State News : Alabama

Membership in the AWCO offers a number of professional and social opportunities annually to interact with other workers' compensation professionals. The highlight of the year is the annual AWCO Spring Conference where its members come together for three days of education, fun, and fellowship. Membership is only $75 if paid prior to February 27, 2015. After that, the annual fee goes up to $150. Once you are an AWCO member, the Spring Conference is free. You pay nothing, nada, zero, zilch to register and attend. If you have any questions about the AWCO, membership, the Spring Conference, or simply need an application for membership, feel free to call or e-mail Mike Fish (contact info below). ________________________ About the Author This blog submission was prepared by Mike Fish, an attorney with Fish, Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers' compensation. Fish Nelson & Holden is a member of the National Workers' Compensation Defense Network. If you have any questions about this submission or Alabama workers' compensation in general, please contact Fish by e-mailing him at mfish@fishnelson.com or by calling him directly at 205-332-1448.

Similar to the decision which was discussed on our blawg on November 7, 2014, the Court of Civil Appeals again held in Ex Parte Lost River Oilfield Services, LLC, that out-of-state injuries will only be compensated by Alabama’s Act when specific conditions are met. Jurisdiction will not exist over a claim for workers’ compensation benefits for employment which is principally located in another state unless the employee shows that the workers’ compensation laws of that state are not applicable to the employer. Kenneth Bailey, an Alabama resident, filed a Complaint for workers’ compensation benefits under the Alabama Workers’ Compensation Act in Mobile County, Alabama, for an injury he suffered while working for Lost River Oilfield Services in Texas. In his Complaint, Bailey specifically cited Ala. Code § 25-5-35(d)(2), which provides that employees are entitled to benefits under the Act for injuries sustained out-of-state when the employee was working under a contract of hire made in Alabama in employment not localized in any state. Bailey provided evidence indicating that steps were taken in Alabama which led to the employment contract with Lost River. He did not, however, provide evidence that the employment was not localized in any state or that the employer was not subject to the workers’ compensation laws of Texas. Lost River filed a motion to dismiss for lack of jurisdiction and submitted affidavit testimony providing that Lost River did not do business in Alabama and did not think it could be sued in Alabama simply because an employee they hired to work in another state was originally from Alabama. The trial court denied Lost River’s motion to dismiss, so Lost River petitioned the Court of Civil Appeals for a writ of mandamus directing the trial court to dismiss the action for lack of subject matter jurisdiction. The Appeals Court considered evidence indicating that, at the time of the alleged injury, Bailey worked at Lost River’s place of business in Texas, that he lived in a residence provided by Lost River at the work site, that Bailey’s work days began and ended at the site, and that the injury itself occurred on the site. There was no indication that Bailey ever worked in Alabama for Lost River or that he was working anywhere other than Texas at the time of his alleged injury. Aside from arguing that the events leading up to his contract of employment with Lost River occurred while he was in Alabama, Bailey failed to offer any evidence showing that his employment was not localized in Texas. The Court therefore found that Bailey’s employment was principally localized in Texas, and, as a result, Ala. Code § 25-5-35(d)(2) was not applicable. The Court also noted that Bailey presented no evidence, and did not even raise the issue, as to whether or not the workers’ compensation laws of Texas would apply to his injury. For these reasons, the Court of Appeals granted Lost River’s petition and directed the trial court to dismiss the action for lack of subject matter jurisdiction. __________________________________ About the Author This blog post was written by Trey Cotney, Esq. of Fish Nelson & Holden LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson & Holden is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

Ex parte Dalton Logistics

Petition for Writ of Mandamus

On November 7, 2014, The Alabama Court of Civil Appeals granted Dalton Logistics Petition for Writ of Mandamus. The Choctaw County Circuit Court had denied Dalton Logistics summary judgment motion, which asserted the Alabama court did not have subject matter jurisdiction over the injury that occurred in North Dakota. The Alabama Court of Civil Appeals ordered that the matter be remanded to the trial court and that the trial court enter an order dismissing the case for lack of subject matter jurisdiction.

The employee was a resident of Alabama and was informed of job openings with Dalton Logistics in North Dakota. The employee was sent "paperwork" via facsimile, which he completed and sent back to Dalton Logistics in North Dakota. Dalton Logistics arranged transport for the employee to North Dakota. Upon arrival, Dalton Logistics housed the employee in a "man camp" located in North Dakota. From the "man camp" Dalton Logistics would transport the employee to various work sites in North Dakota. Dalton Logistics did withhold Alabama income taxes from the employee’s check. The employee would work in North Dakota for 20 days and then Dalton Logistics would provide transportation back to Alabama where the employee would stay for 10 days, performing no work for Dalton Logistics.

The employee was injured on a job site in North Dakota. Dalton Logistics did not file the initial report of injury with North Dakota’s workers’ compensation investigative and adjudicatory entity within 7 days. The employee subsequently filed for workers’ compensation benefits under Alabama law.

In ruling in favor of Dalton Logistics, the Alabama Court of Civil Appeals stated that Ala. Code 1975, §25-5-35(d)(1)-(4) addresses claims due to injury which occurred outside of Alabama. Generally, if injured outside of Alabama, and the employee would have been entitled to benefits had he been injured in Alabama, Alabama benefits are owed provide that several alternate conditions are met.

The first condition to consider is: was the employee’s employment principally localized in Alabama. In order to be principally localized in Alabama, or another state, the employer must have a place of business in the specific state, and the employee regularly works out of that place of business, or if the employee is domiciled and spends substantial part of the employee’s working time in service of the employer in that specific state.Associated Gen. Contractors Workers Comp Self Ins. Fund v. Williams, 982 So. 2d 557, 560 (Ala. Civ. App. 2007). In this case, the Alabama Court of Civil Appeals ruled that the employee was transported to North Dakota, housed in North Dakota during working periods and traveled to North Dakota locations to perform work for Dalton Logistics. While the employee was provided transport to Alabama he did not perform work for Dalton Logistics while in Alabama. In addition, the fact that Alabama income taxes were withheld did not establish the employment was principally localized in Alabama, as no work was performed in Alabama. Therefore, the employment in this case was principally localized in North Dakota.

The Alabama Court of Civil Appeals next analyzed was the employee working under a contract for hired entered into in Alabama, and, if so, 1) was the employment principally localized in any state, 2) was the employment principally localized in a stated but the employer was not subject to that state’s workers’ compensation laws and 3) was the employment outside the United States. There was no disputed that the employee was working under a contract for hire entered into in Alabama and the Court had already found the employer was principally localized in North Dakota. Therefore, they looked to see if Dalton Logistics was subject to the workers’ compensation laws in North Dakota. The employee cited N.D Cent Code §65-08-01 to support his contention that coverage was not afforded under North Dakota law. However, the Alabama Court of Civil Appeals stated that the North Dakota statute merely addressed that injuries sustained outside the state may nonetheless be compensable, which does not apply to injuries that occurred in North Dakota as the case before them. The employee next asserted that by failing to file paperwork in North Dakota within 7 days, Dalton Logistics implicitly recognized that North Dakota benefits where not available. The Alabama Court of Civil Appeals disagreed with this assertion based on the fact that the North Dakota Workers’ Compensation Act has built in sanctions for this situation. N.D. Cent. Code §65-05-01.4. In ruling that the employee had not proven Dalton Logistics was not subject to North Dakota worker’s compensation laws, they cited Barry v. Baker Elec. Coop., Inc., 354 N.W. 2d 666 (1984) (North Dakota law, not Minnesota, applied to claim stemming from injury due to conduct in North Dakota by a Minnesota-domiciled employee of a Minnesota employer). The Court stated "the Barry court expressly noted that ‘North Dakota has a long-standing and strong public policy interest in making workers’ compensation the exclusive remedy against an employer in the case of an injured employee.’" As a result, the Alabama Court o Civil Appeals found that the fact the contract for hire was entered into in Alabama alone did not support the trial court’s decision that it had jurisdiction over the case under the Alabama Worker’s Compensation Act.

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish, Nelson & Holden, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields.

If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atjholden@fishnelson.com or 205-332-1428.

Unless you have been cryogenically frozen in carbonite for the past 3 months, you have probably heard about the recent opinion released by Miami-Dade Circuit Judge Jorge Cueto which declared the Florida Exclusivity Doctrine unconstitutional.  His 22 page opinion (Padgett v. State of Florida No. 11-13661 CA 25) attacked the erosion of the Florida workers’ compensation system as a whole and asserted that the value of the benefits available to claimants did not justify thequid pro quo tort liability protections afforded employers.  The purpose of this article is to provide a general outline of what lead to Judge Cueto’s opinion and to consider its effect on a national scale.

Accident and Injury

The employee, Elsa Padgett, was an account clerk who tripped over some boxes that were left on the floor by a co-worker.  She reportedly fell on her hip and sustained significant injury to her shoulder.  After undergoing replacement surgery for her shoulder, she claimed that the resulting pain forced her to retire. 

Procedural Background

Padgett opted to file a negligence lawsuit against her employer.  In its Answer, the employer asserted the Exclusivity Doctrine (§440.11, Fla. Stat. 2003) as an affirmative defense.  Padgett then amended her Complaint to add a Count for Declaratory Relief asking the Court to declare the Florida Exclusivity Doctrine in violation of the U.S. and the Florida Constitutions.  Once Florida Worker’ Advocates (FWA) and Workers Injury Law & Advocacy Group (WILG) joined the party as interveners, the employer strategically withdrew its Exclusivity Doctrine defense and the negligence action was severed from the Declaratory Relief portion of the lawsuit.  The Florida Attorney General opted not to intervene in order to defend the constitutionality or validity of the Exclusivity Doctrine.  However, she did file a responsive pleading pointing out various procedural and substantive defects in the case.  FWA and WILG next sought a summary judgment but Judge Cueto denied the motion on the grounds that there was no longer a present justiciable controversy.  Padgett then intervened in the Declaratory Relief action which presented a controversy upon which Judge Cueto could rule (Florida empowers a judge to decide an issue if that issue is capable of repetition in the future and might evade review).

Erosion of Benefits

In his written opinion, Judge Cueto noted that the system of workers’ compensation is supposed to be the result of a compromise wherein employees receive immediate access to indemnity and medical benefits through a no-fault insurance system and employers are insulated, with limited exceptions, from tort liability.  He then pointed out that the benefits afforded employees had been greatly reduced as the result of the 2003 amendments that eliminated permanent partial disability benefits, put a 5 year cap on permanent and total disability benefits, capped said benefits at age 75, and apportioned medical care by requiring contribution in the form of co-pays by the employee after reaching maximum medical improvement.   Judge Cueto concluded that the Florida workers’ compensation system no longer provided adequate indemnity and medical benefits for injured workers and that preventing them from pursuing a tort remedy was a violation of due process.

Ruling

Judge Cueto ruled that the Florida Exclusivity Doctrine was unconstitutional on August 13, 2014.  One week later, he denied a motion for rehearing filed by the Attorney General’s office.

Appeal

The Attorney General appealed Judge Cueto’s ruling to the Third District Court of Appeal on August 26, 2014.  The case is now calledFlorida v. Florida Workers’ Advocates.  Should the District Court of Appeal decide to rule, its decision could become the law for the Third District, and possibly followed by the other Florida districts.  The Third District Court declined to certify the case directly to the Supreme Court and the District Court of Appeal also denied that request.  The Attorney General’s initial Brief is due on or before December 4, 2014.

According to Casey Gilson attorney Rayford Taylor, who practices in Georgia and Florida, there is a legitimate chance that Judge Cueto’s ruling will be treated merely as an advisory opinion rather than a declaratory judgment.    None of the Interveners established that they had been injured or prejudiced by the Exclusivity Doctrine, or by the provisions they cited as a basis for a challenge to the statute.  The issue may need to be addressed again the next time an employee sues an employer in tort and the employer asserts the Exclusivity Doctrine as a defense.

Other Constitutional Attacks in Florida

The Padgett case is not the first time this particular claimant’s attorney has taken the offensive against the Florida Workers’ Compensation Act on constitutional grounds.  According to attorney Rob Grace, who practices with the Bleakley Bavol firm in Florida, this same attorney has filed a number of these suits around the state during the last five years. Padgett just happened to be one where a judge accepted his argument.  The attorney filed a similar suit in Broward County which was dismissed approximately five years ago.  At the same time, the attorney had another comparable suit (Stahl v. Tenet Health Systems, Inc.) in Dade County which he lost at the Third District Court of Appeals level. 

The Florida Supreme Court is currently considering a couple of other cases involving constitutional attacks on the state’s workers’ compensation system.  In the case ofWestphal v. City of St. Petersburg, The Court has before it an appeal from a firefighter who was injured and left with no income after his temporary indemnity benefits expired.  His authorized doctors took him out of work and he was not eligible for additional benefits until the doctors placed him at maximum medical improvement.  The firefighter is challenging the constitutionality of the statutory limit on the payment of temporary total disability benefits.

In the case of Castellanos v. Next Door Company, the Florida Supreme Court is considering an appeal challenging the constitutionality of the statute that provides for the calculation of attorneys’ fees in workers’ compensation matters, based solely on a statutory percentage of benefits achieved by the attorney.

Other States

Although it has not yet risen to the level of a national trend, several other states have seen constitutional attacks on certain aspects of their respective workers’ compensation systems. 

In California, the constitutionality of the workers’ compensation lien system was recently raised in the case ofAngelotti Chiropractic v. Baker. 

Approximately 20 years ago, the entire Texas Workers’ Compensation Act withstood a constitutional challenge and, more recently, the Texas Office of Injured Employees Counsel released a few reports last year that pointed out the inequities of the alternative dispute resolution program. 

In Tennessee, there have been some unsuccessful constitutional attacks on other parts of the workers’ compensation statute (i.e. multipliers and the Medical Impairment Registry program) but not the Exclusivity Doctrine. 

Approximately 6 years ago In Alabama, an employee filed a motion seeking to have the $220 cap for permanent partial benefits deemed unconstitutional.  The judge denied the motion but stated in his Order that the cap set 23 years prior basically guarantees poverty for claimants and their families.  The judge further stated that "the trial courts see these workers leave our courtrooms week after week, without the ability to support themselves or their families."  The judge deemed the cap unfair but not unconstitutional and called upon the Alabama Legislature to make the change.  Several legislative attempts at increasing the cap have been made since that time but all have been unsuccessful. 

Moral of the Story

According to Rob Grace, “my prediction is that, in the end, nothing will come ofPadgett.  Maybe I will be proven wrong but I find it difficult to believe that our supreme court is going to basically throw out the entire workers’ compensation statute.”  Rayford Taylor agrees with Grace.  According to Taylor, “I do not see how mere allegations that certain provisions are different from what they once were invalidates the tort immunity of an employer whose only offense was complying with the statute.”  Even if Grace and Taylor are correct, there remain lessons that can be learned from the Padgett opinion and other such cases.  The more you reduce benefits to employees, the more susceptible to constitutional attacks your workers’ compensation system becomes.  In his now already infamous opinion, Judge Cueto referred to a First District Court of Appeal comment on the “minimum” requirements necessary for a workers’ compensation system to pass constitutional muster.  InBradley v. Hurricane Restaurant (an 18 year old case that interestingly involved both attorneys Taylor and Grace), the Court stated that workers’ compensation law continues to be a “reasonable alternative to tort litigation” when it “provides injured workers with full medical care and benefits for disability (loss of wage earning capacity) and permanent impairment regardless of fault, without the delay and uncertainty of tort litigation.”  In Judge Cueto’s opinion, the Florida system does not meet this minimum.  Does yours?

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About the Author

This article was written by Michael I. Fish, Esq. of Fish Nelson & Holden LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson & Holden is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atmfish@fishnelson.com or any firm member at 205-332-1448.

On October 10, 2014, the Alabama Court of Civil Appeals released its opinion in the case ofArthur Barney v. Elizabeth Bell, as personal representative of the estate of Maurice Bell, deceased, and William Clay Teague. This case was before the Court for a second time, because Barney filed an Application for Rehearing after the Court ruled against Barney on July 18, 2014. A summary of the facts of the case and the Court of Appeals’ first opinion can be foundhere. On rehearing, the Court reversed itself and the trial court, holding that Barney’s attorneys were not entitled to summary judgment on Barney’s claim that they committed malpractice by retaining an excessive attorney’s fee on the workers’ compensation claim. The Court also held that Barney was entitled to partial summary judgment on that claim. The Court entered judgment in favor of Barney in the amount of $6,375.00, and remanded the case to the trial court for a determination of whether Barney is entitled to additional compensatory of punitive damages.

In reaching its decision, the Court noted that the attorneys failed to present any expert testimony regarding the reasonableness of their fees, and that they were therefore not entitled to summary judgment on Barney’s malpractice claim. The Court further noted that there was no factual dispute as to whether the attorneys breached the standard of care, thus committing malpractice, by keeping too much of Barney’s workers’ compensation settlement for their fee.

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ABOUT THE AUTHOR

This article was written by Charley M. Drummond, Esq. of Fish Nelson & Holden, LLC. Fish Nelson & Holden is a law firm located in Birmingham, Alabama dedicated to representing employers, self-insured employers, and insurance carriers in workers’ compensation cases and related liability matters. Drummond and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields. If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at cdrummond@fishnelson.com or (205) 332-3414.

Today the Alabama Workers’ Comp Blawg celebrates another birthday. We would like to take this time to thank all of our readers who have helped to makehttp://www.alabamaworkerscompblawg.com a go to reference for Alabama workers’ compensation over the last 7 years!