Workers' Compensation Defense

1.    The Delaware Supreme Court affirmed an Industrial Accident Board decision that concluded that a COVID-19 workplace exposure at a poultry processing plant did not qualify as a compensable occupational disease.
Fowler v. Perdue, 320 A.3d 196 (Del. June 24, 2024)

Mr. Fowler alleged that he suffered a compensable COVID-19 exposure while working as a “boxer” at a poultry processing plant. The Industrial Accident Board determined the claimant met his burden to prove that he more likely than not contracted COVID-19 in the cafeteria at work. However, under the Air Mod and Anderson analyses, in order to qualify as a compensable occupational disease, a claimant must show the COVID-19 infection “resulted from the peculiar nature of Mr. Fowler’s employment,” meaning the job had “a hazard distinct from and greater than the hazard attending employment in general.” Mr. Fowler did not satisfy those requirements, and the petition was denied.

On appeal, the Delaware Superior Court further explained the evidence showed that the cafeteria at Perdue presented a greater hazard than that attending employment in general. However, the hazard was not distinct from that attending employment in general.

The Delaware Supreme Court followed that same line of reasoning and affirmed the decisions below. The court conceded the cafeteria at Perdue was a high-risk environment and that essential workers at the time were at a higher risk than the general population. However, the evidence to show that the hazard was distinct from employment in general was not sufficient. The claimant attempted to prove that COVID-19 was peculiar to the poultry factory work by referencing congressional reports showing the prevalence of COVID-19 in meat factories and the underreporting of meat industry companies when it came to COVID-19. The court noted the studies did not reference Perdue as a source for that data or explain what specifically about working in the meat industry caused COVID exposure, besides being in crowded places in close proximity, like many other jobs. The court rejected the claimant’s last argument that the Board ignored that the exposure could have happened in both the box room and the cafeteria at work. The decision was affirmed.

2.    The Superior Court affirmed an Industrial Accident Board decision that concluded a claimant injured while performing employer-related volunteer activity was not within the course and scope of employment.
Testa-Carr v. Sallie Mae, 2024 WL 510993 (Del. Super. Feb. 8, 2024)

Ms. Testa-Carr worked as a customer service representative for Sallie Mae. On March 21, 2022, while delivering Meals on Wheels to an apartment in Newark, she fell down a flight of stairs and was injured. This volunteer work was arranged via Sallie Mae’s Employee Volunteer Program (EVP). The injury occurred during work hours, and the claimant was paid PTO for the volunteer work pursuant to the EVP. The employer denied on the basis that the volunteer activity was not within the course and scope of her employment. Ms. Testa-Carr filed a petition with the Industrial Accident Board to get her work accident accepted.

After an evidentiary hearing, the Board determined the claimant failed to meet her burden to prove she was within the course and scope of her employment. The Board determined that the correct legal standard was the analysis for non-sponsored recreational activities. It reasoned the claimant failed to satisfy any of the three factors established by the Larson’s treatise under a totality of the circumstances.

On appeal, the claimant contended the Board incorrectly applied the second and third factors of the Larson’s test. Specifically, the claimant argued that (1) Sallie Mae impliedly made the volunteer activity part of the services of an employee, thus bringing it within the orbit or employment, and (2) Sallie Mae derived a substantial direct benefit from the EVP. 

The court agreed with the Board’s conclusions and rationales on both issues. According to the court, the Board emphasized that volunteering was optional, employees were not treated better or worse based on their decision to volunteer, and the employee had complete discretion about what volunteer activity he or she wished to perform. Moreover, while the employer derived some benefit from employees’ volunteerism, the claimant’s outing did not reach the level of “substantial direct benefit” required by the third Larson’s factor. Ms. Testa-Carr chose Meals on Wheels on her own, was not required or encouraged to wear Sallie Mae apparel or identification, was not required to communicate with the recipients of the meal, had performed this volunteer activity on her own in the past, and conceded she often did not see the recipients. The the court found the Board’s decision was supported by substantial evidence and affirmed.

3.    The Delaware Supreme Court affirmed decisions of the Industrial Accident Board and Superior Court which held that an employer correctly paid for ketamine infusion treatment in accordance with the Delaware Fee Schedule.
Taylor v. State of Delaware, 314 A.3d 1107, 2024 WL 1209292 (Del. March 21, 2024) (TABLE)

Ms. Taylor injured her right wrist in 2016 while working as a teacher for the State of Delaware. The injury developed into complex regional pain syndrome (CRPS), involving multiple extremities. From 2017 to 2021, the State paid for 23 ketamine-infusion treatments to treat Ms. Taylor’s CRPS condition rendered by an out-of-state provider, Fort Washington Surgery Center. In 2019, the State contracted with a new bill-review company that paid substantially lower amounts than was paid for the same treatment previously. Ms. Taylor filed a petition that alleged these lower payments were insufficient and inconsistent with Delaware law. The Industrial Accident Board and Superior Court determined the payments made by the State were correct under the Delaware Workers’ Compensation Act’s healthcare payment system and fee schedule. The Superior Court affirmed the decision. The claimant appealed to the Delaware Supreme Court.

On appeal, Ms. Taylor argued the Industrial Accident Board failed to correctly apply the Act and Fee Schedule regulations, as interpreted in a Superior Court opinion Delaware Veterans Home v. Dixon. Specifically, the claimant alleged the Industrial Accident Board failed to assess the adequacy of medical billing codes by referring to resources from the American Medical Association or the National Correct Coding Institute. The court rejected this argument, noting the claimant bore the burden of proof on whether the billing codes used by the provider for the ketamine infusion treatment were insufficient or inaccurate. The resources cited by the claimant, while referenced in the fee schedule administrative regulations, the claimant failed to present such evidence at the Industrial Accident Board hearing. Further, it was emphasized that neither the employer nor the Board are responsible to present that evidence. There was no legal error. 

The court further advised that the Act’s Oversight Panel is the proper forum to determine whether specific billing codes provide reasonable compensation for a particular treatment, which was a secondary argument advanced by the claimant. The decisions below were affirmed.

4.    The Supreme Court affirmed an Industrial Accident Board decision and rejected an employer’s arguments that Superior Court Civil Rule 41(a)(1) and the doctrine of collateral estoppel barred a claimant from filing a petition for a recurrence of total disability benefits.
United Parcel Service v. Hawkins, 314 A.3d 663, 2024 WL 666726 (Del. Feb. 19, 2024) (TABLE)

Mr. Hawkins was injured in a work accident on October 28, 2018. On December 9, 2019, the claimant filed a Petition to Determine Additional Compensation Due that sought total disability benefits (TTD) and two surgeries, including a spine surgery. The employer filed a Petition for Review to terminate TTD. The claimant withdrew the TTD petition without prejudice. The Petition for Review was resolved via a settlement of the parties. Per a stipulation of the parties, approved by the Industrial Accident Board, the claimant’s TTD was terminated as of February 7, 2020, and he was placed on temporary partial disability benefits (TPD) as of October 17, 2020.

On April 20, 2021, the claimant filed a Petition to Determine Additional Compensation Due that again sought acknowledgment of two spine surgeries, resulting periods of total disability beginning on January 10, 2022, and extending beyond the TPD agreement. Before the hearing, the claimant voluntarily withdrew the petition. The claimant re-filed an identical petition on December 10, 2021. The employer moved to dismiss the petition on multiple bases, including that it was barred by (1) the doctrine of collateral estoppel, (2) the doctrine of res judicata and (3) Superior Court Civil Rule 41(a)(1)’s “Two Dismissal” rule. 

The Board rejected the employer’s arguments regarding collateral estoppel and res judicata because the issues and claims presented by the Petition to Determine Additional Compensation Due were new and different from prior agreements between the parties. Additionally, the Board explained it is not bound by the Superior Court Rules of Civil Procedure. Its own rules, and the rules of the Administrative Procedures Act, do not include a similar provision. Accordingly, it did not regard the petition as dismissed with prejudice. The employer’s motion was denied. The Superior Court agreed with the Board’s conclusions.

The Supreme Court affirmed that the Industrial Accident Board is not required to follow the Superior Court Rules of Civil Procedure in its proceedings. Whether to rely on or to consider court rules is within the Board’s discretion. No provision of the Industrial Accident Board Rules, the Workers’ Compensation Act or the Administrative Procedures Act indicates otherwise.

Additionally, the court agreed with and expanded on the collateral estoppel rulings below. The court explained that a consent judgment—such as the Board-approved Read-In Order terminating TTD as of February 7, 2020—generally cannot support claims of issue preclusion. Collateral estoppel only applies when the facts have been “actually litigated and determined” in the first case. The stipulation did not clearly manifest the parties’ intention to be bound by the employer’s allegation that “claimant’s disability had terminated as of February 7, 2020.” Accordingly, collateral estoppel did not bar the claimant from bringing the claim for a recurrence of total disability.

5.    The Superior Court affirmed an Industrial Accident Board decision that denied  a claimant’s Motion to Strike medical expert testimony regarding medical records produced for the first time after the claimant’s medical expert deposition. 
Trincia v. Dick’s Sporting Goods, 2024 WL 1110401 (Del. Super. March 14, 2024)

Ms. Trincia filed a Petition to Determine Compensation Due that alleged she injured her cervical spine and left shoulder in a work accident on September 23, 2020. The claimant’s primary care physician, Dr. Ivins, did not produce medical records in response to a subpoena request by the employer until four days before the hearing—after the claimant’s medical expert had testified by deposition. The employer immediately produced the records to the claimant. The next day, the employer’s medical expert testified and addressed Dr. Ivins’ records. The claimant filed a Motion to Strike portions of the employer’s expert’s testimony that referenced the records or, alternatively, to continue the hearing and afford the claimant’s expert the opportunity to review the records and offer additional testimony.

The Industrial Accident Board denied the claimant’s motion, holding the employer reasonably obtained and timely produced the records. It was not the employer’s fault the claimant did not have the records. Moreover, the claimant could not be surprised by her own medical records. The Board conducted the hearing on the claimant’s petition and concluded she was not credible and failed to meet her evidentiary burden. The Board emphasized that the claimant continued to work her normal hours for two weeks after the accident and never reported the accident during that time. She then requested off the work schedule because she did not feel well and not because of the work injury. Further, the claimant’s initial medical records after the accident did not document a work accident but were subsequently changed by undated notes from the providers without explanation.

On appeal, the claimant contended that neither party was at fault for the delay in production of Dr. Ivins’ medical records and it was unfair and prejudicial to the claimant to allow the employer’s expert to review and testify regarding the records without affording the claimant’s expert the same opportunity. The claimant was not surprised the records existed but was surprised by the contents of those records. For those reasons, the claimant argued the Board’s ruling constituted an abuse of discretion.

The Superior Court confirmed that the production of the records was a violation of the rule that requires production of pertinent documents 30 days prior to a hearing but that the records were not obtained surreptitiously. The claimant should have been aware of her own medical records. It was up to the claimant, not the employer, to make sure she had the documents necessary for her expert and her case. 

Additionally, the Board explained its reasons for why it did not find the claimant to be credible and denied the petition. The evidentiary ruling was not an abuse of discretion and there was substantial evidence in the record to support the Board’s conclusions. The decision was affirmed.

6.    The Superior Court affirmed a decision of the Industrial Accident Board that enforced a workers’ compensation settlement agreement and rejected a claimant’s attorney’s argument he is entitled to a common law “attorney’s charging lien,” which was not a term of the settlement.
Webb v. State of Delaware, 2024 WL 2077263 (Del. Super. May 9, 2024)

Mr. Webb was injured and missed time from work as a result of that injury. However, his workers’ compensation claim was denied, so he filed a petition with the Industrial Accident Board that sought acknowledgment of the accident, medical expense benefits and temporary total disability (TTD) benefits. Mr. Webb received short term disability (STD) benefits from his employer for the time he missed from work. The STD benefits were provided at no cost to the claimant and wholly funded by the employer through the Insurance Coverage Office (ICO). 

The employer eventually acknowledged the work accident as compensable and agreed to pay medical expenses and TTD of $15,556.00. The settlement offer from the employer specified that the TTD period overlapped with the STD period and there was a likely offset as the claimant could not receive both. Accordingly, the TTD check was to be held in an escrow account until the ICO calculated the recoupment amount owed for the STD benefits that were paid during the TTD period. Additionally, there was no separate attorney fee payable as part of the settlement. The claimant accepted the offer. The TTD check was issued and delivered to the claimant’s attorney, again with the explicit requirement that the funds were subject to offset by the STD benefits paid and should not be disbursed until the correct recoupment amount was determined.

The ICO determined the STD recoupment owed was $15,486.00—almost equivalent to the TTD payment. Instead of reimbursing the ICO per the settlement agreement, the claimant’s attorney sent the TTD check back and demanded an “attorney’s lien” on the TTD amount paid for one-third of the total recovery, the private contingent fee negotiated between the claimant and his attorney. The employer filed a motion with the Industrial Accident Board to enforce the settlement agreement. The Board held the settlement contract was clear, the claimant was to repay the STD recoupment amount once it was determined and no separate attorney fee was included as part of the agreement. The claimant was ordered to issue the check to the ICO. The claimant appealed.

On appeal, the claimant’s attorney contended the Board did not have jurisdiction to enforce the settlement agreement and the workers’ compensation insurance carrier did not have a right to negotiate the STD recoupment. The court held that the Board had authority to adjudicate the ICO’s right to set off its payments against payments awarded by the workers’ compensation carrier. The Industrial Accident Board has statutory authority to give effect to agreements between the parties, including provisions not directly related to the compensation, itself. Moreover, the court held the Industrial Accident Board’s authority to award attorney fees was limited by statute. The claimant’s attorney’s private contingent fee with Mr. Webb did not create a right to the fee from the ICO. The court would not void and rewrite the agreement. The claimant’s attorney was not entitled to the relief requested. The Industrial Accident Board’s decision was affirmed.

7.    The Delaware Superior Court affirmed a decision of the Industrial Accident Board and rejected a claimant’s argument on appeal that the Board’s decision to allow certain questioning from the employer’s attorney constituted a reversible abuse of discretion.
Rosenblum v. City of Wilmington, 2024 WL 3876630 (Del. Super. August 20, 2024)

On July 19, 2017, Mr. Rosenblum injured his right shoulder while working for the Wilmington Police Department, resulting in surgery. After the right shoulder surgery, the claimant began to experience pain in his left shoulder. He believed this pain was caused by overuse because he was unable to use the right arm normally while he recovered from surgery. The employer denied the left shoulder problem was causally related to the work accident. The case went before the Industrial Accident Board.

The Board denied that the left shoulder injury was causally related to the work accident. The Board reasoned there were inconsistencies between the medical records and Mr. Rosenblum’s testimony, which undermined his credibility. Additionally, the Board concluded the opinions of the employer’s medical expert, Dr. Gelman, were more credible than the claimant’s expert. During the hearing, it was revealed that Mr. Rosenblum told his treating surgeon that the pain started far earlier than what was documented in the medical records. However, the decision was appealed because the claimant took issue with the Board’s reliance on discovery to find Mr. Rosenblum not credible.

Specifically, on appeal, the claimant’s attorney requested a reversal of the Board’s decision because the employer’s attorney had asked questions of Mr. Rosenblum during the hearing with reference to medical records and failed to produce the documents. The claimant argued the questions were more akin to statements made by the employer’s attorney that were unsupported and did not afford the claimant an opportunity to confirm the accuracy of the questions. The argument was that the questions and resultant testimony violated Delaware Rules of Evidence 612 and 613, which concern what documents need to be shown to a witness or attorney upon request. The employer argued there was no objection during the hearing, so the argument was waived for appeal. Moreover, even if some of the questioning was precluded, there was substantial evidence in the record, including the expert credibility determination to support the decision.

The Superior Court agreed that attorney statements are not testimony and that the information the Board heard in the questions was likely not admissible in Superior Court. However, Industrial Accident Board Rule 16(B) expressly permits the Board to disregard customary rules of evidence so long as it does not amount to an abuse of discretion. There was no abuse of discretion in this case, and there was competent testimony from the employer’s expert witness to support the decision to deny the claim. The appeal was denied.

8.    Workers’ compensation trends.

The Industrial Accident Board has repeatedly stressed the importance of employers completing and filing timely First Reports of Injury (FROI). Failure to do so can result in sanctions and delays in litigation. The Board will not move forward with petitions until it receives a completed FROI to document the work accident. The Workers’ Compensation Fund continues to be aggressive with reimbursement requests and scrutiny of continuance requests that result in increased Fund payments. There was dialogue from the Department of Labor regarding an exodus of providers from the workers’ compensation system. This is consistent with the statistics of the 2024 annual report referenced below, which reflect a significant decrease in certified providers. The expectation is that this trend will continue.

9.    New workers’ compensation rates.

The Department of Labor announced that the new workers’ compensation rates effective July 1, 2024, establish an average weekly wage of $1,328.01. Accordingly, the maximum weekly compensation rate is $885.34 and the minimum weekly compensation rate is $295.12.

10.    Statistics from the Department of Labor.

The 26th Annual Report from the Department of Labor is available on the State’s website and provides updates, data and information that cover the year 2023.

Of note, the average dispositional speed from the filing of a petition to the issuance of a decision was reduced for a third consecutive year, despite a deficit in Hearing Officer staffing. The overall reduction in time is 24% since 2020. Utilization Review requests decreased again, this time by 10% in 2023 compared to 2022. Approximately 78.75% of those requests resulted in an appeal to the Industrial Accident Board, which was an increase from 2022. Chronic pain treatment continues to represent the most challenged treatment modality. In 2023, there were 1,845 active certified providers in Delaware, which represented a 13.14% decrease from 2022. More petitions were filed for the first time since 2018, although the amount of hearings decreased slightly. There was a slight decrease in commutation settlements reviewed from the prior year. Five-year cumulative statistics on appeals indicates the Industrial Accident Board has rendered 1,375 decisions, 193 of which were appealed. Seventy-two decisions were affirmed, 22 were reversed or remanded, 82 were dismissed or withdrawn and 17 were pending decision at the time of the report. 

---

 

_{What’s Hot in Workers’ Comp, Vol. 28, No. 12, December 2024 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2023 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}