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Court rules on workers' comp dispute

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The Indiana Court of Appeals reversed a finding that a company had acted in bad faith in denying workers' compensation benefits because there was a dispute over who should pay the benefits. The appellate court also encouraged employers to come to an early agreement to share treatment costs pending a liability determination to avoid a situation similar to the one in the instant case.

In Ag-One Co-Op and Trane v. James Andrew Scott, No. 93A02-0904-EX-298, James Andrew Scott, a former Trane employee who went to work for Ag-One, went without medical care or compensation from June 2004 until September 2006 because Trane and Ag-One Co-Op disputed who was responsible for his medical expenses. Scott hurt his shoulder in September 2002 while working for Trane and received workers' compensation benefits. He worked for Ag-One from March to May in 2004 and re-aggravated his shoulder injury. Scott filed an application for adjustment of claim against Trane; Trane asked that Ag-One be brought on as a party because it believed the company was liable for part of Scott's injuries.

In early 2006, a single hearing member of the Indiana Worker's Compensation Board and the full board found Trane, not Ag-One, to be responsible for Scott's medical care and expenses. The full board also allowed Scott 45 days to file a claim against Ag-One, which he did, alleging bad faith. The full board affirmed the single hearing member's decision that Ag-One acted in bad faith and should pay half the $5,000 in damages and $1,600 in attorney's fees.

The Court of Appeals found Borgman v. Sugar Creek Animal Hospital, 782 N.E.2d 993 (Ind. Ct. App. 2002), to be instructive in its finding that that there can be no bad faith in denying benefits if the employer didn't act improperly in denying benefits, wrote Judge Paul Mathias.

"While we share the Board's concern that Scott went without medical care while Trane and Ag-One disputed who was liable for Scott's worker's compensation benefits, we fail to see how Ag-One can be said to have acted in bad faith in denying Scott's claim for benefits when Ag-One was ultimately found not to be liable for such benefits," he wrote.

The appellate court cautioned that its decision shouldn't be interpreted as encouragement for multiple employers in disputes over liability to refuse payment while awaiting the Indiana Worker's Compensation Board's decision. It understood the board's frustration with Trane and Ag-One in refusing to cover Scott's benefits while awaiting the board's decision, and noted that if they had both paid something during the dispute, the company found not liable could be reimbursed from the other employer. The appellate court ordered the decision reversed and vacated.

"We encourage employers in like situations in the future to come to an early agreement to share treatment costs pending determination of which employer is fully or partially liable. Doing so could go far in facilitating settlement of the claim and will avoid liability for the type of bad faith determined by the Board in this case, a determination that will usually be upheld under our deferential standard of review," Judge Mathias wrote.

Judge Margret Robb concurred and wrote in a separate opinion in addition to vacating the order Ag-One pay damages to Scott, the board should enter an order determining Trane's responsibility for the entire $5,000 as bad faith damages.

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  1. Oh, the name calling was not name calling, it was merely social commentary making this point, which is on the minds of many, as an aside to the article's focus: https://answers.yahoo.com/question/index?qid=20100111082327AAmlmMa Or, if you prefer a local angle, I give you exhibit A in that analysis of viva la difference: http://fox59.com/2015/03/16/moed-appears-on-house-floor-says-hes-not-resigning/

  2. Too many attorneys take their position as a license to intimidate and threaten non attorneys in person and by mail. Did find it ironic that a reader moved to comment twice on this article could not complete a paragraph without resorting to insulting name calling (rethuglican) as a substitute for reasoned discussion. Some people will never get the point this action should have made.

  3. People have heard of Magna Carta, and not the Provisions of Oxford & Westminster. Not that anybody really cares. Today, it might be considered ethnic or racial bias to talk about the "Anglo Saxon common law." I don't even see the word English in the blurb above. Anyhow speaking of Edward I-- he was famously intolerant of diversity himself viz the Edict of Expulsion 1290. So all he did too like making parliament a permanent institution-- that all must be discredited. 100 years from now such commemorations will be in the dustbin of history.

  4. Oops, I meant discipline, not disciple. Interesting that those words share such a close relationship. We attorneys are to be disciples of the law, being disciplined to serve the law and its source, the constitutions. Do that, and the goals of Magna Carta are advanced. Do that not and Magna Carta is usurped. Do that not and you should be disciplined. Do that and you should be counted a good disciple. My experiences, once again, do not reveal a process that is adhering to the due process ideals of Magna Carta. Just the opposite, in fact. Braveheart's dying rebel (for a great cause) yell comes to mind.

  5. It is not a sign of the times that many Ind licensed attorneys (I am not) would fear writing what I wrote below, even if they had experiences to back it up. Let's take a minute to thank God for the brave Baron's who risked death by torture to tell the government that it was in the wrong. Today is a career ruination that whistleblowers risk. That is often brought on by denial of licenses or disciple for those who dare speak truth to power. Magna Carta says truth rules power, power too often claims that truth matters not, only Power. Fight such power for the good of our constitutional republics. If we lose them we have only bureaucratic tyranny to pass onto our children. Government attorneys, of all lawyers, should best realize this and work to see our patrimony preserved. I am now a government attorney (once again) in Kansas, and respecting the rule of law is my passion, first and foremost.

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