Workers’ Compensation Appeals Board Awards Attorney Fees at Expedited Hearing. 
| February 5, 2018

Recently, the Tennessee Bureau of Workers’ Compensation Appeals Board (“Appeals Board”) in David Thompson v. Comcast Corporation, et al., awarded the employee attorneys’ fees due to the employer’s failure to authorize the recommended treatment for pain management. This is the first decision of the Workers’ Compensation Appeals Board awarding attorney fees since the statutory provision was implemented in July 2016.

           As a background, the employee suffered a neck and low back injury when he fell from a ladder at work. After placing the employee at maximum medical improvement, the treating physician referred the employee for pain management, which the employer declined to authorize based upon its beliefs regarding the reasonableness and necessity of the recommended treatment, its causal connection to the work injury, and the veracity of the employees complaints. Following an expedited hearing, the trial court found the employee was entitled to the recommended pain management treatment and awarded the employee attorneys’ fees due to the employer’s failure to authorize the recommended treatment. The employer appealed numerous rulings of the trial court, including that the employee was entitled to reasonable attorneys’ fees and expenses. 

In 2016, the General Assembly amended Tennessee Code Annotated section 50-6-

226 to authorize trial courts, in certain circumstances, to award attorneys’ fees and costs

[i]n addition to attorneys’ fees provided for in this section.” Tenn. Code Ann. § 50-6-

226(d)(1) (2017). Specifically, the amended statute provides as follows:

[T]he court of workers’ compensation claims may award reasonable attorneys’ fees and reasonable costs, including reasonable and necessary court reporter expenses and expert witness fees, for depositions and trials incurred when the employer:

. . . .

(B) Wrongfully denies a claim by filing a timely notice of denial, or fails to timely initiate any of the benefits to which the employee is entitled under this chapter, including medical benefits under § 50-6-204 or temporary or permanent benefits under § 50-6-207, if the workers’ compensation judge makes a finding that such benefits were owed at an expedited hearing or compensation hearing.

Tenn. Code Ann. § 50-6226(d)(1).

In Thompson, the trial court concluded that Employer “wrongfully denied [Employee’s] right to pain management” and that the word “wrongfully” applies to the phrase “fails to timely initiate any of the benefits to which the employee is entitled under this chapter.”

Upon review, the Appeals Board found Section 226(d)(1)(B) describes two scenarios supporting an award of attorneys’ fees and costs: “when the employer . . . [w]rongfully denies a claim by filing a timely notice of denial,” or “when the employer . . . fails to timely initiate any of the benefits to which the employee is entitled under this chapter . . . .” Thus, the Panel concluded that the wordwrongfully” modified only the first phrase, and an employer can be held liable for reasonable attorneys fees and costs when it “fails to timely initiate any of the benefits to which the employee is entitled under this chapter.”

             Significantly, given that the trial court in this case relied on the second scenario as the basis for its award of attorneysfees and costs, the Appeals Board did not resolve the meaning of the word “wrongful” and whether it requires a showing of bad faith or malice or, incorrect (“when it turns out the party enjoined had the right all along to do what it was enjoined from doing”).

The Appeals Board also addressed the timing of an award of attorneys’ fees at an expedited hearing stage. This issue was previously addressed this issue in Andrews v. Yates Services, LLC, No. 2016-05-0854, 2017 TN Wrk. Comp. App. Bd. LEXIS 35, at *6 (Tenn. Workers’ Comp. App. Bd. May 23, 2017), where we concluded that the statute “does not address when during the litigation process an award of attorney’s fee and expenses should be made.”  In the Andrews decision, the Appeals Board noted as follows:

We find no authority, and none has been suggested to us, requiring that determinations regarding attorney’s fees and expenses be made at an interlocutory stage of the case.  Given the twists and turns inherent in litigation, it seems the better practice is to resolve such issues after the litigation has run its course and the parties and the court no longer face uncertainties over future developments, as opposed to adjudicating disputes concerning attorney’s fees and expenses in piecemeal fashion as the case winds its way through the litigation process. . . . This is not to suggest that a determination of attorney’s fees and expenses may never be proper prior to the conclusion of a case, as each case must be evaluated based on the particular circumstances presented.

In agreeing with the trial court to award attorneys’ fees, the Appeals Board in Thompson stated “the fact that a trial judges determinations at an interlocutory hearing are subject to change at any time prior to the entry of a final compensation hearing order, a decision to award attorneys’ fees and expenses at an interlocutory stage of a case should be made only in extremely limited circumstances.”

          In Thompson, the Appeals Board chose to award reasonable attorneys’ fees and costs for a number of reasons: 1. Employer chose to deny Employee’s request for a panel of pain management specialists based on its own interpretation of the medical records from the authorized treating physician and despite the presumption of correctness afforded to the authorized treating physician; 2. Employer continued its denial of a panel even after the authorized treating physician responded to the inquiry from Employee’s counsel which made clear that the back and neck injury arose primarily out of and in the course of employment and that the referral for pain management was “reasonable and medically necessary as a result of the work injury;” 3. Employer maintained its denial of a panel even after obtaining the authorized treating physician’s deposition testimony during which the authorized treating physician reiterated the opinions expressed above; 4. Employer elected not to seek utilization review of the referral for pain management treatment, despite its use of utilization review for other treatment recommended by the authorized treating physician; 5.  Employer chose not to present an expert medical opinion from a physician who reviewed medical records; 6.  Employer elected not to seek an examination of Employee by a physician of its choice; 7. Employer did not request an independent medical examination by a physician selected by the trial court pursuant to Tennessee Code Annotated section 50-6-204(d)(9).

In short, the Appeals Board concluded the Thompson facts exemplified one of the extremely limited set of circumstances where an award of reasonable attorneys’ fees and costs is appropriate at the expedited hearing stage.

In a concurring opinion, Judge Marshall L. Davidson, III discussed other jurisdiction interpretations of the term “wrongful” in Tenn. Code Ann. § 50-6226(d)(1)(B), ranging from bad faith to incorrect. In sum, Judge Davidson stated that although “wrongfully,” as used in section 50-6-226(d)(1)(B), may be subject to different interpretations, one point is clear: given the way the statute is currently written, it was unnecessary for the trial court to apply any definition of wrongful to resolve the attorney’s fees and costs issue in this case.

Judge David F. Hensley, J. filed a dissenting opinion, in part. Judge Henley opined that although a workers’ compensation judge may properly make a finding at an expedited hearing that an employer failed to provide benefits in violation of section 50-6226(d)(1)(B), any award of attorneys fees or costs based on such finding must await a final hearing on the merits of the case. In short, based on the plain language of the Tennessee Workers’ Compensation Act and associated Regulations, he opined only temporary disability or medical benefits can be awarded at an expedited hearing, not attorney fees. Judge Hensley expressed that “expanding the authority of a workers’ compensation judge to award attorneys fees and costs at the expedited hearing stage of litigation must come from the legislature.

While Tenn. Code Ann. § 50-6226(d)(1) may come under further scrutiny in the coming months, after the Thompson decision it appears the trial court is within its discretion to award attorney fees in extremely limited circumstances” when an employer “fails to timely initiate any of the benefits to which the employee is entitled.”

Should you need any further information or have any questions on this case, please feel free to contact Connor Sestak with Morgan & Akins.

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