State News : North Carolina

On July 16, 2006, Donald Price, Jr. was working for Piggy Palace, d/b/a Hannah’s BBQ as a cook when a co-worker slipped and fell, spilling over three gallons of hot grease onto Price, who was 18 years old at the time.  Price was admitted to the trauma unit at North Carolina Baptist Hospital, where he underwent surgery to attach skin grafts to his right foot.  The skin graft was noted to be a “100% graft take” and the burned skin initially re-epithelized without evidence of hypertrophic scarring. 

However, Price subsequently developed neuropathic pain in the lower extremity, as well as hypertrophic scarring and pigmentation abnormalities.  Price’s doctors recommended that he undergo pulse dye laser treatment to relieve the pain, itching and appearance of the scars, and opined that Price would not be at maximum medical improvement until this treatment was completed.  When defendants refused to authorize the laser treatment, Price requested a hearing. 

Following hearing, Deputy Commissioner Gillen ordered Defendants to pay for the laser surgery and to reimburse Price’s parents for travel expenses.   Defendants were also ordered to pay $10,000 for serious bodily disfigurement pursuant to N.C.G.S. § 97-31(22).   Defendants appealed to the Full Commission, which also ordered Defendants to pay for the surgery and the parents’ travel expenses, but reversed the disfigurement on the theory that it should be held in abeyance pending the results of the laser surgery.   The Full Commission also ordered Defendants to pay $5,000 in attorney’s fees pursuant to N.C.G.S. § 97-88.1 because it found that Defendants had pursued the appeal on the issue of the laser surgery without reasonable ground. 

Defendants appealed to the Court of Appeals, which on July 20, 2010 in the case of Price v. Piggy Palace, d/b/a Hannah’s BBQ affirmed the Commission’s award of travel expenses to Plaintiff’s parents, but remanded the case to the Commission for further findings of fact on the issue of attorney’s fees.  On the issue of travel expenses, the Court rejected Defendants’ argument that the Commission’s findings regarding the services Plaintiff’s mother performed for Plaintiff in the hospital were not supported by competent evidence.  The Commission had found that the medical staff at the hospital taught Plaintiff’s mother how to change his dressings and stretch the scars, which meant that following Plaintiff’s release from the hospital, Defendants did not have to pay for a home health nurse because Plaintiff’s mother was able to perform these tasks.  The Commission also found that Plaintiff’s mother was at the hospital every day during Plaintiff’s admission, helping with bathing, walking, and physical therapy.  Plaintiff’s father drove back and forth to the hospital, bringing Plaintiff’s mother clothes and food, so that Plaintiff’s mother could stay with him 24/7.   Plaintiff’s doctor testified to the importance of having family support following such a painful and deforming injury. 

In affirming the Commission’s award of travel expenses to Plaintiff’s parents, the Court also rejected Defendants’ argument that the presence of Plaintiff’s parents was not medically necessary.  In so holding, the Court stated that the “evidence establishes that Plaintiff’s mother provided critical physical and psychological care to Plaintiff during his treatment and rehabilitation in the hospital, in addition to emotional support.”  The Court went on to state that “Defendants fail to persuade us that Plaintiff’s treatment and rehabilitation would be considered medically necessary had it been provided by a doctor, nurse, or physical therapist, but not when it was provided by Plaintiff’s mother.”

The Court also rejected Defendants’ argument that the treatment in question must be medical, as opposed to emotional or spiritual, and must effect a cure or lessen the period of disability.  Citing Little v. Penn Ventilator, the Court stated that “awards for medical expenses for treatment are appropriate ‘even if those treatments will not lessen the period of disability as long as they are required to effect a cure or give relief.’” 

Defendants finally argued that Rule 407(6) of the Rules of the Industrial Commission only authorizes reimbursement to the employee traveling to receive medical treatment.  The Court likewise rejected this argument, holding that “while the rule limits the individual entitled to receive the reimbursement . . . , [it] does not limit the party incurring the travel expenses and, instead, requires reimbursement for travel when it is ‘medically necessary.’” 

On appeal Defendants also argued that the Full Commission erred in awarding attorney’s fees under N.C.G.S. § 97-88.1, which authorizes an award of attorney’s fees when the Commission determines “that any hearing has been brought, prosecuted, or defended without reasonable ground . . . .”   In awarding attorney’s fees, the Full Commission found that Defendants had pursued the appeal without reasonable ground.  Citing to Troutman v. White & Simpson, Inc., and Beam v. Floyd’s Creek Baptist Church, the Court held that N.C.G.S. § 97-88.1 applies only to the “original hearing,” whereas N.C.G.S. § 97-88 authorizes an award of attorney’s fees to plaintiff’s counsel even in the absence of a finding of unreasonable defense, when defendants appeal to the Full Commission or the Court of Appeals and the appeal results in an award to the plaintiff. 

Risk Handling Hint:   In upholding the Commission’s award of travel reimbursement to Plaintiff’s parents, the Court in Price stated that “under the specific circumstances presented here, the psychological and emotional benefits to Plaintiff that flowed from having the support of his parents while he was recovering in the hospital from devastating burns likewise constitutes ‘relief’ as that terms is used in the statute.”   It remains to be seen whether the decision in Price will open the floodgates to claims from family members for medical travel from family members of the injured employee, and whether the Commission will limit the applicability of the decision to cases involving the extraordinary circumstances presented in Price.

Teacher’s Injury While Climbing Stairs Ruled Not an Accident

For fifteen years, teacher Maureen Shay used the elevator in Salisbury High School to reach her second-floor classroom because she found it difficult to walk up the stairs. However, on November 3, 2006, the elevator became inoperable and Shay had to start using the stairs on a daily basis.  Approximately one month later, as she was going up the stairs at the school, her left knee popped and gave out.  She was subsequently diagnosed with pre-existing, non-disabling degenerative arthritis and medial meniscus tear in the left knee. 

Defendant denied Shay’s claim on the ground that she had not suffered an injury by accident.  Following a hearing, Deputy Commissioner Griffin denied Shay’s claim, finding that “climbing the stairwell had become part of plaintiff’s normal work routine” and therefore her injury was not the result of an accident.  The Full Commission reversed, however, concluding that “the act of climbing the stairs as opposed to using the elevator was an interruption of plaintiff’s normal work routine and introduced new conditions to plaintiff’s employment” and that “the period of time during which plaintiff had to break from her normal routine of using the elevator was insufficient for the act of climbing the stairs to become part of her normal work routine.” Commissioner Ballance filed a dissenting opinion stating that “at the time of her injury the elevator had been ‘out of service’ for four weeks and climbing stairs had become part of her normal work routine.”

Defendant appealed to the Court of Appeals, which in a 2-1 decision filed on July 20, 2010 reversed the Commission in the case of Shay v. Rowan Salisbury Schools.  In so holding, the Court cited to Bowles v. CTS of Asheville for the proposition that “once an activity, even a strenuous or otherwise unusual activity, becomes a part of the employee’s normal work routine, an injury caused by such activity is not the result of an interruption of the work routine or otherwise an ‘injury by accident’ under the Workers’ Compensation Act.” 

In its analysis, the Court first noted that since plaintiff did not stumble, fall, trip, slip, or twist her knee, she had not suffered an accident “in the routine sense of workers’ compensation analysis.”  The Court then looked to whether climbing the stairs constituted an interruption of plaintiff’s work routine.  In this regard, the majority looked to the decision in Trudell v. Heating & Air Conditioning Co., where the Court held that an injury which occurred after the employee had worked in an unusually low crawl space for two weeks was not an interruption of the work routine because by that time, “the low crawl space had become part of plaintiff’s normal work routine.”   Similarly, in Shay, the Court held that “climbing the stairs for a period of more than one month became a part of plaintiff’s ‘normal work routine’ and that she did not suffer an injury that was compensable under the Workers’ Compensation Act.”

In reversing the Full Commission, the Court also noted that “the use of the stairs was not a ‘new condition of employment’ giving rise to a workers’ compensation claim” and that it was “reasonable to infer that the stairs were not newly added to the building when the elevator broke down, and had been there from the initial construction of the building.”  The Court noted that “plaintiff chose to use the elevator” and was not compelled by defendant to use either the elevator or the stairs prior to the elevator becoming inoperable.

Judge Wynn dissented, arguing that “climbing the stairs constituted a departure from [plaintiff’s] . . . normal method of reporting to her classroom,” and that “plaintiff . . . was required, as a result of the elevator malfunction, to engage in physical activity different than that to which she had become accustomed.”  Judge Wynn also noted that “witness testimony established that it was uncommon for the elevator to be broken for prolonged periods of time.”

Risk Handling Hint:  The decision in Shay is further evidence that there is no bright-line rule as to how long an employee must be performing a new job duty before it becomes a part of her normal work routine.  Judge Wynn’s dissent gives plaintiff an appeal as of right to the North Carolina Supreme Court, and it will be interesting to see how that Court resolves this issue.

While working as a welder for Gene Bennett Company, David Gross, who had a history of prior back problems dating from an injury suffered in 1997, fell through a ceiling, landing on a concrete floor 10 to 12 feet below.  He was treated by Dr. Thomas Florian, who eventually released him to return to full duty work.  Later, Gross sought additional treatment from Dr. David Allen, an orthopaedic surgeon.

An MRI of Gross’ low back showed evidence of mild degenerative changes.  A second MRI performed nine months later revealed a herniated disc at L4-5.  At that point, Gross requested a hearing, contending that his herniated disc resulted from the fall at work 14 months earlier. 

The parties stipulated in their pretrial agreement that the defendants had accepted Gross’ claim on a “medical only” basis.  Later, after the case was appealed to the Full Commission, it entered an opinion and award favorable to claimant which stated that greater weight had been given to Dr. Allen’s opinions than those of Dr. Florian.  The Commission interpreted Dr. Allen’s testimony as a sufficient basis for concluding that the herniated disc found on claimant’s second MRI was a compensable progression of the injuries he sustained in his fall at work.  

As legal authority for its resolution of the causation issue, the Commission cited Perez v. American Airlines, a 2005 Court of Appeals decision that applied to claims in which compensability is admitted on a Form 60 the “Parsons presumption” that if the Commission finds that a compensable injury occurred, all of the injured worker’s future medical treatment is presumed to be causally related.  The welding company and its insurer appealed the Commission’s ruling to the Court of Appeals, which in Gross v. Gene Bennett Co., a unanimous opinion filed on January 18, held that the “Parsons presumption” does not apply in “medical only” cases, because in such cases there has been neither a prior finding of compensability by the Commission nor an admission of liability by the defendants.

In the Parsons and Perez cases, the Court of Appeals placed the burden of proof on the defendants to rebut the presumption of causal connection and prove that the employee’s ongoing complaints and medical treatment were not causally related to his original work-related injury.  But, in Gross, the Court distinguished Parsons and Perez, noting that in Parsons, the Commission made a specific determination of compensability, and in Perez, the defendants had admitted compensability on a Form 60.   The Court held that “in the absence of an admission of compensability of an injury by the employer or an agreement between the parties, the Parsons presumption cannot arise at the initial hearing on compensability before the Commission.”  This is so because “it has long been the law of this State that acceptance of a claim on a medicals-only basis ‘cannot in any sense be deemed an admission of liability.’”

No presumption of medical causation having arisen from the defendants’ acceptance of Gross’ claim on a “medical only” basis, the Court went on to review the evidence of record on the issue of causal connection and find that the testimony of Dr. Allen, upon which the Commission had relied in concluding that there was a relationship between claimant’s original injury and his disabling condition, did not rise above the level of mere possibility or speculation and, therefore, was not legally sufficient to support the Commission’s award of benefits. 

Dr. Florian testified that claimant must have suffered a new injury to develop the herniated disc that was seen on the second MRI, but missing from the first.  When asked for his opinion on the subject, Dr. Allen was unable to say if the herniated disc’s presence established that a new injury had occurred.  And, he added that only if claimant had not had prior back problems would he be able to state to a reasonable degree of medical certainty that the herniated disc was likely related to his original on-the-job injury.  But, as claimant’s medical records clearly established, and the Commission specifically found, that he had previously injured his back, the Court concluded that the testimony from Dr. Allen upon which claimant was relying to establish causal connection did not rise above the level of possibility or speculation and, therefore, was insufficient support for the Commission’s award of benefits.

Risk Handling Hint:  Ever since  Parsons and Perez, it has been an open question as to whether acceptance of a claim on a medical only basis is sufficient to give the injured employee the benefit of the “Parsons presumption” that his later medical problems and treatment were caused by his initial work-related injury.  With the ruling in Gross, risk managers can now accept “medical only” claims and subsequently assert, and indeed successfully maintain, a defense if the employee later alleges additional medical problems, attempts to link them to his on-the-job injury and claims entitlement to indemnity compensation as a result. 

Settlement Agreement Containing Employment Release Held Unenforceable

Andre Kee, a Certified Nursing Assistant with Caromont Health, Inc., injured her back turning a patient, but continued to work under light duty restrictions.  Five months later, when her doctor took her out of work, she requested a hearing.  At a Commission-ordered mediated settlement conference, Caromont offered Kee two options:  (1) it would accept her claim as compensable if she would return to light duty work or (2) it would pay her a lump sum settlement in exchange for a clincher and her agreement to resign from her job and release all of her employment rights. 

Kee accepted Caromont’s clincher settlement offer and the parties executed a written agreement at the settlement conference which provided that Caromont would pay Kee $20,000 and the entire mediator’s fee for her agreement to pay her own medical bills, execute a standard compromise settlement agreement that complied with N.C.G.S. § 97-17, and sign a resignation and employment release.  The mediated settlement agreement specifically provided that Caromont’s payment of Kee’s share of the mediator’s fee would be the consideration for her resignation and release. 

When defense counsel prepared and sent a clincher to Kee, she refused to sign it, so  Caromont requested a hearing to enforce the agreement that she signed at mediation.  The hearing was held by Deputy Commissioner Phillip Holmes, who subsequently entered an opinion and award approving the settlement.

However, Kee appealed to the Full Commission, which reversed the deputy commissioner and ruled that the mediated settlement agreement was unenforceable because it failed to comply with Industrial Commission Rule 502(2)(e), which provides that no compromise settlement agreement will be approved by the Commission unless it contains the following language or its equivalent: “no rights other than those arising under the provisions of the Workers’ Compensation Act are compromised or released.”

Caromont appealed the Full Commission’s opinion to the Court of Appeals, which on January 4, in Kee v. Caromont Health, unanimously affirmed the Commission’s refusal to enforce the settlement that the parties had agreed to at mediation.  The Court rejected Caromont’s argument that the Commission could have severed the offending resignation and release provision from the agreement the parties executed at the settlement conference, and that would have brought it into compliance with all statutory requirements and applicable Commission rules. 

The Court was also not persuaded by Caromont’s citation to and reliance on American National Electric Corporation v. Poythress Commercial Contractors, Inc., which held that “when a contract contains provisions which are severable from an illegal provision and are in no way dependent upon the enforcement of the illegal provision for their validity, such provisions may be enforced.”  In the Court’s view, even if the resignation and release provision were severed from the rest of the agreement, it would still not comply with Rule 502(2)(e), as it did not contain the language required by that rule, i.e., that “no rights other than those arising under the provisions of the Workers’ Compensation Act are compromised or released.”  In order to enforce the parties’ settlement agreement, the Court would have had to add language to the agreement, not merely excise the objectionable portion of the agreement.  This, the Court was unwilling to do.  Therefore, since the agreement signed at mediation did not contain the language required by Rule 502(2)(e), the Court ruled that the Commission was correct in refusing to enforce  it.

Risk Handling Hint:  In light of the decision in Kee, risk managers are cautioned to carefully examine the terms of any settlement agreement that the mediator might produce for the parties to use, so as to ensure that it contains all of the language required by Rule 502.  At the same time, if the negotiations at mediation lead the parties to agree that the injured worker will resign from her employment and release whatever employment rights she might have, the terms of that agreement should be carefully drafted so as to avoid being in violation of Rule 502.