Kathy Murphy v. Riverview Healthcare Ass’n and SFM Risk Solutions

Kathy Murphy v. Riverview Healthcare Ass’n and SFM Risk SolutionsNo. WC17-6088 (W.C.C.A. May 3, 2018).

Employee worked for Employer, Riverview Healthcare Association, and its predecessor, Hillcrest Nursing, since 1977. On a day the Employee was not scheduled to work, Friday, February 12, 2016, and woke up with pain in her left shoulder. She reported to her doctors that she completed repetitive overhead movements at work but did not have pain at the time. Employee completed physical therapy and had emergency surgery, a decompression and fusion of C7-T1 on February 26, 2016.

Employee filed FROI on March 17, 2016, claiming an injury at work on January 25, 2016. On March 18, 2016, the Employer and Insurer served notice of the Primary Liability, accepting the claim and began paying wage loss and medical expenses. Employee was subsequently diagnosed with complex regional pain syndrome (CRPS)/RSD in the left hand in June 2016 and additional surgery was recommended. Employee underwent an IME in which Dr. Deal concluded that she sustained an injury unrelated to her work for the Employer and her condition was instead a direct consequence of an underlying pre-existing degenerative disc disease. In the report, Dr. Deal opined that MMI would be reached one year post-op to the Feb. 26, 2012 surgery.

On October 26, 2016, Employer and Insurer filed a Petition to Discontinue benefits based upon defense of no primary liability and payment under a mistake of fact. On January 26, 2017, the Employer and Insurer filed a NOID on the basis of the MMI. The NOID and MMI issues were determined under a separate expedited hearing in March 2017 and the findings are not on appeal. Hearing on the Petition to Discontinue was held May 19, 2017. The Compensation Judge found that the record would not stay open because both side submitted recent medical reports and, accepting the opinion of Dr. Deal, found that the employee had not sustained a work-related injury.

The Employee argued on appeal that the Employer and Insurer were not entitled to raise the primary liability defense at the expedited hearing on the Petition to Discontinue. Citing Minnesota Supreme Court precedent in Kulenkamp v. Timesavers, Inc., the WCCA held that it is not constitutionally improper to consider a defense of primary liability in an expedited discontinuance hearing so long as the opposing party had reasonable notice, which the Employee had in this case.

The Employee also argued that the Employer and Insurer should be barred from raising the defense in the discontinuance hearing because it was not raised in the hearing on the NOID in March. But, Minn. Stat. 176.238, subd. 6 limits the scope of an expedited hearing on discontinuance to the issues raised by the notice, thus primary liability could not by the NOID, which did not raise the primary liability defense. The Employee further contended that the issues of primary liability and MMI needed to be combined into one pleading. The WCCA held that nothing in the statute indicates that all potential basis for discontinuance must be combined into one claim. Additionally, the IME doctor’s opinion that MMI would be reached one year post-op of the February 2016 surgery was still several months in the future when the Employer and Insurer filed the Petition to Discontinue on the basis of primary liability. Therefore, both grounds to discontinue were not yet present when the Petition was filed.

The WCCA found no procedure basis to overturn the compensation judge’s determination of primary liability.

The Employee further argued, however, that even absent a procedural error in the manner in which the defense was raised, the Employer and Insurer should be estopped from raising the defendant because it would unduly prejudice the Employee under the specific facts of the case. Specifically, the Employee asserts that she sustained further injury consequential to the surgery and essentially, that she might have undergone the surgery but for the Employer and Insurer accepting liability for the injury and paying the medical expenses. The WCCA rejected this argument because the Employee underwent emergency surgery in February 2016, before she filed the FROI and before it was accepted by the Employer and Insurer and therefore there is no evidence that the Employee’s decision to undergo surgery was affected by the subsequent decision of the Employer and Insurer to retroactively cover the costs.

The Employee further argued prejudice by the limited scope of the hearing because it did not take into account the consequential injury claim into consideration. However, since a consequential injury claim is predicated on an underlying work injury, the WCCA found no prejudice.

The Employee also argued that there was prejudice because there had been extensive benefits paid in error. The WCCA found that there can hardly be prejudice to the Employee just because extensive benefits have been paid and does not constitute a departure from the general rule that an employer and insurer who initially pay benefits are not estopped from denying liability on the grounds of primary liability.

Lastly, the Employee argued that the Compensation Judge erred in allowing a supplementary report of the IME doctor into evidence because it was only provided a short time before the hearing without leaving the record open for the Employee to elicit a response from the Employee’s physicians. But, the record indicated that the recent medical report from ove of the employee’s experts was similarly admitted into evidence so the Comp. Judge’s decision not to leave the record open was not an abuse of discretion.

The Employee also appealed the foundation of the IME doctor’s opinion which was accepted by the Compensation Judge because the Employee asserted that the IME doctor did not properly categorize the Employee’s work and because the IME doctor did not have a complete picture of the number of hours that the Employee worked. The WCCA rejected these arguments and found that the Compensation Judge reasonably relied on the opinion of the IME doctor and affirmed the finding of no work injury.