Wednesday, August 1, 2012

No 15% penalty for fund recovery

When an employer was liable for a 15% safety penalty the penalty did not apply to additional compensation  from the Second Injury Fund, according to the Missouri Supreme Court in Hornbeck v Spectra Painting Inc.  No SC 92116 (Mo. July 31, 2012), affirming a decision from the court of appeals.  Payment of such a penalty was inapplicable because it would penalize the employer for conditions it had no control and may deter employers from hiring workers with pre-existing disabilities.

The court  of appeals awarded $11,578.94 in penalties by enhancing the award based on compensation paid in the form of medical and indemnity benefits.   The Supreme Court indicated there was "no reason for this court to explore" what was meant by compensation because the issue was not a matter in controversy.   "Spectra’s counsel conceded at oral arguments that, if the penalty is owed, it should apply to the compensation monies that Spectra voluntarily paid to Hornbeck before the Commission’s decision."  The employer initially disputed whether any penalty applied but abandoned this issue.  Claimant had recovered in addition to benefits against the employer an award of 42.4 weeks of compensation from the second injury fund. 

The court noted the legal issue is whether the work injury was the prevailing factor in the medical condition and the disability and second issue is if the disputed treatment is reasonably required and flows from the a work injury.  The court considered the Commission's findings, in its totality, supported its conclusions but found some of its findings vague and suggested a greater emphasis on the "flows from" prong.  Tillotson v St. Joseph Medical Center, 437 S.W.3d 511 (Mo. App. 2011), which articulated this "flows from" prong, was issued after the Commission's award in Hornbeck.

The court declined to disturb credibility findings of the Commission finding claimant's expert, Dr. Volarich, was less credible despite several errors based on conflicting expert testimony.  Dr. Volarich found claimant totally disabled.  The court consolidated "numerous subpoints" and "allegations of error [that] overlap."  It found the credibility argument   "however, is not persuasive because it was the Commission’s prerogative to discount Dr. Volarich’s MMI testimony in favor of the three physicians whose medical opinions supported that Hornbeck reached MMI in April 2007."

Hon. Mary Russell
Atty:  Bobinette, McDonald, Schute

The Commission found the enhanced rate for a safety penalty violation did not apply against the second injury fund for a  PTD award.  Brandt v Cardinal Scale, 2012 Mo. WCLR Lexis 162  (August 29, 2012), following Hornbeck.