The Compendium - January 2023 Newsletter

Practice tip for carriers – request a BRC

A decision this month from the Court of Appeals in Corpus Christi may offer a practice tip for practitioners involved in disputes over the Division’s exclusive jurisdiction to adjudicate the issue of whether a worker was in the course and scope of employment. In The University of Texas Rio Grande Valley v. Oteka, the court held that the injured worker was not required to exhaust her administrative remedies with the Division before filing a personal injury lawsuit against her employer. In doing so, it distinguished similar but conflicting decisions in its sister courts of appeal.

The case began when Oteka, a UTRGV nursing professor, attended a graduation ceremony for UTRGV students at McAllen Convention Center and, as she was walking to her car after the ceremony, was struck by a vehicle driven by a UTRGV police officer. She sued UTRGV for negligence, and UTRGV asserted the exclusive remedy defense under the Texas Workers’ Compensation Act. Oteka, who did not file a claim for compensation with the Division, contended that she was not in the course and scope of her employment at the time of her injury. UTRGV filed a plea to the jurisdiction, asserting that the compensability determination, including the issue of whether Oteka was in the course and scope of her employment, is within the exclusive jurisdiction of the Division.

The court of appeals agreed with Oteka and held that the trial court had jurisdiction to decide the issue. The basis for its holding was its conclusion that Oteka’s suit was “not based on the ultimate question of whether she is eligible for workers’ compensation benefits.”

The court noted that the Houston and Austin courts of appeal had reached the opposite conclusion in cases with similar facts (In re Tyler Asphalt & Gravel Co., Inc. and In re Hellas Constr., Inc.). But it distinguished them, noting that in both of those cases the administrative process at the Division had been invoked by one of the parties and the courts of appeal held that because the administrative process had been invoked, the personal injury suits should be abated (not dismissed) pending the outcome of that process. The Corpus Christi court then said that because there was no collateral proceeding in which the Division was determining the compensability of Oteka’s injuries, the holdings in the Houston and Austin courts were “inapposite.”

The takeaway here may be that, where a party is challenging a trial court’s jurisdiction to adjudicate the issue of course and scope of employment and arguing that the Division has exclusive jurisdiction over that issue, that party may wish to initiate an administrative proceeding at the Division, by requesting a Benefit Review Conference, thereby allowing it to cite Tyler Asphalt and Hellas as authority and distinguish Oteka.

Un-Rea-liable evidence gets Crump-ed in Dallas Court of Appeals

After water damage to a University of Texas at Dallas building in February 2015 led to mold, which was remediated 3 months later, UT system employee Diane Bartek made an occupational disease claim for exposure to mold in her workplace. To support her claim for conditions such as “autoimmune nervous system dysfunction, immune deregulation, and toxic encephalopathy,” William Rea, M.D. produced a causation opinion which was based, in part, on an assumption that Bartek’s mold exposure lasted for 5 years and, in part, on a series of tests that were neither medically or scientifically recognized to support the claimed medical conditions. Neither a Texas Department of Insurance, Division of Workers’ Compensation (DWC) administrative law judge nor the Appeals Panel fell for the junk science. Despite objections to Dr. Rea’s testimony as based on clearly erroneous assumptions and unsound testing methods, a Dallas County jury was allowed to hear Dr. Rea’s causation evidence, and they found she sustained an occupational disease injury from continuous exposure to mold.

The UT System appealed to the Dallas Court of Appeals, arguing that the jury verdict was based on unreliable medical evidence and so there was legally and factually no evidence to support the trial court’s judgment. Bartek responded by arguing that Dr. Rea was her treating doctor and was, therefore, “empowered by the Texas Workers’ Compensation Act to provide a causation report.” Finding that Transcontinental Ins. Co v. Crump, 330 S. W.3d 211 (Tex. 2010), is not at all moldy, the Dallas Court of Appeals agreed with UT System for two reasons: 1) Dr. Rea’s opinion was based on an unreliable foundation; and 2) each of Dr. Rea’s testing methods were shown to be rejected by the scientific and medical communities. The court of appeals threw out the trial court judgment and rendered a take-nothing judgment in favor of UT System.

Copyright 2023, Stone Loughlin & Swanson, LLP

Trouble Seeing? Call an eye doctor, not a chiropractor.

On January 13, 2023, the Division fined chiropractor Poorvi Sandesara, D.C. $8,000.00 for treating an injured employee’s compensable eye injury. For those that don’t know or aren’t frequent readers of our newsletter, chiropractors are not the same as medical doctors. The Texas legislature has limited chiropractors’ scope of practice to the evaluation and treatment of the “biomechanical condition of the spine and musculoskeletal system.” Chiropractors are prohibited by law from performing surgery, giving injections, and prescribing drugs, among other things. However, the entrepreneurial spirit is alive and well in chiropractors and sometimes they push their scope of practice boundaries, to the detriment of injured employees. According to the Division’s consent order:

Failure to act within the scope of practice for a chiropractor is deceptive and harmful to injured employees, the public, and the Texas workers’ compensation system. This conduct directly interferes with the division’s goal of providing timely, appropriate, and high-quality medical care supporting restoration of the injured employee’s physical condition and earning capacity.

We couldn’t have put it better ourselves. This case also raises the obvious question of why someone would treat with a chiropractor for an eye injury. Did the injured employee not know better or did their attorney refer them to the chiropractor? It seems the goal in such cases is to stay off work longer rather than to get the best possible medical care. The Division’s actions in this case are in the best interests of injured employees and are to be commended. Next up on the Division’s agenda should be chiropractors treating injured employees with burn injuries which, believe it or not, we’ve also seen before.

With accomplices like these . . .

The Division recently entered into a consent order with the Langford, Wise, and Farahmand Law Firm through its manager and agent, claimant attorney Roger Farahmand.

Pursuant to the order, the law firm shall not seek payment of any attorney fee orders issued between July 1, 2017 and August 31, 2019 and shall not seek payment for representing any workers’ compensation participant for the next ten years. Notably, the order also requires Mr. Farahmand to testify against claimant attorney Leslie Casaubon:

Respondent, through its Manager agent Roger Arash Farahmand, must cooperate fully with the Travis County District Attorney's Office investigation and prosecution(s) of Leslie Casaubon and provide complete and truthful testimony when and if called upon to do so in any criminal proceeding.

As Paul Harvey would say, the rest of the story is that Roger Farahmand and Leslie Casaubon were both indicted for billing fraud in 2021: https://www.tdi.texas.gov/news/2021/dwc03262021.html.

Mr. Farahmand and Ms. Casaubon were indicted for engaging in organized criminal activity and securing the execution of a document by deception. The indictments against Ms. Casaubon and Mr. Farahmand allege that they caused data to be submitted to the Division’s attorney fee processing system “representing that services had been rendered by Roger Farahmand and James T. Langford when services were not rendered by Roger Farahmand and James T. Langford.”

The case against Mr. Farahmand was dismissed on December 29, 2022 for the reason that “[t]he defendant has been granted immunity in light of his testimony.” The case against Ms. Casaubon remains pending with a pre-trial hearing set for March 7, 2023. Mr. Farahmand will presumably be called to testify against her at trial if a plea agreement is not reached.

Did someone suggest bringing back extent of injury waiver?

For about a five-year spell, the Division’s Appeals Panel interpreted Labor Code section 409.021’s 60-day compensability deadline to mean that an insurance carrier could waive its right to raise an extent of injury dispute if it did not dispute a condition within 60 days from its initial notice. This waiver theory meant that the mere utterance of a diagnosis on a medical record or even a work status report obligated an insurance carrier to dispute the condition or waive its right to do so.

This waiver theory created a new dimension to CCH evidence: the injured employee had to identify the date the diagnosis was first mentioned and the insurance carrier had to show that it had conducted a “reasonable investigation” and disputed the diagnosis at its earliest opportunity. Extent of injury disputes frequently boiled down to mere words on a page, the adjuster’s ability to scrutinize each medical report, and a hearing officer’s opinion about what is a reasonable investigation. (See APD 060233).

What’s a reasonable investigation, you ask? Well, for a real rabbit hole analysis, the Appeals Panel once stated that “reasonable investigation with the claimant’s treating doctor would have disclosed a referral, and the referral doctor’s referral for diagnostic testing.” (See APD 081222).

Then, in 2009, the Texas Supreme Court in State Office of Risk Management v. Lawton found that the 60-day waiver in Labor Code section 409.021 should not apply to extent of injury disputes. That seemed to be waiver’s last breath.

That is, until November 2022, when House Bill 790 was filed before the 88th Legislative Session even began. House Bill 790 would create a statutory right to the extent of injury waiver and require every first designated doctor request to include a request for an extent of injury opinion, proposing changes to Texas Labor Code 409.021 and 408.0041.

Although this seems to be designed mostly for persons covered under Gov’t Code §§607.051 (first responders), HB 790 proposes to include that an insurance carrier who fails to comply with new subsection (a) (not just the part related to first responders) within 60 days waives its right to deny the extent of the specific injury claimed by the injured worker or “reasonably reflected” in a review of the injured worker’s medical records. We will provide an update if this gets past the committee.

Congratulations are in order

The Division just issued a list of the hardest working comp attorneys for 2022. Here are the top three claimant and top three carrier attorneys with the average number of hours worked per day assuming they worked every single day of the year, weekends and holidays included, and billed at the Division’s maximum allowable rate of $200 per hour:

Claimant Attorney Approved Fees Hours per day
Bill Abbott $958,162.50 13.13
Adam Henderson $939,700.00 12.87
Kim Wyatt $774,820.00 10.61

Carrier Attorney Approved Fees Hours per day
Dean Pappas $880,492.50 12.06
Jeremy Lunn $641,589.00 8.79
Mark Midkiff $509,600.30 6.98

Bill Abbott moved up to first place from number two in 2021 while Kim Wyatt dropped from first to third and Adam Henderson moved up one spot to number two for 2022. Mr. Henderson was indicted for billing fraud in 2021 along with Leslie Casaubon and Roger Farahmand (see story above). The indictment alleges that Mr. Henderson submitted bills for work he did not do from January 1, 2012 to January 31, 2019. The case remains pending and he has a pretrial hearing set for February 9, 2023. Dean Pappas was the number one carrier attorney again, making him the top carrier attorney five out of the last six years.

To view the amount of approved attorney’s fees for each of the top 100 Claimant and Carrier workers’ compensation attorneys for 2022, click the following link: Top 100 2022

Prior years can be viewed here: Top 100 2021, Top 100 2020, Top 100 2019, Top 100 2018, Top 2017

A case to watch

The 13th Court of Appeals heard oral argument on January 11th in Accident Fund v. Rodrigo Mendiola, Cause No. 13-21-00361-CV. Although there are several evidentiary issues in the carrier’s appeal, the primary issue is whether the “old law” standard for determining an injured workers’ entitlement to Lifetime Income Benefits (LIBs) can be applied to the “new law.” This case is of interest because it narrowly focuses on the applicability of the old law case of Travelers insurance Company v. Seabolt, 361 S.W. 2d 204, 206 (Tex.1962) to new law cases. The case squarely challenges the past practice of the agency and of the courts which until now have applied Seabolt without question. The trial court applied the Seabolt standard in awarding Mr. Mendiola LIBs rather than the express requirements of the current statute.

Texas Labor Code section 408.161(b) is the current law governing LIBs entitlement. In this case, Mr. Mendiola had to prove that he had lost one foot at or above the ankle, which he proved, and that he had lost one hand at or above the wrist, which Accident Fund argued that he could not prove. The standard of “total and permanent loss of use” of a body part under section 408.161 is now based on the specific impairment of the body part. It is an analysis of function. In contrast, the old law statute and the Seabolt standard were based on general disability and the injured worker’s ability to work using the body part. Under the old law standard, a worker could qualify for LIBs if he could show that the body part in question no longer had “any substantial utility as a member of the body,” or that the worker could not “procure and retain employment requiring the use of the body part.” The trial court ruled that he met that standard. But under section 408.161(b), in addition to having had a partial leg amputation, Mr. Mendiola had to prove that one of his hands was totally and permanently useless. Accident Fund’s argument brought to light through traditional means of statutory construction that it was legal error for the court to ignore the requirement under new law that Mr. Mendiola’s hand had to be proved totally useless in order for him to qualify for LIBs. Given that the worker testified that he could use his hand for many functions, some of which were compatible with work, Accident Fund argued he did not meet the statutory requirement.

The 13th Court will decide whether the plain and ordinary use of the phrase “total loss of use” should be applied as written to LIBs cases, or whether it is appropriate to expand the meaning of the term by grafting the Seabolt standard into the new law.

Austin court of appeals may be close to deciding fate of SIBs rule

The Third Court of Appeals in Austin has signaled that it may be on the verge of issuing its long-awaited decision in the challenge to the validity of the Division’s rule on Supplemental Income Benefits. The validity challenge, styled Texas Department of Insurance, Division of Workers’ Compensation v. Accident Fund Insurance Company of America and Texas Cotton Ginners’ Trust, has been at the court of appeals since February 12, 2021.

The case began when Accident Fund (represented by this firm) and TCGT filed petitions for declaratory relief in Travis County district court, challenging the validity of the SIBs rule. The carriers argued that the Division exceeded its rule-making authority because the rule is inconsistent with the Texas Workers’ Compensation Act – specifically, the rule permits a worker to qualify for SIBs even if the worker does not meet any of the three criteria for SIBs required by the Act. Travis County district judge Maya Guerra Gamble agreed with the carriers, held the rule invalid, and enjoined the Division from applying it. But the Division appealed, and the appeal has stayed the trial court’s ruling for almost two years.

In a letter this month, the court of appeals notified the parties that the cause is set for submission on briefs on February 1, 2023. That could mean that the court’s decision will issue on that date or soon thereafter.

Announcing a new SLS attorney!

Nancy Ippolito joins us this month, after almost 4 years as an assistant general counsel at the Texas Department of Insurance, Division of Workers’ Compensation. Prior to her work at the agency, Nancy handled workers’ compensation insurance defense for over 15 years in Austin, Texas. She has been board-certified in workers’ compensation law since 2009. According to the Texas Board of Legal Specialization, out of 110,000 licensed lawyers in Texas, only 7,150, or a mere 6.5% of all attorneys, are board-certified which requires passing a rigorous exam among other criteria. We’re excited that Nancy has joined the Firm and look forward to working with her and getting to know her better.

WORKERS' COMPENSATION UPDATE

January 2023