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Officer's meth-exposure claims untangled by appeals court

October 8, 2014

A police officer’s claim for medical care for a disability arising in part from toxic exposure to dismantling methamphetamine labs was rejected in a recent appeal, despite his reliance on a statute placing a duty on cities to provide for officers harmed on the job.

Cities say the Court of Appeals untangled a mess of statutes in ruling that the officer failed to exhaust his remedies through workers’ compensation before seeking relief under the injured-on-duty statute. The officer’s lawyer said the city’s workers’ comp carrier substituted its judgment for an earlier determination of the policeman’s disability.

The COA on Sept. 19 entered judgment in favor of the municipality in City of Mitchell v. Randy Phelix, 47A01-1402-PL-88, reversing a trial court judgment in Randy Phelix’s favor.

woods Woods

Jodie Woods, general counsel for the Indiana Association of Cities and Towns, said the court established order where multiple processes are available to police officers who are injured or sickened in the line of duty.

IACT filed an amicus brief on behalf of Mitchell, as did the Indiana Association of Municipal Lawyers.

“Knowing how these statutes interplay at all was an important decision for our interests and our involvement,” Woods said. “We also believe it was a case of first impression.”

The ruling established the process by which officers can proceed with claims arising from their duties.

“You go through the disability process, then you go through the workers’ comp process before you get to the hurt-on-duty statute,” she said. “Neither the employer nor the employees really knew how to intertwine all of these statutes, and for that reason we thought that case was important.”

The hurt-on-duty statute, I.C. 36-8-4-5, requires cities to pay for the care of officers who are injured or who contract an illness in the line of duty. Cities that bring officers’ hurt-on-duty claims under workers’ comp policies, though, may channel those claims through that process even after a determination of disability through the Professional Employees Retirement Fund, as was the case here.

Phelix claimed that diagnoses of diabetes, peripheral neuropathy, systolic hypertension and renal disease were due to exposure to toxic chemicals encountered in dismantling meth labs, and in 2008, he sought and obtained disability benefits through the Public Employees’ Retirement Fund.

Ultimately, PERF ruled Phelix had a Class 2 impairment with 20 percent disability, recognized as a job-related disability. He then asked the city to pay his medical expenses under the hurt-on-duty statute, but the city referred the claim to its workers’ comp insurer, which overruled the disability determination.

Phelix’s attorney, Edward J. Merchant of Ruckelshaus Kautzman Blackwell Bemis & Hasbrook in Indianapolis, said, “I find it hard to believe the insurance company would have any authority to reach a different conclusion.” So did the trial court.

Lawrence Circuit Special Judge E. Michael Hoff refused to grant declaratory judgment in favor of the city of Mitchell on Phelix’s claim for medical expenses. Among his findings, he wrote, “Since the City has a worker’s compensation policy, (Phelix) is limited to receiving the type of medical services that are provided by that policy. However, the administrators of that worker’s compensation policy do not have the authority to decide whether or not Randal Phelix has a disease arising out of his employment as a City of Mitchell police officer that is a covered Class 2 impairment, or that he has a 20% disability, as PERF already decided those issues.

“The court finds that the City has a clear obligation under Ind. Code § 36-8-4-5 to pay Mr. Phelix’s medical expenses. Purchasing a worker’s compensation policy did not end that obligation, although so long as the policy is paying Mr. Phelix’s medical expenses the City is not required to pay anything from the City’s general revenue. If the City’s worker’s compensation policy stops paying Mr. Phelix’s medical expenses related to his duty related disease, the City of Mitchell is obligated ... to pay those medical expenses,” the trial court ruled.

But the appeals panel found this interpretation to be error.

“Phelix argues that his benefits under the worker’s compensation policy were ‘denied and were therefore terminated before he was fully recovered.’ ... According to Phelix, the statutes ‘obligate the City to provide medical care to Mr. Phelix, regardless of the availability and denial’ by the worker’s compensation carrier.

“We disagree with Phelix’s interpretation,” Judge Michael Barnes wrote for the panel. “Once the City elected to utilize worker’s compensation under Indiana Code Section 22-3-2-2, Phelix was obligated to seek payment of his medical expenses under the (Worker’s Compensation Act) process. Phelix started the process but did not further pursue benefits after the worker’s compensation carrier denied his claim. Although he had the opportunity to do so, Phelix did not challenge the initial determination of the worker’s compensation carrier.

“We recognize the inconsistency here — PERF apparently determined that Phelix’s medical condition was at least in part a result of his employment, but the worker’s compensation carrier determined that his medical condition was not related to his employment. However, that inconsistency would have been better addressed by Phelix exhausting his administrative remedies in the worker’s compensation proceedings.”

merchant-edward-mug.jpg Merchant

Merchant said he and partners were considering a petition to seek transfer to the Indiana Supreme Court, but no decision had been made by IL deadline.

David Bailey, an attorney with Eilbacher Fletcher LLP in Fort Wayne, was one of two lawyers at the firm who prepared amicus briefs in the case. He said for cities that opt to include police officers in workers’ comp policies, “an officer has to look to workers’ comp and can’t come back to the hurt-on-duty statute” as a result of the opinion.

Professor Cynthia Baker, director of the Program on Law and State Government at Indiana University Robert H. McKinney School of Law, believes the appeals court got the decision right.

“The Court of Appeals mentions this is the first time they looked at this interplay between PERF and workers’ comp,” Baker said. “These rather elaborate administrative programs were created by the General Assembly and exist in part to keep that level of expertise within those discrete places where those decisions are made. … They create these crucibles of expertise where, in theory anyway, the benefit-seeker can go in a straight line and seek an answer.”

It’s a policy question, she said, whether there should be some priority or linkage between PERF and workers’ comp determinations of disability.

Bailey said the decision also protects municipalities, “particularly smaller ones, from potentially catastrophic costs of a hurt-on-duty officer.”•

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