Insurance Law Hawaii

Fourth Circuit Adopts Strict Interpretation of Time Frame in Which to Apply for Benefts

   The claimant's request to modify her permanent partial disability award under the Longshore Harbor and Worker's Compensation Act (LHWCA) was ruled untimely since she waited several years after her initial compensation award.  See Wheeler v. Newprot News Shipbuilding and Dry Dock Co., 2011 U.S. App. LEXIS 2889 (4th Cir. Feb. 15, 2011).

   The claimant was injured in 1992.  She was awarded permanent partial disability compensation, as well as a period of temporary total disability compensation.  She later sought continuing permanent total disability compensation.  After the employer contested, the administrative law judge issued an order denying the claim for permanent total disability compensation.  The Benefits Review Board affirmed on September 12, 2003.  No further appeal was taken.

   After the 2003 decision, the employer continued to authorize and pay for regular medical treatment for the claimant's knees.  On September 13, 2007, claimant submitted a request for modification of her permanent partial disability award under Section 22 of the LHWCA, again seeking total disability benefits.  The ALJ rejected the request as untimely because it was not filed within one year "after the date of the last payment of some compensation" or "after the rejection of a claim," as required in Section 22.  Although the claim was submitted within one year of the employer's last payment of medical benefits, it was filed more than four years after the Board's last order in 2003 denying the claim for permanent total disability compensation.

   Section 22 allowed the Director to review a compensation case and issue a new compensation order terminating continuing, reinstating, increasing or decreasing the compensation "at any time prior to one year after the date of the last payment of compensation."  The issue before the Fourth Circuit was the meaning of the term "compensation."  If "compensation" included the payment of medical benefits, then the claim for modification was arguably timely.

   The court first noted that the plain language of Section 22 did not clearly indicate that "compensation" either included or excluded medical payments.  Therefore, the meaning of "compensation" in Section 22 was ambiguous. 

   The legislative history, however, showed that Congress's inclusion of the one-year limitations period was not accidental.  While Section 22 was intended to broaden the grounds on which an award could be modified, it also strictly limited the period in which a request to modify could be filed.  Therefore, the Section 22 limitation period could not be construed to limit its force.  Furthermore, the interpretation urged by the claimant would mean the statute of limitations could be extended indefinitely by seeking medical treatment related to a covered injury and getting paid, thereby triggering anew the one-year period.

   Consequently, the court concluded that interpreting "payment of compensation" in Section 22 to exclude an employer's payment of medical benefits was most harmonious with the purpose of the statute's limitations period and the Act as a whole.

   Thanks to may Damon Key blogging colleague, Mark Murakami  (www.hawaiioceanlaw.com), for sending this case down the hall.

Emotional Distress Claim Viable Despite Exclusive Remedy Provision of Workers' Compensation Act

   Today's post departs slightly from insurance coverage matters, but is related to a prior post discussing the pursuit of intentional torts against insurers administering claims under the Longshore Harbor and Workers Compensation Act ("LHWCA").  The prior post described an article authored by my blogging colleague, Mark Murakami (hawaiioceanlaw.com), and me, noting that an exclusive remedy provision in the LHWCA has not prevented some courts from recognizing insureds' claims for intentional torts.

   Consistent with this line of cases, the California Court of Appeal held that a claim for intentional infliction of emotional distress was not subject to the workers' compensation system.  See Blumenfeld v. Qualcomm, Inc., 2010 Cal. App. Unpub. LEXIS 7571 (Cal. Ct. App., Sept. 23, 2010). 

   The plaintiff filed a sexual harassment case, alleging a supervisor subjected her to unwelcome sexual comments, inappropriate touching, and battery.  The trial court granted Qualcomm's motion for summary judgment, determining the plaintiff failed to show the supervisor's conduct was unwelcome and that her claims were subject to the exclusive remedy of the workers compensation system.

   The Court of Appeal reversed, ruling that the plaintiff's evidence created a triable issue as to whether the supervisor's conduct was unwelcome.  Because her claim for harassment was viable, her cause of action for intentional infliction of emotional distress was not subject to the exclusivity provisions of the workers' compensation act.

Our LHWCA Article Appears in "Coverage"

   Our article, entitled "Getting Around LHWCA's Exclusive Remedy Roadblock - Employee's Claims Against Employer and Insurer for Intentional Torts," has been published by Coverage, a periodical circulated to members of the ABA's Section of Litigation, Insurance Coverage Litigation Committee.  My Damon Key blogging colleague, Mark Murakami (hawaiioceanlaw.com), and I teamed to author the article, addressing the pursuit of intentional torts in lieu of bad faith claims under the Longshore Harbor Workers Compensation Act.  The article is available here. 

Ninth Circuit Considers Timeliness of LHWCA Compensation Claim

   The Ninth Circuit covered a lot of ground in reviewing the Benefits Review Board's ("BRB") determination that the claimant was entitled to benefits in Hawaii Stevedores, Inc. v. Ogawa, 2010 U.S. App. LEXIS 12767(9th Cir. June 22, 2010).

   Ogawa was a storeroom maintenance clerk at the employer's marine terminal from 1977 to November 2002.  He enjoyed the work, but found it stressful.  He suffered a stroke in November 2002.  After six months of convalescing, Ogawa attempted to return to work.  In June 2003, Ogawa was medically retired. 

   Thereafter, believing that the job stress caused his high blood pressure and stroke, Ogawa filed a disability compensation claim under the Longshore Harbor and Workers Compensation Act.  After a hearing, the ALJ found Ogawa was temporarily disabled before March 15, 2005, and was permanently and totally disabled thereafter.  The BRB affirmed.

   On appeal, the employer asserted that the claim for compensation was untimely because it was not filed thirty days after the date of injury.  The Ninth Circuit noted that the LHWCA excused late notice where the employer was not prejudiced.  Here, the employer was aware of Ogawa's medical condition following the stroke because it had access to all of his medical records, his doctors, and Ogawa himself, who had submitted to five independent medical examinations over nearly four years.  Therefore, Ogawa's late notice was properly excused.

   Next, the court considered whether the employer had submitted substantial evidence that Ogawa's stroke did not arise in the course of his employment.  The LHWCA creates a presumption that a disabling injury is work-related and thus compensable.  This presumption may be invoked by the claimant upon a prima facie showing that: (1) he suffered a harm, and (2) a workplace condition could have caused the harm.  If the claimant successfully invokes the presumption at the first step, the employer may rebut the presumption at the second step by presenting evidence to sever the potential connection between he disability and work environment.  If the employer does so, the ALJ moves to the third step by weighing the evidence to determine whether the claimant has established the causal link between the injury and employment.

   Here, the ALJ mistakenly ignored the employer's evidence that the injury was not work related, giving more weight to Ogawa's evidence.  Although it was error for the ALJ to weigh the evidence and consider questions of credibility at the second step, it was harmless.  The ALJ's ultimate conclusion that the totality of the evidence showed a relationship between stressful work conditions and Ogawa's stroke was supported by substantial evidence. 

   Finally, the employer and Ogawa both argued that the ALJ erred in determining the date of Ogawa's maximum medical improvement (MMI), the date which triggers a change in the classification of a claimant's disability from temporary to permanent.  The ALJ set the MMI on March 14, 2005, two and a half years after the stroke.  The Ninth Circuit agreed that the ALJ's determination of the MMI was not supported by substantial evidence.  Although the ALJ expressed concern that the MMI testimony was speculative and unexplained, she did not take additional evidence on this point.

   Accordingly, the petition for review was granted in part on the issue of Ogawa's MMI date, but denied with respect to all other issues.

Policy Covers Insured In Third Party Claim by Longshoreman

   Note today's post [here] by my Damon Key colleague, Mark Murakami, regarding coverage for a claim related to the Longshore Harbor and Workers Compensation Act.  See Bayou Steel Corp. v. Evanston Ins. Co., No. 08-31206 (5th Cir. Nov. 10, 2009).  The policy excluded coverage for injuries imposed on the insured by contract with respect to claims made pursuant to the LHWCA.  Nevertheless, the insured facility owner was covered under the policy when sued by a stevedore who was injured while unloading a barge.  The stevedore's claims against a third party were not "pursuant to" the LHWCA.