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H&W Workers' Compensation Defense Newsletter
Vol. 1, Issue 4

Hamberger & Weiss Elects Nicole Graci to Partnership 

We are pleased to announce that Nicole Graci has been elected as a partner in the firm, effective January 1, 2017. Nicole has been practicing workers' compensation defense since 2000. She plays a lead role with the firm's Section 32 settlement team and is a frequent presenter on various aspects of New York Workers' Compensation Law and Medicare Secondary Payer Compliance, including Mandatory Insurer Reporting under the Medicaid and S.C.H.I.P. Extension Act of 2007. 

Since 2011, she has authored the New York section of The Complete Guide to Medicare Secondary Payer Compliance(Jennifer C. Jordan, Editor-in-Chief). In 2015 she also contributed the settlement chapter of theNew York Workers' Compensation Handbook, published by LexisNexis and authored byRonald E. Weiss and Ronald Balter. 

She is a member of the Erie County and New York State Bar Associations, member of the Erie County Bar Association Workers' Compensation Committee, Secretary and Board Member of the Erie County Bar Foundation, Vice President of the Self-Insurers' Association of the Niagara Frontier, and is on the National Workers' Compensation Defense Network's Medicare Compliance Committee.

Nicole is resident in our Buffalo office.

Recent Developments in Loss of Wage Earning Capacity

On 11/3/16, the Appellate Division, Third Department ruled in three decisions that the Board can consider vocational factors in determining the weekly rate of compensation for permanently partially disabled claimants. Prior to this, the Appellate Division consistently held that vocational factors were relevant only with respect to the duration of benefits for a permanently partially disabled claimant and had no bearing on the rate of compensation. The 11/3/16 decisions are a departure from prior decisions regarding the determination of a claimant's weekly compensation rate and clarify that the Board need not base the compensation rate for permanently partially disabled claimants solely on medical impairment. 

Allowing the consideration of vocational factors in setting the rate of compensation for permanently partially disabled claimants is surprising, given that Section 15(5-a), the statutory basis for setting the rate of compensation for both temporary and permanent disability, contains no reference to vocational factors—a point often made by the Appellate Division in its decisions prior to 11/3/16 on this issue.
The lead decision on this issue was Rosales v. Eugene J. Felice Landscaping,in which the Court explicitly declined to extend its ruling in Canales v. Pinnacle Foods, LLC, to permanent partial disability claims.Canales concerned a dispute over whether vocational factors could be considered in determining the rate of compensation during a period of temporary disability. Although language inCanales and the subsequently decided Franklin v. New England Motor Freight stated that vocational factors are only relevant in determining the duration of a claimant's permanent partial disability benefits, the Court inRosales decided that vocational factors could be considered in determining the rate of compensation for a permanently partially disabled claimant. In distinguishingCanales, the Court relied on what it called a “key distinction” between temporary and permanent disability: that permanently partially disabled claimants have “no expectation” of returning to their former or similar employment and thus it is “necessary” to consider vocational factors in such cases even though it is not appropriate to do so for temporarily disabled claimants.
Any hopes that the Court’s decision in Rosales was an anomaly were dashed by Sarbo v. Tri-Valley Plumbing & Heating in which the Court applied its holding in Rosales to a different fact pattern, making it clear that theRosales rule applies to all permanent partial disability claims.
Finally, in Till v. Apex Rehabilitationthe Court held that, for a non-working claimant, "loss of wage earning capacity" is not automatically the inverse of the claimant’s "wage earning capacity." Rather, the claimant’s wage earning capacity is a separate and distinct factual determination from loss of wage earning capacity.

In light of these recent decisions, it is important to remember that vocational factors can affect the rate of compensation as well as the duration of PPD benefits. Thus, employers and carriers should obtain and use vocational evidence such as vocational expert reports in appropriate cases to develop the best defenses on their cases. 

Board Announces New Opioid Weaning Process

The Board has announced a new hearing process for opioid weaning issues. The RFA-2 form has been modified to include a new hearing purpose under the “Medical Issues” section of the form labeled “Opioid Weaning under Non-Acute Pain Guidelines.” To use this section of the form, the Board isrequiring an Independent Medical Examination or records review which states weaning is appropriate and provides a weaning program or resource. There isno requirement for an IME or record review within the regulations or the Medical Treatment Guidelines. The burden is on the attending physician to comply in the first place. In fact, there are some Board Decisions that direct weaning without an IME or record review, or when such a report was already precluded. Nevertheless, we always recommend an IME or record review as they tend to provide appropriate alternatives and weaning plans.
Once the employer, carrier, or administrator files the RFA-2 for opioid weaning, the claimant is to obtain a report from his or her prescribing physician, which must be filed by the date of the hearing.  The hearing should be held approximately 45 days after the Board notifies the claimant of your request for a hearing. If the claimant wishes to depose the IME, such transcript must be submitted to the Board before the hearing. If the claimant submits contrary medical, the employer/carrier may request cross-examination of the provider at the hearing.
The WCLJ will issue a ruling that either directs weaning, weaningand enrollment in an addiction treatment program or no weaning. The employer/carrier will be required to cover the cost of any addiction treatment program or weaning protocol. If the WCLJ orders enrollment in an addiction treatment program, after 30 days the employer/carrier will only be liable for payment of narcotic prescriptions written by an addiction treatment program physician. The Board has developed a brochure with the cooperation of the NYS Office of Alcoholism and Substance Abuse Services with information regarding addiction treatment services available throughout the State.  
Certainly, these are continuing moves in the right direction on this issue.

Court of Appeals Issues Two Decisions in November

The Court of Appeals is the highest court in the State of New York and the Court of last resort in New York Workers' Compensation matters. Decisions from the Court of Appeals on workers' compensation matters are rare as only a few cases each year are accepted by the Court for review.   

In Ace Fire Underwriters Insurance Company v. Special Funds Conservation Committee, the Court ruled that the Special Disability Fund’s written consent to settlement of a third party action settlement must be obtained but if it was not, the carrier has the right to compel Special Funds’ consent via an order nunc pro tunc

In Diegelman v. City of Buffalothe Court ruled that municipalities electing not to provide workers’ compensation coverage for police officers may be sued by officers injured in the line of duty. General Municipal Law (GML) §207-c does not bar such an action.  Presumably the right to sue would also apply to firefighters covered under GML §207-a but not by an employer’s workers’ compensation plan. This decision shows that the General Municipal Law does not provide the same exclusive remedy provisions to employers afforded by the Workers' Compensation Law. 

H&W Obtains §114-a Fraud Finding at Appellate Division

In Leising v. Williamsville Central School District,our firm successfully convinced the Appellate Division to reverse a Board finding that the claimant did not commit workers' compensation fraud under WCL §114-a. This case involved a claimant who was working in a seasonal job at a golf course while collecting indemnity payments. Claimant initially disclosed her job at the golf course to the carrier, but then subsequently rescinded the disclosure, stating that it was a mistake and that she was not working. Later, claimant also failed to disclose the employment during a telephone conversation with the carrier’s claims handler when asked if she was working. The claimant inadvertently tipped the carrier off to her job by calling the claims handler from the golf course, causing her employer’s name to show up on the caller ID display. 
The WCLJ found a fraud violation and imposed a lifetime disqualification from indemnity awards. Claimant appealed and the Board reversed, inexplicably finding that any misrepresentations by claimant about her work activities were not material for purposes of the fraud statute. Eventually realizing their mistake, the Board then issued a modified decision simply finding insufficient proof that claimant concealed her employment from the carrier. 
The Appellate Division reversed under the substantial evidence rule, finding no rational reading of the evidence in the record could support the Board’s finding. This holding by the Appellate Division is notable for two reasons. First, reversals under the substantial evidence rule are rare. The Court almost always defers to factual findings by the Board. Second, the Court is normally bound by the Board’s credibility findings when assessing the weight of witness testimony. However, in this case the court parsed the facts in the record closely, and held that the Board credibility findings were irrelevant, stating that no credibility issue existed on the important points of testimony from the carrier’s main witness. This holding by the Court could arguably be interpreted as stating that no credibility issue exists as a matter of law when the important points of witness testimony are not contradicted and there is no other reason to question the veracity of that testimony. Additional decisions from the Court may be needed to clarify to whether this is what the Court intended. The case now returns to the Board for a modified decision regarding whether the misrepresentations identified in the Court’s decision were material.  

Appellate Division Rules that Federal Lawsuit for Sexual Discrimination, Assault is 3rd Party Action Requiring Carrier's Consent to Settle

Shiner v. SUNY at Buffalo stemmed from an incident in December, 2010, when one of claimant’s supervisors sexually harassed and groped her at an office holiday party. Claimant filed a workers’ compensation claim, and also sued her supervisor and the employer in federal court, alleging a hostile work environment, discrimination, battery, and assault. The workers’ compensation claim was established for post-traumatic stress disorder and a neck injury. Claimant settled her federal lawsuit against the supervisor and employer for $255,000.00, with both the employer and supervisor contributing funds to the settlement.  $65,000.00 of the settlement amount was specifically allocated for “back and front pay.” Claimant did not obtain consent from the carrier before settling the federal lawsuit. 
Upon learning of the settlement, the carrier sought disqualification from all future workers’ compensation benefits under WCL §29 based on claimant’s failure to obtain its consent to the federal lawsuit settlement. Claimant argued that the federal lawsuit was not a third-party action within the meaning of the WCL §29, highlighting language in the statute referring to “the negligence or wrong of another not in the same employ.” Claimant also argued that the lawsuit stemmed from intentional actions of a co-worker, and that this took the lawsuit outside of the scope of a third-party action. 
The Appellate Division noted that a portion of the claimant’s recovery from the lawsuit was for lost wages. Citing a previous decision from the Court of Appeals, the Appellate Division stated, “[w]henever a recovery is obtained in tort [a specific form of civil lawsuit] for the same injury that was a predicate for the payment of compensation benefits,” it would be unreasonable to bar reimbursement for workers’ compensation payments made by the carrier simply because the claimant recovered money from the pockets of a co-worker or the employer as opposed to from a stranger. An exception to this rule applies where the actions by the co-worker or employer are done in furtherance of the employer’s business, which is clearly not the case for a sexual assault. 
The bottom line is that when there is any doubt about whether a claimant’s civil lawsuit falls within the scope of the definition of a third-party action under WCL §29, the claimant acts at his or her peril by settling that lawsuit without first seeking consent of the workers’ compensation carrier.  

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Buffalo, NY 14202

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Rochester, NY 14614

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