Wednesday, December 11, 2013

Comp IS Complicated

Lawyers that do workers' compensation litigation are often looked down upon by their civil practicing brethren; the practice of workers' compensation law is viewed as "not real law" because of its administrative nature and limited scope of inquiry.

This is true notwithstanding that workers' compensation was the first specialty practice recognized by the California State Bar.

Of course we in the workers' compensation bar get good chuckles when our civil law kin attempt to play in our sand box as they negotiate with the rules of civil procedure ineffectively and get stymied by terms like maximum medical improvement, concepts like MPN, and the calculation of permanent disability indemnity.

So it would also come as no surprise that the civil courts likewise have difficulty understanding the principles and practice that comprise workers' compensation law.

In New York the state's highest court performed an unprecedented about face in recognizing that it had made an error in applying the doctrine of collateral estoppel from a workers' compensation case to a related civil case.

To the uninitiated, collateral estoppel stands for the concept that an issue litigated in one forum need not be re-litigated in another forum arising out of the same set of facts and circumstances. This doctrine was established for purposes of judicial economy.

Jose Verdugo was walking down a street to make a food delivery on Christmas Eve in 2003 when a four foot by eight foot sheet of plywood came dislodged from a construction site on the 50th Floor of a Manhattan skyscraper and landed on his head.


Verdugo received benefits for injuries to  his head, neck and back, as well as for post-traumatic stress disorder and depression.

The insurance carrier for Verdugo's employer moved to discontinue his benefits in December 2005, and an administrative law judge found that Verdugo had no disability from his accident after Jan. 24, 2006 and that he required no additional medical care after this date. 

Verdugo sought administrative review, but the Workers' Compensation Board Panel upheld the ALJ's ruling.

In the meantime, Verdugo had sued the building owner, Seven Thirty One Limited Partnership, in 2004.

Following the board's ruling in the work comp case Seven Thirty One argued that Verdugo could not recover any lost earnings or medical expenses after Jan. 24, 2006 in his personal injury action against it.

New York County Supreme Court Justice Carol R. Edmead agreed that the board's ruling provided a definitive determination that Verdugo's documented and continuing injuries were not proximately caused by the December 2003 accident.

The Appellate Division's 1st Department reversed Edmead in 2011, stating that the board's determination of the date that Verdugo's disability ended did not conclusively establish his disability for purposes of the personal injury action because the determination of the date his disability ended was a finding of "ultimate fact."

A finding of ultimate fact is a factual conclusion arrived at based upon the evidentiary facts in a case, and is imbued with policy considerations as well as the fact-finder's expertise. Under New York law, a finding of ultimate fact cannot serve as the basis for the application of the doctrine of collateral estoppel.

In February, the Court of Appeals reversed the Appellate Division.

Since the board had already evaluated Verdugo's wage loss, ability to work, and medical expenses after his injury, a majority of the high court said he could not litigate those issues anew in his personal injury action.

Judge Eugene Pigott was the lone dissent on the Court of Appeals. She said that since the comp proceedings and the civil action involved different inquiries and evidentiary standards, the outcome of Verdugo's comp case should not be controlling in the proceedings for his personal injury suit.

On rehearing the rest of the justices on the Court of Appeals agreed with Pigott.

And that makes perfect sense.

The workers' compensation hearing is very limited in its scope of review. There can be no jury trial in New York Workers' Compensation claims (and in most states), and the rules of evidence do not apply in comp in the same way as in civil proceedings.  

There are also time constraints on depositions and discovery in a workers' compensation claim that do not exist for tort actions.
Further, in comp, a worker's choice of medical providers is limited, and medical treatment guidelines dictate a provider's ability to treat a comp patient. Such restrictions are not imposed on tort plaintiffs in most cases.

The fact that the Court of Appeals reheard the case and also reversed itself is nearly unprecedented - this doesn't happen very often in any state.

And, frankly, it's a good thing as this case could have set bad precedent. 

The earlier Court of Appeals ruling could in fact jeopardize workers' compensation in New York because it would introduce a clear disincentive to file for benefits - losing the ability to seek appropriate civil redress from the ultimate tortfeasor.

The ruling is not a game changer in New York law, as the case is fact specific.

But it demonstrates that even the highest level of scholarly legal thought can get work comp wrong.

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