KANSAS WORKERS’ COMPENSATION

Legislative and Case Law Update

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KANSAS WORKERS’ COMPENSATION ACT LEGISLATIVE CHANGES

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KANSAS UPDATES

Senate Bill 187 was signed into law by Governor Sam Brownback on April 16, 2013, and published in the Kansas Register on April 25, 2013

The AMA Guides 6th Edition will apply to injuries occurring on or after January 1, 2015. 

Senate Bill 167 would have reverted Kansas Law to the 4th Edition of the AMA

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6TH EDITION CHANGES

How changes in compensation law could affect some common work-related injury awards:

• Back injury requiring spinal fusion: old law: 20% - 30% BAW; new law: 5% - 14% BAW

• Torn shoulder rotator cuff, second injury: old law, 10% - 20% impairment to the shoulder; new law: 0% impairment

• Carpal tunnel injury, both hands: old law: 10% - 30% UE impairment; new law: 2% - 5% UE impairment

http://www.kansas.com/news/local/crime/article14416841.html

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CONSTITUTIONAL CHALLENGE?

• Kansas Constitution provides, “All persons, for injuries suffered in person, reputation or

property, shall have remedy by due course of law, and justice administered without delay.” Kan. Const. B. of R. § 18.

• Kansas Courts have held, “If a remedy protected by due process is abrogated or

restricted by the legislature, the change is constitutional only if (1) the change is reasonably necessary in the public interest to promote the general welfare of the people of the state, and (2) the legislature provides an adequate substitute remedy to replace the remedy that has been restricted.”

• Constitutional Concern: Does the Kansas Workers’ Compensation Act still constitute an

“adequate substitute remedy” to replace the civil cause of action which has been restricted?

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CONSTITUTIONAL CHALLENGE? Injured Workers of Kansas v. Franklin, 262 Kan. 840,

886, 942 P.2d 591, 622 (1997).• In 1997, the Kansas Supreme Court issued a lengthy

opinion discussing whether the Kansas Workers’ Compensation Act still constituted an adequate substitute remedy following the 1993 amendments to the Act.

• The Court cautioned, • “We recognize that there is a limit which the legislature

may not exceed in altering the statutory remedy previously provided when a common-law remedy was statutorily abolished. The legislature, once having established a substitute remedy, cannot constitutionally proceed to emasculate the remedy, by amendments, to a point where it is no longer a viable and sufficient substitute remedy.”

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CONSTITUTIONAL CHALLENGE? Padgett v. State of Florida No. 11-13661 (Fla. Cir. Ct. Aug. 2014)• A recent court decision in Florida held that the exclusive remedy provision of

the Florida Workers’ Compensation Act was unconstitutional as the Workers’ Compensation Act no longer provided a reasonable alternative remedy to the tort remedy it supplanted

• The Court specifically pointed to 2003 amendments to the Workers’ Compensation Act which limited the amount of medical and disability benefits an injured worker could receive under the Act.

• This case has been appealed and is awaiting decision by the Florida high courts.

Darrell Duck v. Morgan Tire & Auto, No. CJ-2014-175 (Okla. Dis. Ct. Jan. 2015)

• Recent amendment to the Oklahoma Act which required that an accident be “unforeseeable” in order for it to be compensable left employees without a remedy for workplace injuries which occurred as a result of a “foreseeable” accident.

• As a result, the Court opened Employers up to tort liability for workplace injuries stemming from a foreseeable accident.

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KANSAS SUPREME COURT DECISIONS

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Does the going and coming rule preclude compensation where the claimant is injured in a car accident while traveling from a remote oil-drilling location to his home after the completion of his shift?

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WILLIAMS V. PETROMARK DRILLING, LLC No, according to the Supreme Court in Williams v. Petromark Drilling,

LLC. The claimant in Williams was injured while riding as a passenger in a coworker’s car after completing his work shift at an oil-drilling site. At the time of the car accident, the claimant was not being paid or performing a task for his employer. Furthermore, the claimant had voluntarily chosen to ride home with his coworker rather than with his supervisor for his personal convenience. Accordingly, the Administrative Law Judge found that the claimant’s accident did not arise out of or in the course of his employment.

The Appeals Board reversed the ALJ’s Award finding that, because the nature of the claimant’s work necessitated travel to ever-changing locations, the integral travel exception to the going and coming rule applied. The Court of Appeals subsequently reversed the Board’s decision due primarily to the fact that the claimant was not doing anything to further his employer’s interests at the time of his accident.

The Supreme Court recently issued a decision reversing the Court of Appeals’ opinion. The Court noted that the issue of whether an employee’s accident arose out of and in the course of employment is a question of fact. The Court then determined that the established facts can reasonably support multiple different conclusions, including the conclusion reached by the Appeals Board. Accordingly, the Supreme Court concluded that the Board’s finding that the claimant’s accident arose out of and in the course of his employment because travel was intrinsic in his work duties was supported by substantial competent evidence.

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KANSAS COURT OF APPEALS DECISIONS

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What standard of review applies when an appellate court reviews the decision of an administrative law judge and the Workers Compensation Board to exclude the testimony and report of an independent medical examiner as a sanction for counsel’s violation of a no-contact order?

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BASE V. RAYTHEON AIRCRAFT CO In Base v. Raytheon Aircraft Co., the Court of

Appeals held the proper standard of review is whether the agency action is unreasonable, arbitrary, or capricious under K.S.A. 2013 Supp. 77-621(c)(8).

In Base, the ALJ and Board excluded the report and deposition testimony of two independent medical examiners as a sanction for claimant’s counsel’s violation of a no-contact order with a court-appointed neutral physician. Claimant’s counsel was clearly in violation on two separate occasions, and the sanctions to exclude the testimony had the purpose of restoring both parties to their previous positions prior to Base’s counsel’s violations.

 

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BASE V. RAYTHEON AIRCRAFT CO Base attempted to argue for broader review under

K.S.A. 2013 Supp. 77-621(c)(5), contending that the Board failed to allow him to present evidence, and failed to act reasonably without partiality. The Court of Appeals agreed with Raytheon’s characterization of the proper standard of review, however. The Court of Appeals noted that the ALJ’s decision to exclude the evidence at issue was not based on a determination of its admissibility, but rather, the ALJ sanctioned Base’s attorney for his violation of the ALJ’s previous no-contact orders.

Based on the stricter standard of review, the Court of Appeals held that the ALJ and Board did not err in excluding the evidence, and had offered ample additional opportunities to claimant to obtain other evidence to replace that which was excluded.

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Can the offset for Social Security retirement benefits provided in K.S.A. 44-501(h) be applied to an award of permanent partial disability benefits where the claimant was already receiving the Social Security benefits prior to his work injury?

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HOESLI V. TRIPLETT, INC., 391 P.3D 18 (KAN.APP. 2014) No. In Hoesli v. Triplett, Inc., the Court of Appeals

departed from the precedent established by and followed in a long line of appellate cases because of the Senior Citizens’ Freedom to Work Act of 2000. In that case, the claimant had begun receiving Social Security retirement benefits after he started working for the respondent but before his work injury. He continued receiving his retirement benefits while he was being paid temporary total disability benefits and after he reached maximum medical improvement. The employer argued that the plain language of section 44-501(h) and the existing case law required the Court to apply the statutory offset.

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HOESLI V. TRIPLETT, INC., 391 P.3D 18 (KAN.APP. 2014) The Court in Hoesli acknowledged that, if it were to

follow the plain language of the statute or the rationale from the numerous appellate cases addressing this issue during the last decade, the offset for retirement benefits would apply in this case. However, the Court determined that the Senior Citizens’ Freedom to Work Act of 2000 changed the applicability of existing case law to the facts of the case. The Court determined that the change in the federal Social Security law clarified that social security retirement benefits are not a form of wage replacement but serve other important purposes. Accordingly, the Court reasoned that there is no longer a “duplication of benefits” where the injured worker was already receiving retirement benefits prior to the work injury. Because there is no duplication of benefits, the Court held that the 44-501(h) offset did not apply.

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In a maximum work disability case resulting from the aggravation of a preexisting condition, can the court award the claimant a maximum award even after reducing the award of compensation by the claimant’s preexisting functional impairment under K.S.A. 44-501(c)?

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No. Prior to the recent decision in Ward v. Allen County Hospital, administrative law judges and the appeals board had been awarding maximum work disability benefits even after theoretically “reducing” the award of compensation for preexisting impairment pursuant to section 44-501(c). This was a result of 2 clear errors. First, the workers compensation courts were reducing the percentage of work disability rather than the “award of compensation” by the claimant’s preexisting impairment. Second, the courts were calculating benefits well beyond the maximums established in K.S.A. 44-510f before calculating the reduction.

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In Ward, the administrative law judge determined that no reduction was required for preexisting impairment despite the fact that the evidence established the claimant had 15% preexisting impairment and that the work accident in question resulted in an aggravation of her preexisting condition. The Appeals Board disagreed, and determined that the Claimant’s 75.75% work disability should be reduced to 60.75%. Ultimately, the Appeals Board found that the claimant was still entitled to a maximum award of $100,000 even after the 44-501(c) “reduction.”

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In Ward, and in two unpublished opinions released the same day, the Court of Appeals held that the plain language of section 44-501(c) clearly requires courts to reduce the “award of compensation,” not the percentage of work disability, by the amount of the claimant’s preexisting functional impairment. The Court also confirmed that, because an award of compensation cannot exceed the values established in K.S.A. 44-510f, the starting point for the 44-501(c) reduction cannot be higher than those statutory maximums. The Court then held that the appropriate way to calculate a 44-501(c) reduction in maximum work disability cases is to reduce the award of compensation by the percentage of the preexisting functional impairment. Accordingly, it determined that Ms. Ward’s award of $100,000 should be reduced by 15% to $85,000.

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Ward v. Allen County Hospital, 324 P.3d 1122 (May 2014);

Jamison v. Sears Holding Corp., 2014 WL 1887645 (May 9, 2014);

Ballard v. Dondlinger & Sons Construction Co., 2014 WL 1887654 (May 9, 2014).

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Where a claimant alleges a work-related aggravation of a preexisting work injury, and the preexisting injury was sustained while working for the same employer, is the employer entitled to a credit for disability benefits paid in the previous workers compensation claim as well as the current claim under K.S.A 44-510f(a)(3)?

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JAMISON V. SEARS HOLDING CORP., 2014 WL 1887645 (MAY 9, 2014). According to the unpublished decision in Jamison

v. Sears Holding Corp., it depends on whether the claimant actually suffered a new “injury” rather than just an aggravation in the subsequent accident. In Jamison, the claimant suffered a 2007 back injury, which resulted in 10% permanent impairment. In connection with the 2007 injury, Mr. Jamison received $5,914.34 in temporary total disability benefits as well as $28,966.79 in permanent partial disability benefits. In 2010, Mr. Jamison suffered an aggravation of his 2007 back injury. He then stopped working and alleged that he was entitled to a maximum work disability award. In connection with the 2010 injury, the employer paid Mr. Jamison $15,591.22 in temporary total disability benefits.

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JAMISON V. SEARS HOLDING CORP., 2014 WL 1887645 (MAY 9, 2014). The employer asserted that, in addition to

reducing the award due to the claimant’s preexisting impairment, the court should reduce the award by $50,472.35, the total amount of disability benefits paid to the claimant in his 2007 and 2010 claims. The employer based this argument on K.S.A. 44-510f(a)(3), which states, “the maximum compensation benefits payable by an employer shall not exceed . . . for permanent or temporary partial disability, including any prior temporary total . . . or permanent partial disability payment paid . . . $100,000 for an injury or any aggravation thereof.” The administrative law judge and the Appeals Board rejected this argument, suggesting that the $100,000 cap applies to each individual accident.

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JAMISON V. SEARS HOLDING CORP., 2014 WL 1887645 (MAY 9, 2014).

The Court of Appeals noted that the plain language of K.S.A. 44-510f(a)(3) indicates that the statutory maximum applies to each “injury or aggravation thereof” rather than to each accident. Accordingly, the Court found that, if Mr. Jamison did not suffer a new injury as defined by K.S.A. 44-508(e) in 2010 but simply aggravated his 2007 injury, the employer would be entitled to a credit for the benefits paid in both claims. Because the Appeals Board did not make a factual finding about whether Mr. Jamison suffered a new “injury” in 2010, the Court remanded the case to the Board for clarification

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Can the Court of Appeals reweigh the evidence to reverse an Order from the Kansas Appeals Board?

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LAKE V. JESSEE TRUCKING, 316 P.3D 796 (KAN. APP. 2013)

No, but in the recent opinion in Lake v. Jessee Trucking, 316 P.3d 796 (Kan. App. 2013), the court arguably did so. The court in Lake correctly noted that K.S.A. 77-621(d) expressly prohibits Kansas appellate courts from reweighing the evidence or engaging in de novo review when reviewing the Appeals Board’s factual findings. However, the court then proceeded to reweigh the evidence and, ultimately, reversed the order from the Board.

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LAKE V. JESSEE TRUCKING, 316 P.3D 796 (KAN. APP. 2013) In Lake, the primary issue was whether the

Appeals Board’s finding that Mr. Lake’s neurological injuries did not arise out of his employment was supported by substantial evidence. Mr. Lake alleged that he suffered his neurological injuries when a 600 pound bed liner pushed him against a trailer in the course of his employment. The Administrative Law Judge found Mr. Lake’s claim compensable and awarded him permanent total disability benefits. The Appeals Board reversed the Award from the ALJ, noting that Mr. Lake did not promptly seek medical treatment after his accident and that his contemporaneous medical records did not mention either a work accident or neurological symptoms. Accordingly, the Appeals Board found that, although Mr. Lake did have a compensable work injury, it was limited to a groin strain.

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LAKE V. JESSEE TRUCKING, 316 P.3D 796 (KAN. APP. 2013)

In order to find that the Appeals Board’s findings were not supported by substantial evidence, the court in Lake relied on testimony from Mr. Lake and medical records suggesting that he was not the type of person to promptly seek medical attention, even when facing a serious medical condition. The court also attempted to discredit the contemporaneous medical records, which were silent regarding a work accident or neurological symptoms, and the medical providers who prepared those records, in order to justify its reversal of the Board’s order.

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QUESTIONS???

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