We’re here to help our clientele understand the latest developments in worker’s compensation. Last month, the Michigan Worker’s Compensation Disability Act underwent significant changes  which will have an impact on the handling of your ongoing Michigan worker’s compensation claims. In this comprehensive memo, we outline the 16 major changes to the Act and the practical application these changes will have on your handling of claims. Please do not hesitate to contact our office for further assistance determining the impact of this legislation on your claim management.

For additional reference, you are also welcome to download the full Amended_WC_Act, dated Dec. 19, 2011. (download size 2.5 MB). If you’d like to print out a copy of our summary, download this PDF: WC Act Changes Memo. Read the rest of this entry »

In Michigan, The Worker’s Disability Compensation Act provides a specific loss schedule for the loss of a particular finger, toe, hand, foot, eye or limb. Benefits are payable for the period of weeks prescribed in the Act regardless of whether the injured employee returns to work and regardless of whether they would be found to sustain a general disability as a result of the loss.

Prior to the enactment of Public Act 266 of 2011 Michigan courts had ruled that for specific loss claims under Section 361(2) the loss was to be measured in its uncorrected state. Further, the Michigan Supreme Court in Cain v Waste Mgmt, Inc, 465 Mich 509, 638 NW2d 98 (2002), appeal after remand, 472 Mich 236, 697 NW2d 130 (2005), held that specific loss benefits under Section 361(2) did not require actual amputation. It was enough for an employee to show they had lost the use of the limb involved.

The “uncorrected” standard was further clarified by Michigan Worker’s Compensation Appellate Commission in Trammel v Consumers Energy Co, 2009 ACO #126. The Commission in this case held that the claimant had demonstrated a specific loss of the leg, even though his injured knee had been repaired with a surgically inserted implant. As such, the Commission held that the “uncorrected” standard applies even when there is a permanent “correction” to the limb. As a result of the Trammel decision there was an influx of filings by claimants requesting specific loss benefits for the loss of a limb when they underwent knee replacement, shoulder replacement, and hip replacement surgeries.

Public Act 266 of 2011 revises the standard by which specific loss is determined under Section 361(2) of the Act. The new law requires that the effect of any internal joint replacement surgery, internal implant, or other similar medical procedures be considered in a determination of whether a specific loss had occurred. In essence, Public Act 266 of 2011 requires that any specific loss claim must be measured after any possible correction. For instance, in a petition filed by an employee who alleges the specific loss of a leg for an injury that requires a total knee replacement, the Worker’s Compensation Magistrate will have to evaluate that claim based on the condition of the employee’s knee after the corrective total knee replacement surgery. If the claimant maintained use of the leg after the surgery then claimant’s specific loss allegation would be denied.

The change to the specific loss standard of Section 361(2) of the Michigan Worker’s Compensation Disability Act is just one of many changes to the act incorporated into Public Act 266 of 2011. This bill was passed by both the Michigan House of Representatives and Senate, and was signed by Governor Snyder on December 19, 2011. The amendatory act will apply to injuries incurred on or after its effective date.

If you have any questions regarding this change to Michigan’s Worker’s Compensation Act or any of the other changes made under Public Act 266 of 2011 please do not hesitate to contact the Grzanka Grit McDondald law firm at 616-956-5559.

On behalf of our team at Grzanka Grit McDonald, I’d like to take a moment to extend our heartfelt thanks and warm wishes to our clientele.

May your travels be safe and time spent with loved ones joyous.

We look forward to helping you and your company usher in a prosperous 2012!

Sincerely,
Charles Grzanka

~ Defendants’ Alleged Scheme to Deny Workers’ Comp Doesn’t Give Rise to RICO Liability ~

Case Name: Jackson v Sedgwick Claims Management Services Inc., 24 MIWCLR 28 (E.D. Mich. 2010)

Ruling: The U.S. District Court, Eastern District of Michigan, granted the defendants’ motion to dismiss and denied the plaintiffs’ motion for leave to amend. Because the misconduct that the defendant’s allegedly agreed to commit does not amount to a RICO violation, the plaintiffs’ RICO conspiracy claim failed as a matter of law.

What it means: RICO does not provide a remedy for the fraudulent denial of benefits because an injured worker may not use RICO as an “end run” around the exclusive procedures and remedies prescribed by the WDCA. Alternatively, a violation of the administrative duties created by statute under the WDCA, even when fraudulent, does not amount to mail or wire fraud sufficient to give rise to RICO liability.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 4 April 9, 2010)

~ Insufficient Disability Analysis Stalls Truck Driver’s Open Award~

Case Name: Davis v Quickway Services., 24 MIWCLR 20 (Mich. W.C.A.C. 2010)

Ruling: The Commission remanded the magistrate’s open award to a truck driver for further analysis pursuant to Stokes. The plaintiff did not show what jobs he is qualified and trained to perform within the same salary range as his maximum wage earning capacity at the time of injury.

What it means: Where the record only reveals that the plaintiff cannot perform his last job, the Commission may order a remand for the magistrate to perform additional analysis to determine whether the plaintiff’s impairment meets the definition of disability set forth in MCL 418.304(4), Sington, and Stokes.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 3 March 26, 2010)

~ Commission Issues Remand to Grant Hearing on Merits for Defendant ~

Case Name: Dulic v Sweet Express, LLC,, 24 MIWCLR 23 (Mich. W.C.A.C. 2010)

Ruling: After remand of an open award for injuries sustained by the plaintiff in a work-related motor vehicle accident, the Commission again remanded to the magistrate to grant the defendant a hearing on the merits, including an opportunity to introduce evidence.

What it means: Although the Commission does not have a duty to decide Constitutional issues, it may issue a remand, as in this case, where the defendant has not been given a fair hearing or adequate notice of a hearing.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 3, March 26, 2010)

~ Inconsistencies Between Hypothetical Questions, Plaintiff’s Testimony Warrants Remand to Reconcile Differences ~

Case Name: Edlinger v. Delphi Automotive Corp, 24 MIWCLR 25 (Mich. W.C.A.C. 2010)

Ruling: Upon review of an open award to a factory worker for bilateral varicose veins, the Commission affirmed the magistrate’s disability analysis, but remanded for additional analysis on the issue of causation. On remand, the magistrate should try to reconcile the differences in the plaintiff’s trial testimony, the medical records, and the hypothetical questions posed to the medical experts.

What it means: Where significant differences exist between hypothetical questions posed to the witnesses and the plaintiff’s testimony about the work he actually performed, the Commission will probably remand for the magistrate to reconcile such differences.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 3, March 26, 2010)

~ Lack of Supporting Medical Testimony on Causation Nixes Continuing Benefits ~

Case Name: Easley v Sunrise Assisted Living Center, 24 MIWCLR 26 (Mich. W.C.A.C. 2010)

Ruling: The Commission modified the magistrate’s decision, terminating the plaintiff’s wage loss benefits as of March 26, 2006, as the plaintiff failed to present any evidence that her work-related injuries caused any disability beyond the date of her doctor’s examination.

What it means: A plaintiff’s lay testimony can establish her physical limitations. However, lay testimony does not trump medical opinion on causation. In this case, the magistrate has ignored the lack of a causal link between the plaintiff’s physical limitations and the alleged work injuries. Accordingly, the plaintiff failed to establish a work-related disability finding.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 3, March 26, 2010)

~ Deputy’s Failure to Establish Causal Connection Dooms His Retaliation Claim ~

Case Name: Belanger v. Oakland, County of, 24 MIWCLR 31 (E.D. Mich. 2009)

Ruling: The U.S. District Court, Eastern District of Michigan, granted the defendants’ motion for summary judgement against the plaintiff, who filed a complaint alleging 14th Amendment substantive due process violations, 1st Amendment retaliation, conspiracy, and workers’ compensation retaliation. A reasonable jury could not find a causal connection between the filing of a benefits claim and adverse action that predated both the incident and the claim.

What it means: The elements required to establish a retaliatory dischare claim are: (1) the plaintiff was engaged in a protected activity; (2) the defendant knew of the protected activity; (3) the defendant acted adversely to the plaintiff; and (4) the protected activity caused the adverse employment activity. Where the employee concedes the fact that less favorable work assignments began before he filed a workers’ compensation claim, the employee has failed to establish a causal connection between filing for workers’ compensation benefits and adverse action by the defendants.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 4 April 9, 2010)

~ Plaintiff’s Failure to Prove Good-Faith Job Search Nixes Claim for Wage Loss Benefits

Case Name: Coulter v. General Motors Corp., 24 MIWCLR 2 (Mich. W.C.A.C. 2010)
Ruling: After remand, the Commission reversed the Magistrate’s supplemental opinion awarding benefits.  The plaintiff did not establish that she was disabled pursuant to Stokes. What it means: If the plaintiff does not produces the testimony of a vocational expert to establish her qualifications and training, she must prove that she has conducted a good-faith, thorough job search or prove that her disability is so severe that she cannot as a practical manner seek work.  Failure to do this will prove fatal to a plaintiff’s claim for benefits.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 1 February 26, 2010)

~ Magistrate’s Insufficient Disability Analysis Mandates Remand

Case Name: Kleinhardt v Kleinhardt, 24 MIWCLR 16 (Mich. W.C.A.C. 2010)  Ruling: The Commission affirmed the Magistrate’s finding of an injury, but remanded for additional disability and wage loss analysis.  What it means: Where the magistrate fails to find the jobs that constitute the universe of employments suitable to the plaintiff’s qualifications and training that pay the maximum, and then fails to detail how the plaintiff proved that his work injury caused the inability to obtain those jobs, remand is necessary for additional disability analysis.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 2, March 12, 2010)

~ Plaintiff Fails to Prove Compensable Lower Back Injury ~Case Name: Vorcac v. Memorial Medical Center of West Michigan, 24 MIWCLR 17 (Mich. W.C.A.C. 2010)
Ruling: The Commission affirmed the Magistrate’s decision denying benefits to the plaintiff for an alleged work-related lower back injury.
What it means: Where a condition of the aging process is found, MCL 418.301(2) provides that such a condition will only be compensable if  contributed to or aggravated or accelerated by the employment in a significant manner.   In this case, although the magistrate did not specifically reference Section 301(2) and the significant manner test, he did a significant manner analysis weighing the various work related and non-work related factors that may have contributed to the plaintiff’s condition.
(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 2, March 12, 2010)
~ Plaintiff Fails to Connect Kienbock’s Disease to Work ~
  Case Name: Burns v. Forest River, Inc., 24 MIWCLR 18 (Mich. W.C.A.C. 2010)
  Ruling: The Commission affirmed the Magistrate’s decision denying benefits related to the plaintiff’s Kienbock’s disease in his right wrist and granting the defendant’s petition to stop payment of benefits because the plaintiff unreasonably refused surgery.
  What it means: Where the magistrate does not accept the plaintiff’s testimony because it is inconsistent with the medical histories and her previous testimony, and she rejected plaintiff’s surgeon’s testimony because the doctor admitted that medical experts have not found an etiological basis for Kienbock’s disease, substantial evidence supported the magistrate’s decision denying benefits for the plaintiff’s condition.
(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 2, March 12, 2010)

The following link is an article written by Chief Magistrate Murray Gorchow in which he discusses some of the issues with conditional payment/MSA set aside trusts as well as his position regarding bifurcated redemptions.

magistrate-gorchow-article.doc

Governor Granholm has signed new legislation amending Section 845 of the Michigan Worker’s Disability Compensation Act (WDCA).  This legislation became effective on January 13, 2009.  Prior to this amendment, Section 845 provided the following:

Sec. 845.  The bureau shall have jurisdiction over all controversies arising out of injuries suffered outside this state where the injured employee is a resident of this state at the time of injury and the contract of hire was made in this state.  Such employee or his dependents shall be entitled to compensation and other benefits provided by this act.

Following the amendment, Section 845 now provides the following for Applications for Mediation or Hearing filed on or after January 13, 2009:

Sec. 845. The worker’s compensation agency shall have jurisdiction over all controversies arising out of injuries suffered outside this state if the injured employee is employed by an employer subject to this act and if either the employee is a resident of this state at the time of injury or the contract of hire was made in this state. The employee or his or her dependents shall be entitled to the compensation and other benefits provided by this act. [emphasis added].

On its face, this amendment adds a requirement of having the Claimant’s employer being subject to the act, but, by replacing the word “and” with “either” the amendment makes it easier for Claimant’s to assert jurisdiction in Michigan.  In other words, prior to the amendment, those Claimant’s employed by Michigan-based companies who were injured out-of-state, normally qualified for workers’ compensation benefits under the law of the state in which they were injured.

The amendment to the Section 845 of the WDCA makes it easier for such Claimants to also qualify for Michigan statutory workers’ compensation benefits. Under the amended Section 845, a Claimant may elect to receive benefits from one or both states.

However, it should be underscored that Michigan law provides that a Michigan-based employer is entitled to a credit for those benefits received from another state against the benefits a Claimant may receive under Michigan law.

In effect, the amendment to Section 845, supercedes the Michigan Supreme Court’s ruling in Karaczewski v Farbman Stein & Co 478 Mich 28 (2007).  In Karaczewski, the Court held that the WDCA should be strictly construed to require that a Claimant prove that the contract of hire was entered into in Michigan and that the employee was a resident of Michigan at the time of injury in order for the Claimant to recover worker’s compensation benefits from a Michigan employer.

A link to the actual executed legislation can be found at the following web address:
http://www.legislature.mi.gov/documents/2007-2008/publicact/pdf/2008-PA-0499.pdf

2009 Calculation Program
Version 10.0

Version 10.0 of the calculation program is now available. This includes rates for the year 2009. This is still a single user system. Please do not attempt to install in a networked environment and make accessible by more than one user, as both calculation and program errors will occur.  This application is also not supported in a Windows NT or Citrix environment. Click here  Calculation Program Help Manual to view the help manual which includes instructions on installing this program. It may be helpful to print these instructions before continuing. If you have a previous version of this program on your PC, it must be uninstalled first. Once you have printed and read the install instructions, click here setup.exe to download the new version to your computer. You MUST save this file to your hard drive and install it from there. The file size is almost 13MB, so it may take a few minutes depending upon the speed of your connection.  If you wish to install this program on more than one computer, you can save the setup.exe file to any external media (i.e., flash drive, CD, etc.).If you do not have internet access, you may obtain this program on CD-ROM. If you would like a copy, please send a letter to Sandra Adams at the Workers’ Compensation Agency, P.O. Box 30016, Lansing, Michigan 48909 . The letter must be accompanied by a padded, stamped ($1.65 worth of postage), self-addressed mailer at least 7″ x 9″ in size.

Brown v Cassens Transport Co., 6th Circuit Court of Appeals (Docket No. 05-2089, Opinion issued and recommended for publication on October 23, 2008)
In this important case relating to workers’ compensation in Michigan, the Plaintiffs were current or former employees of Cassens Transport, Inc. who submitted worker’s compensation claims to Cassens based on workplace injuries they had alleged to have each sustained. On June 22, 2004, the plaintiffs filed a complaint raising Racketeer Influenced and Corrupt Organization (RICO) claims and Intentional Infliction of Emotional Distress (IIED) claims against the defendants. In their complaint, the plaintiffs alleged that Cassens, which was self-insured for purposes of paying benefits under the Worker’s Disability Compensation Act (WDCA), contracted with Crawford & Company to serve as a claims adjuster for the worker’s compensation claims of Cassens’s employees. They further pleaded that Cassens, Crawford, and Dr. Saul Margules, as well as other “cut-off” doctors, engaged in a pattern of racketeering activity that denied the plaintiffs’ worker’s compensation claims. Specifically, the plaintiffs alleged that Cassens and Crawford deliberately selected and paid unqualified doctors, including Dr. Margules, to give fraudulent medical opinions that would support the denial of worker’s compensation benefits, and that defendants ignored other medical evidence in denying them benefits. The plaintiffs claimed that the defendants made fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation of 18 U.S.C. §§ 1341, 1343, which serve as the predicate acts for their RICO claims.  Id.

The district court granted the defendants’ motion to dismiss pursuant to Rule 12(b)(6) on July 15, 2005. The plaintiffs filed a timely appeal. A majority of the 6th Circuit panel affirmed the dismissal on the ground that plaintiffs failed to plead that they relied on misrepresentations by defendants. The U.S. Supreme Court, however, granted plaintiffs’ petition for a writ of certiorari, vacated the 6th Circuit’s judgment, and remanded the case to us for reconsideration in light of the decision in Bridge v Phoenix Bond & Indemnity Co., 128 S. Ct. 2131 (2008), which held unanimously that a civil-RICO plaintiff does not need to show that it detrimentally relied on the defendant’s alleged misrepresentations.
On remand, the 6th Circuit held:

(1)    Thirteen predicate acts with the same purpose (to reduce Cassens’s payment obligations towards worker’s compensation benefits by fraudulently denying worker’s compensation benefits to which the employees are lawfully entitled) constituted a pattern of racketeering activity for a RICO claim, regardless of whether injury to each worker independently consisted of a pattern of racketeering activity;

(2)    Relationship-plus-continuity standard for establishing pattern of racketeering activity was satisfied by allegations as each of the plaintiffs has also sufficiently pleaded that they were injured by the defendants’ “pattern of racketeering activity” under 18 U.S.C. §§ 1964(c) because the defendants’ fraud deprived the plaintiffs of worker’s compensation benefits and caused them to incur attorney fees and medical care expenses;

(3)    The injured workers were not required to plead or prove reliance on misrepresentations;

(4)    The worker’s allegations were sufficient to satisfy proximate causation requirement for civil RICO claim because the defendants’ fraudulent acts were a “substantial and foreseeable cause” of the injuries alleged by the plaintiffs: the deprivation of their worker’s compensation benefits and expenses for attorney fees and medical care;

(5)    The Michigan worker’s compensation statutes did not reverse preempt RICO under McCarran-Ferguson Act because RICO would not “invalidate, impair, or supersede” the WDCA or frustrate the goal of the state law to punish the improper denial of benefits if it was part of racketeering activity, and because worker’s compensation benefits are not a form of insurance; however

(6)    The denial of workers’ compensation benefits by the defendants was not sufficiently outrageous to support claim for intentional infliction of emotional distress.  Id.

In light of these holdings, the 6th Circuit Court of Appeals reversed the dismissal of plaintiffs’ RICO claims and remanded the case back to the district court for further proceedings consistent with the panel’s opinion. However, the Court affirmed the dismissal of the plaintiffs’ IIED claims.

In an effort to assist our clients, we have placed links here to locate specific litigation documents at the Michigan Workers’ Compensation Agency. Clicking on a link below will cause you to navigate away from this site briefly in order to open or download the PDF form from the WCA site. To ensure the most current versions of form, you may wish to visit WCA directly. (This link will open in a new window.)

-WC-104A (2/04) – Plaintiff’s Application for Mediation or Hearing

-WC-104B (4/06) – Health Care Services Application for Mediation or Hearing (fill-in form)

-WC-104C (4/05) – Defendant’s Application for Mediation or Hearing

-WC-105 (8/08) Work History, Work Qualifications & Training Disclosure Questionnaire (fill-in form)

-WC-113 (1/04) – Redemption Order (fill-in form)

-WC-113A (8/05) – Multiple Carrier Redemption Form (fill-in form)

-WC-115 (5/05) – Voluntary Payment Form (fill-in form)

-WC-119 (8/05) – Affidavit in Support of Redemption (settlement) Agreement (fill-in form)

-WC-251 (8/05) – Carrier’s Response (fill-in form)

-WC-262 (4/05) – Claim/Cross-Claim for Review (fill-in form)

-WC-508 (2/07) – Subpoena for Production of Records (and/or) Witness Subpoena (fill-in form)

-WC-544 (7-05) – Worker’s Settlement Statement (fill-in form)

-WC-556 (5/05) – Agreement to Redeem Liability (fill-in form)