applicant thereafter, filed a cumulative trauma alleging injury from March of 1992 through her last date of employment of August 19, 1994. The workers’ compensation judge found injury for the entire period o f employment but divided liability between two carriers based on the last year of employment: An appeal was made on the basis of Labor Code section 5500.5 (a) and Labor Code section 5412. which defines the date of injury.

“In finding which employer, or period of employment, and carrier is liable for a cumulative injury, it must be determined pursuant to section 5500.5, subdivision (a) whether the date of injury according to section 5412 or the last date of exposure occurred first…  The date of injury for cumulative injuries according to section 5412 is when an employee first suffers disability and knew, or in the exercise of reasonable diligence should have known, it was caused by employment.

This court stated that a finding of temporary or permanent disability is sufficient for a finding of disability under section 5412. The court implied that if the applicant was off work for more than 3 consecutive days, this would be sufficient to establish a date of disability under 5412. Thus, the ending of the cumulative trauma under 5500.5 could be significantly before the ending date of employment

The court went on to say you do not even need wage loss to establish disability under section 5412. In this case, placing the applicant on “light duty” was sufficient to establish disability under section 5412. The court goes on to state that medical treatment alone is enough to establish disability under section 5412.  However, they clarify that giving pain medication alone is not sufficient to qualify. The medical treatment must be significant. What is significant medical treatment will be decided in the future on a case by case basis.

The lesson to be learned from this case is the ending of the cumulative trauma is not as easy as believing what is pled on the application or claim form.

Can You Settle Vocational Rehabilitation Temporary Disability Retroactively?

The Second Appellate District has issued a “draft” opinion in regard to settling retroactively vocational rehabilitation temporary disability (vrtd). It is not a final opinion yet, but will have significant impact, if decided as currently written.

The applicant made an initial demand for rehabilitation on his application in 1989. A compromise and release was entered into in 1992.  The agreement included language, “This agreement settles any and all claims for T.D. and V.R.T.D. to date.” They stipulated that the applicant was not QIW at the present time and if the applicant wanted rehabilitation at a future date no benefits would be paid until the applicant was seen by an AME. The judge signed an order approving the C&R containing the aforementioned language.

The applicant filed for rehabilitation.  One issue became whether the applicant could receive retroactive VRTD. This Court intends to hold that you cannot settle accrued vocational rehabilitation benefits where no basis exists for the application of the good faith exception cited in Labor Code section 5100.6. Under that section the commutation or settlement of vrtd is prohibited. Therefore, you need a Thomas type of good faith exemption to settle retroactive vrtd in the non-Thomas case.

The Court goes on to state that the language in a C&R specifically requires a judge to expressly approve applicant’s release of any rehabilitation benefits. Therefore, the judge must put in the Order Approving that the applicant is settling retroactive vocational rehabilitation. Theoretically, there must be an offer of proof to support that. The Court also is intent on finding that the starting date for instituting benefits would be the date of the original application. The decision will thus establish that normal language in the C&R will not be sufficient to settle accrued vrtd. It is common practice when preparing a Compromise and Release for a Thomas case to prepare an Order for the Judge indicating that you are requesting a Thomas finding. It is not clear at this point how specific one will have to be based on this decision in settling retroactive vrtd. It may be that you can simply cite Estrada v.  WCAB. However, caution would indicate if this decision holds up that you also include specific language as you do in a Thomas situation.

Commercial Traveler Is Not A Strict Liability Rule

The Court of Appeal has taken a new look at the rules governing commercial travelers and come up with an interesting decision.

The decedent was a supervising gardener. He attended an out of town seminar on behalf of his employer.  He suffered a heart attack and died while on the trip from a staph infection. The widow alleged stress at trial resulted in the decedent’s death.  The voluminous medical records introduced by defendant showed the decedent’s problems with high blood pressure and cardiovascular disease preceded his employment with the defendant. The Workers’ Compensation Judge (WCJ) found the decedent to be a commercial traveler, but insufficient evidence of stress caused at the workplace. The Workers’ Compensation Appeals Board agreed.

The Court of Appeal reviewed Labor Code section 3600 and stated that all injuries must be found to be AOE-COE. “Moreover, proximate cause must exist in that the employment must be a substantial contributing cause of the injury.” The court then reviewed the commercial traveler cases. The Court relied on Dalgleish v. Holt for the proposition that if the decedent was equally exposed to the hazard apart from the employment then the death would not be compensable. The Court did agree that the decedent was within the course of his employment and therefore, a commercial traveler.  However, there must be a causal connection between the injury and the employment. The commercial traveler cases do not make a traveler rule into a strict liability rule that says merely because you are on a trip for your employer, you are covered under Workers’ Compensation.

The Court stated that the “decedent’s heart condition and subsequent medical treatment are conditions to which he would have been equally exposed outside of the employment” The Court also indicated that the decedent did not suffer sufficient work-related stress to establish his heart condition and subsequent death arose out of the employment.

Therefore, there is no strict liability theory that just because one is on a business trip that an injury during that trip will be found compensable. The issue then becomes proving arising out of employment. A good defense will try to show there is no proximate cause between the travel and the injury. The defendant will try to prove that the applicant was merely exposed to a hazard mat the worker would equally be exposed to irrespective of the employment.

Judge May Order Additional Medical Evidence If Needed

It has been common belief in the workers’ compensation community that under the 1989 reform legislation the judge may not send the applicant for additional medical evaluation if the existing record is not substantial evidence. A new appellate case has indicated that proposition is incorrect.

In this case the applicant filed a claim for psychiatric injury due to stress at work. The employer referred the applicant for medical evaluation. The employer’s psychiatrist found the applicant’s condition nonindustrial.  The original applicant’s attorney referred the applicant to a neurologist, who found the condition industrial. Due to the conflict, the original applicant’s attorney and the defense agreed to an AME in psychiatry. The AME did not find the condition industrially caused. The case proceeded to trial.

The Judge (WCJ) concluded that it was nonindustrial only because the medical evidence did not support a finding of industrial causation. It was the WCJ’s opinion that there was stress in the work place which caused the applicant’s disability. However, the WCJ had no medical evidence to rely on and believed under the reform legislation he could not send the applicant out for additional medical evidence.

The Court analyzed Labor Code sections 5701 and 5906. 5701 allows the appeals board to send the applicant to a physician. 5906 allows the appeals board to take additional evidence. The Court then analyzed two cases. They analyzed a post-reform case that indicated that the Board may further develop the record in a given case. The Court then relied on a pre-reform case cited in this post-reform case for the proposition that the Board could obtain additional medical evidence.

The Court indicated that the WCJ was correct in his opinion when he indicated that he could not appoint an independent medical examiner.  However, they ruled he could obtain further evidence. “Sections 5701 and 5906 were not affected by the reform legislation and they remain available for use in the original proceeding or upon reconsideration. (See Kennedy v. Fremont Comp. Ins. Co. (1993) Cal. Workers’ Comp. Rptr. 78 (which concluded that even if a WCJ could not refer an applicant for an IME, the medical record could, and should, be developed by other means such as supplemental medical reports…”.

Now that workers’ compensation has the presumption of the treating physician this case may help the party that does not like the opinion of the treating physician. The treating physician’s opinion may be attacked as not being substantial evidence and the objecting party can make a motion for the judge to send the applicant for additional medical evaluation. This will be the same procedure as in pre 1989 reform when a motion was made at the end of trial for the WCJ to appoint an IME.

No Presumption On Failure To Deny Psyche Case

A recent appellate decision has indicated that even though the carrier failed to deny a psychiatric case within the 90 days as required by Labor Code section 5402, the case can still be found noncompensable.

The applicant filed a claim against her employer for psychiatric injury one and one-half months after she was employed as a vocational nurse. The employer arranged for treatment and paid indemnity within the 90 day period set forth in section 5402. Over a year later the issue of Labor Code section 3208.3 (d) was alleged. This section indicates that for a psychiatric injury to be compensable the injured employee must be employed for more than 6 months, unless the injury is caused by a sudden and extraordinary employment incident.

The applicant contended at trial that section 5402 precluded defendants from raising 3208.3. The workers’ compensation judge (WCJ) reasoned that 3208.3 (d) was an exception to 5402 because the first phrase of 3208.3 states: “Notwithstanding any other provision of this division…”. On Petition For Reconsideration the Appeals Board agreed with the WCJ that 3208.3 (d) was an exception to 5402.

The Court of Appeals looked at SCIF V. WCAB (WELCHER) which we discussed in a previous newsletter.  However, that case involved medicals that could have been obtained within 90 days. Therefore, in that case the presumption of 5402 was upheld. This court specifically stated that “Welcher did not involve the narrow exception created by section 3208.3, subdivision (d). This court did intimate that the applicant could still try to prove her case under the sudden and extraordinary employment condition.  This case is significant in that it pokes another hole in the 5402 presumption.  As you may recall from a previous newsletter there is the additional case of Rodriguez v. WCAB which gave an exception to the 5402 presumption. In that case one would have to show mat, the case was rejected within the 90 days. This may be a difficult task that would ultimately include testimony as to the fact mat the claim was rejected within 90 days, even though no formal denial was sent to the applicant.

However, the lesson to be learned is that even though a denial may not have been sent out timely there may be other arguments that the defendant can raise in a given case, depending upon the facts, to defeat the imposition of the presumption of 5402. The proper thing to do if the 90 day period has run and you feel that you need to deny the case is see if mere is anyway to do so under the given facts of your case if you are the defendant.

Multiple Penalties For A Single Act Disallowed

In a previous newsletter we discussed the Court of Appeals decision in Christian v. WCAB. The court had allowed multiple penalties for each missed payment of temporary disability. The Supreme Court has overruled that decision.

The carrier stopped paying temporary disability on the basis of two inadmissible reports. The applicant asked for multiple penalties for each successive missed payment of TD.  The workers’ compensation judge (WCJ) awarded 11 successive penalties for the missed TD payments. The Workers’ Compensation Appeals Board on Petition for Reconsideration reversed the WCJ and found only one penalty.  The Court of Appeal Reversed the Board and found 11 successive penalties.

The Supreme Court reviewed all of the major penalty cases in determining that this case involved only one unreasonable act in cutting off TD, which justified only the imposition of one penalty.

“While we have held that multiple penalties must be applied in some circumstances, those penalties have been approved only when the refusal of, or delay in payment of benefits, necessarily involved separate and distinct acts by the insurance carrier.  Those multiple penalties involved separate classes of benefits….” In Christian it was not a separate class of benefits, but only related to the same class of benefits, TD.

The Court reasoned as follows: “…Until the Board has made an award or another legally significant event occurs which unequivocally establishes the employer’s liability, the employer or carrier may act under a good faith belief that its conduct is justified.  Notice to the employer or carrier from the worker of intent to seek penalties and the employer’s or insurance carrier’s opportunity to reconsider its decision does not create a separate and distinct act for which imposition of penalties is authorized by section 5814 simply because the employer or carrier does not resume benefits on receipt of such notice. If a carrier or employer believes that its conduct is justified, imposing penalties on the theory that each notice gives the insurance carrier the occasion to reconsider the decision to terminate or change the amount of benefits payments would not fairly serve the deterrent purpose of section 5814.  Instead, employers or carriers would be compelled, under the coercive force of those penalties to continue payments to which they believe a worker is not entitled simply because multiple penalties might be assessed if the worker was able to give repeated notice of intent to seek penalties for conduct based on the same decision.”

The case only stands for the proposition that multiple penalties will not be awarded for the same act.  However multiple penalties can still be awarded for separate and distinct acts.

Failure To Divulge History Will Not Defeat A Claim

In a very surprising unpublished opinion a court of appeals has ruled that an applicant does not have to divulge her full medical history to the defense evaluating doctor.

The applicant filed a psychiatric stress claim against her employer. The employer first referred her to a doctor who indicated she had prior family problems and troubles with her ex-husband and concluded the claim was nonindustrial.  She was also sent to a doctor by the compensation earner. This doctor noted a history of prior depression. This doctor found the claim noncompensable as a good faith personnel action under Labor Code section 3208.3.

The applicant was then evaluated by her own psychiatrist who reviewed records from Kaiser noting she had treatment with Prozac for family problems.  Her own doctor put in his report “I am concerned the patient failed to disclose…” to the defense doctor her prior treatment.  Her doctor still found the psychiatric injury compensable.

The referee at trial denied her claim, even though he found her credible, for her nondisclosure to defense doctors. The referee indicated that the higher threshold of 3208.3 required the applicant to reveal all relevant and substantial history. The referee conceded this was a nonculpable omission on the applicant’s part.

Amazingly, the appeals court stated “Contrary to the belief of the Board’s referee, there is nothing in section 3208.3 which requires a claimant to disclose her medical history to an evaluator, let alone a defense evaluator, as a prerequisite to consideration of her evidence of injury.” …  “The Board’s own regulation governing the contents of physicians’ reports, which require the inclusion of a patient’s medical history, states a failure to comply “will not make the report inadmissible but will be considered in weighing such evidence.”

The court indicated that any shortcomings in the defense report were the fault of the defendant for failing to secure the Kaiser records and prepare a proper defense. The court indicated in its opinion that the referee used mere conjecture in his opinion that the claimant never reiterated her medical history to the defense evaluator.  The court indicated the report did indicate that the defense doctor did ask her about prior treatment. The court opined that just because the defense doctor did not comment on that treatment could be easily attributed to a belief on the doctor’s part that it was not material.

The lesson to be learned is that defending a claim requires all prior records should be obtained and sent to the evaluating physician. If applicant’s physician is commenting upon records you do not have, you should obtain them. All records and a deposition, if appropriate, should be sent to your doctor.

Do You Know When You File A Petition For Contribution?

A recent appellate decision has indicated that a reimbursement petition is untimely if filed more than one year after the original award for benefits.

The applicant filed a claim against three employers. Labor Code section 5500.5 was raised as a defense. The applicant elected to proceed against one employer’s carrier. The WCJ, after trial, issued an opinion that all three employers were responsible for the cumulative trauma on November 17, 1987. The Judge awarded temporary disability and medical care, but deferred permanent disability and apportionment findings. The judge found all defendants jointly and severable liable.

The elected against defendant was designated as me defendant primarily liable and responsible to furnish the benefits awarded.  The elected defendant eventually settled by compromise and release in March of 1994. Prior to the filing of the C&R the elected defendant never filed a Petition For Contribution. The elected defendant reserved their right to seek contribution from the codefendant in the cumulative trauma period in the C&R. The elected defendant then filed the petition for contribution in November 1994. This was within one year of the C&R, but not within one year of the original award for temporary disability.

The question was whether section 5500.5 (e) permitted the elected defendant to seek contribution for the temporary disability that they paid prior to the C&R. The court indicated that the rights of the elected defendants are deferred to the contribution proceeding.  Since the original defendants are not fully represented at the original proceedings, the WCJ’s joint and several award is not res judicata (final).  This issue may be relitigated in the contribution proceedings. The one-year time limitation for the filing of the petition for contribution is measured from the judge’s award. Thus, the petition for contribution on the original award of T.D. had to be filed by 1988. The court indicated the one-year is not tolled by the filing of a petition for reconsideration. However, when a supplemental award is issued for a new and distinct class of benefits, which were not awarded in the original, a petition for contribution is timely if filed within one year of that award.  Thus, the petition is timely in this case as to permanent disability and vocational rehabilitation benefits paid pursuant to the C&R because they were not awarded in the original findings of fact and award. The WCJ can allow no contribution to those benefits awarded in the findings of fact and award of 1987.

The lesson to be learned is always file a petition for contribution within one year of the award of any distinct class of benefits.

It Is Possible To Win A Statute Of Limitations Case

A recent appellate court decision evaluated the difference in applying the statute of limitations for a specific injury versus a continuous trauma.  The standard to be applied is easier for the specific injury.

The applicant worked for the Cucamonga Unified School District when she felt a specific shock to her back in March 1992. She did not report the injury because she thought it was a “one time thing”. Thereafter, she went to a doctor and received a cortisone shot to her back. She only missed one day of work attributable to her injury the rest of the school year.  A doctor did not inform her that the back injury was work-related until the summer of 1993. Applicant filed a claim November 1993 alleging a specific injury in March 1992. At trial applicant testified that the injury was really a continuous trauma.

Labor Code section 5405(a) deals with the statute of limitations for specific injuries. The Court determined that she suffered an “injury” because “she immediately experienced impairment of function which affected her ability to perform certain activities, including those required for her work”.

The WCJ viewed the case as a cumulative trauma and applied Labor Code section 5412. “For the purposes of such cases, the ‘date of injury’ is ‘the date upon which the employee first suffered disability therefrom and either knew, or in the exercise of reasonable diligence should have known, that such disability was caused by his present or prior employment. “’

The Court then analyzed the statute of limitations cases and differentiated them from the present case. The court evaluated those cases that indicated a lay persons opinion of injury was not sufficient to trigger the statute of limitations and medical opinion was needed. This Court gives us the following rule.

“Certainly in many cases the timing of a medical report or doctor’s opinion that a condition is industrially related will be of considerable significance in the determination of when an employee acquired knowledge of causation. This would generally be true, for example, in latent disease cases or cases involving illness from toxic exposure; we are even prepared to recognize that the source of some heart and stress problems may not be correctly identified by the lay employee. But where an employee suffers a sudden pain while performing a physically stressful activity, no expert confirmation is necessary.”

Thus, it would appear clear from this decision that if the applicant has a specific orthopedic injury he/she will have one year to file a claim. This information is best attained to apply this defense through proper discovery. A history of when the injury was first reported as well as deposition testimony will be crucial in establishing the defense.

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