2017 annual workers compensation seminar · 11/3/2017 · erin fox, j.d., is general counsel for...

2017 Annual Workers’ Compensation Seminar

November 3, 2017 Embassy Suites, Lincoln, NE

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8:00 am Workers’ Compensation 101 (Optional) Dallas Jones, J.D., Baylor, Evnen, Curtiss, Grimit & Witt LLP

9:00 am Petition to Modify – To File or Not to File Jennifer Caswell, J.D., Baylor, Evnen, Curtiss, Grimit & Witt LLP

9:30 am Subrogation Resolution Update Ron Brown, J.D., Brown & Theis, LLP

9:45 am Break

10:00 am The Counsel for Discipline’s Advice for Workers’ Compensation Attorneys Mark Weber, J.D., Counsel for Discipline

11:00 am Mediating Workers’ Compensation Case Joe Grant, J.D., Prentiss Grant LLC

11:30 am Fees Brody Ockander, J.D., Rehm Bennett & Moore, PC LLO

12:00 pm Lunch (included with your registration)

12:45 pm Case Law Update Abigail Wenninghoff, J.D., Larson Kuper & Wenninghoff, PC, LLO

1:15 pm Summary Judgments Justin High, J.D., High & Younes, LLC

1:45 pm Court Developments in the Nebraska Workers’ Compensation Court Erin Fox, J.D., Nebraska Workers’ Compensation Court

2:15 pm Break

2:30 pm “Yes I Can…No I Can’t”: The Court’s Positions on Judicial Authority in Light of Ancillary and Limited Jurisdiction Paul Barta, J.D., Baylor, Evnen, Curtiss, Grimit & Witt LLP

3:00 pm Lump-Sum Settlement Approval Issues Brian Dales, J.D., Nebraska Workers’ Compensation Court

3:30 pm Networking Reception Sponsored by the NSBA’s Workers’ Compensation Section

The NSBA Workers’ Compensation Section presents

2017 Annual Workers’ Compensation SeminarFriday, November 3, 2017 • 8:00 am - 3:30 pm

Networking Reception to followEmbassy Suites, 1040 P St., Lincoln

**Also available for viewing via live webcast.**

*Nebraska MCLE #146969. 5.25 CLE hours. (Regular/live)*Nebraska MCLE #147426. 1 CLE ethics hour. (Regular/live) (Ethics hour with Mark Weber at 10:00 am)

*Nebraska MCLE #146967. 5.25 CLE hours. (Distance learning)*Nebraska MCLE #147423. 1 CLE ethics hour. (Distance learning) (Ethics hour with Mark Weber at 10:00 am)

*Iowa MCLE #272470. 6.25 CLE hours, including 1 hour ethics. (Regular/live)*Iowa MCLE # 272470. 1 CLE ethics hour. (Regular/live) (Ethics hour at 10:00 am)

*Iowa MCLE #272469. 6.25 CLE hours, including 1 hour ethics. (Distance learning)*Iowa #272469. 1 CLE ethics hour. (Distance learning) (Ethics hour at 10:00 am)

A block of rooms is available Nov. 2-3 at the Embassy Suites in Lincoln at the negotiated rate of $129 per night. The rooms will be held until Oct. 13. To reserve a room, call 402-474-1111 or visit http://bit.ly/2uizRnL.

Faculty Bios

Dallas Jones, J.D., Baylor, Evnen, Curtiss, Grimit & Witt LLP, is the firm’s former Managing Partner and

current Chair of the Workers' Compensation Practice Group. The focus of his practice is identifying

innovative ways to enable employers to navigate the overlap of workers’ compensation claims and the

myriad of employment laws that can create complications in the claims process. Mr. Jones received his

Juris Doctor from the University of Nebraska College of Law.

Jennifer Caswell, J.D., Baylor, Evnen, Curtiss, Grimit & Witt LLP, is a Partner of the firm in the Workers’

Compensation Practice Group. For over 17 years, Ms. Caswell has successfully defended Nebraska

workers’ compensation claims on behalf of employers both before the Nebraska Workers’

Compensation Court and the Nebraska Court of Appeals. Ms. Caswell received her Juris Doctor from

Creighton University School of Law.

Ron Brown, J.D., Brown & Theis, LLP, has more than 37 years of experience in workers’ compensation law, including 18 years of service as a judge of the Nebraska Workers’ Compensation Court. During his tenure, he served four years as Presiding Judge of the Court. Mr. Brown received his Juris Doctor from Creighton University School of Law.

John Steele, J.D., has been with the Counsel for Discipline since 1993. He has made numerous

presentations at bar, law firm and law school seminars. Mr. Steele received his Juris Doctor from

Creighton University School of Law.

Joe Grant, J.D., Prentiss Grant LLC, focuses his practice on mediation, workers’ compensation and civil

litigation. He received his Juris Doctor from the University of Nebraska College of Law.

Brody Ockander, J.D., Rehm Bennett & Moore, PC LLO, has extensive litigation experience who focuses

his current practice on worker’s compensation, personal injury, wrongful death and employment

discrimination or retaliation. Mr. Ockander received his Juris Doctor from the University of Nebraska

College of Law.

Abigail Wenninghoff, J.D., Larson Kuper & Wenninghoff, PC, LLO, focuses her practice on workers’

compensation and has litigated and obtained published decisions from the Nebraska Supreme Court and

the Nebraska Court of Appeals. She has provided training and educational seminars on Iowa and

Nebraska law to employers, supervisors, and HR representatives on cost reduction, liability reduction,

accident investigation, workplace policies and fraud. Ms. Wenninghoff received her Juris Doctor from

the University of Nebraska College of Law.

Justin High, J.D., High & Younes, LLC, has handled hundreds of cases in State and Federal Courts in

Nebraska and Iowa, including the Nebraska Court of Appeals and Supreme Court. Outside the

courtroom, he has presented at dozens of seminars educating clients and other attorneys on subjects

like Electronic Discovery, Workers’ Compensation, and Personal Injury. Mr. High received his Juris

Doctor from Creighton University School of Law.

Erin Fox, J.D., is General Counsel for Nebraska Workers’ Compensation Court. Previously she was in

private practice focusing on workers’ compensation defense. Before going into private practice, she had

worked for the Court serving as a staff attorney from 2006-2011, law clerk from 2004-2006, and judicial

assistant from 2002-2003. Ms. Fox received her Juris Doctor from the University of Nebraska College of

Law.

Liz Gianunzio is the Clerk of the Court for the Nebraska Workers’ Compensation Court. She’s been with

the court for over 10 years serving as Assistant Clerk from 2007-2008, Associate Clerk from 2008-2011,

Deputy Clerk from 2011-2014, and has been Clerk since May 2014. Since becoming Clerk, she

successfully lead the court through its first eFiling application and has been dedicated to improving

efficiencies for both court staff and the users of the adjudication section. Ms. Gianunzio is also a

member of the Supreme Court Technology Committee.

Paul Barta, Baylor, J.D., Evnen, Curtiss, Grimit & Witt LLP, specializes in workers’ compensation law,

advising clients in Nebraska and Iowa. He is experienced in handling the defense of workers’

compensation cases for clients ranging from local family-owned businesses to multi-national

corporations. Mr. Barta received his Juris Doctor from Creighton School of Law.

Brian Dales, J.D., is a staff attorney with the Nebraska Workers’ Compensation Court.

Workers’ Compensation 101 Dallas Jones, Esq.

Baylor, Evnen, Curtiss, Grimit & Witt LLP


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WORKERS’COMPENSATION101

ABAYLOREVNENPRESENTATION

Dallas D. Jones, Esq.Baylor Evnen Curtiss Grimit & Witt, LLP

Wells Fargo Center 1248 “O” Street, Suite 600

Lincoln, NE 68508(402) 475-1075

[email protected]

www.BaylorEvnen.com

THE COURT• 7 judges

• HQ in Lincoln– 1010 Lincoln Mall, Suite 101

• Venue– In county of Ax

• Video and teleconferencing of evidentiary hearings via stipulation

– In Lincoln if out of state Ax

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EMPLOYMENT RELATIONSHIP

• There must be a contract of hire, either express or implied

• Requires an employer and employee

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EMPLOYERS

• Traditional Employers– Government (not Federal)

– Private• One or more employees

• Agricultural Employers– Act applies if have 10 or more unrelated EEs

– Must give notice if fewer than 10 EEs or will be subject to Act

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EMPLOYERS

• Statutory Employers– An entity contracts with uninsured employer

– Liable for benefits of uninsured employer’s employee if the entity did not obtain proof of WC coverage

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EMPLOYEES

• Traditional Employees– Executive Officers

• Must elect (Opt in)

– Self-employed persons• Must elect (Opt in)

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EMPLOYEES

• Independent Contractors– 10 factors

– Control is most important

• Loaned employees– Joint liability for employers

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EMPLOYEES

• Casual Employees– Not working in regular trade, business,

profession of vocation of the employer

• Volunteers– Generally not covered

– But what is a volunteer?• Was there a contract, express or implied?

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EMPLOYEES

• Undocumented aliens– Are “employees” for purposes of workers’

compensation benefits• But are not entitled to vocational rehabilitation if

could have been placed with an employer but for his illegal status

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• Accidents• Occupational Diseases

COMPENSABLE EVENTS

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• Unexpected or unforeseen injury which occurs suddenly and violently, producing at the time objective symptoms of an injury.• Traditional Accidents

• Slips, trips, falls, etc.

• Repetitive/Cumulative Trauma• Gradual, insidious onset over time

ACCIDENT

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ACCIDENT

• Repetitive/Cumulative Trauma– The Issue:

• “Suddenly and violently”– Must occur at an identifiable point in time requiring the

employee to discontinue employment and seek medical treatment.

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ACCIDENT• Discontinue Employment

– Missed time from work—any amount is enough

– Working fewer hours?

– Alternative duty?

• Seek Medical Treatment– Any treatment is enough

– But what about “in-house” nurse?

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• Disease which are due to causes and conditions which are characteristic of and peculiar to a particular trade, occupation, process, or employment and

• Excludes all ordinary diseases of life to which the general public is exposed

OCCUPATIONAL DISEASES

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• “Characteristic of and Peculiar to” – Due to causes and conditions unique to

certain jobs• Examples:

– Lung diseases unique to grain dust

– Asbestosis, certain lung cancers and mesothelioma caused by asbestos exposure


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• Ordinary diseases of life– No statutory definition nor case law

guidance

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• Last Injurious Exposure Rule– Determines identity of liable defendant

– Injurious• “of the type that could cause the disease given

prolonged exposure.”

• Need not be proved to have been a material contributing cause of the disease

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• Date of Disability– Fixes AWW; accrual of Statute of Limitations

– When the disease results in diminution of employability or impairment of earning capacity

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• Cardiovascular Injuries– Strokes and Heart Attacks

• Legal Test– Work-related stress or exertion greater than that in non-

employment life of employee or any other person

• Medical Test– Employment contributed in material and substantial

degree to cause injury

SPECIAL RULES FOR CERTAIN INJURIES

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MENTAL INJURIES• Caused by or secondary to violence to the physical

structure of the body– “Physical-mental”, not “Mental-mental”

• Unless:

– First Responders or Frontline Employees exposed to stimuli that is:

• “Extraordinary and unusual” in comparison to normal conditions of their employment

• Not incidental to normal employee/employer relations

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“ARISING OUT OF” and “IN THE COURSE OF”

• Arising out of– Employment related risk gave rise to injury

• Risk may be minimal, e.g., bump in carpet, slight defect in floor

• But “everyday activities” such as bearing one’s weight while walking, or rising from a chair, or stepping out of a car, is not enough

• In the Course of– Time, place and circumstances of accident

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ARISING OUT OF AND IN THE COURSE OF—SPECIAL

RULES• Going to and Coming from Rule

– Not compensable, except:• Commercial traveler/dual purpose

• Personal comfort and convenience

• Special errand

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ARISING OUT OF AND IN THE COURS OF—SPECIAL RULES• More exceptions to Going to and Coming

from:– Employer supplied transportation

– Employer owned/controlled parking lot, strip mall common area, public lot where employee directed to park

– Public property between place directed to park and work

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CAUSATION

• Objective injuries– No expert testimony required

• Subjective injuries– Expert testimony required

• Definite and certain– “Maybe”, “could be”, “possibly”, “consistent with” are

insufficient

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CAUSATION

• Aggravations of pre-existing conditions are compensable, including the effects of the pre-existing condition

• Natural progression of a pre-existing condition is not compensable

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CAUSATION• A few suggestions . . .

– Aim higher than legal sufficiency• The art of persuasion

– You will lose without the opinion

– You may not win without the explanation

» Why, why, why

• Understand anatomy

• Understand the medicine

• Understand science

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NOTICE

• As soon as practicable after the happening thereof– Late notice precludes compensability

– No bright line test• 4 months too long

– Written notice not required

– Employer’s burden to inquire

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AFFIRMATIVE DEFENSES

• Statute of Limitations

• 2 years from the accident or occupational disease, or last payment

• Exceptions:– Material and substantial increase in incapacity

– Latent and progressive

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• Willful negligence– Reckless indifference to safety

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• Violation of Safety Rule– Employer has reasonable rule designed to

protect employees– Employee has actual notice of rule

– Employee understands danger of violation

– Employer enforces rule

– Employee has no bona fide excuse

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• Intoxication– Intoxication caused accident and injury

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• Non-cooperation with medical treatment– Must prove non-cooperation prevented

improvement, or made condition worse• Requires expert opinion as to what would have

happened but for non-cooperation– Practically very difficult to obtain

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• Apportionment – BAW injury

– Prior injury produced disability up to time of accident

– Prior injury produced disability after accident

– Employee compensated for prior disability

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AVERAGE WEEKLY WAGE

• Basis for all indemnity benefits– Usually based upon previous 26 weeks

• Tips normally included

• Bonuses normally included

• Overtime hours, not dollars, included

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AVERAGE WEEKLY WAGE

• Miscellaneous items not included unless value fixed by parties at time of hire

• E.g., housing, insurance

• Abnormally low weeks excluded

• Abnormally high weeks included

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TEMPORARY DISABILITY BENEFITS

• Temporary total disability (TTD)– Weekly rate = 2/3rds of AWW

• Subject to maximum rate– Changes annually

» No COLA

• Temporary partial disability– The old--2/3rds of loss wages due to injury

– The new--LOEC?

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PERMANENT DISABILITY BENEFITS

• Schedule Member Injuries

• Body as a Whole Injuries– Anything not on the schedule

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SCHEDULE MEMBER INJURIES

• Level of disability is nearly always function of medical impairment

• Schedule provides number of weeks to be paid– Rate = 2/3 x AWW

• Rate x % impairment x number weeks per schedule

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SCHEDULE MEMBER INJURIES

• Exceptions:– Two members in one accident

• PTD if total loss of use of both members

• 30% Rule– Two members injured in one accident

» Different extremities or same?

– Court has discretion to appoint counselor to assess LOEC

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BODY AS A WHOLE INJURIES

• Based upon loss of earning capacity– Rate = 2/3 x AWW x LOEC

• Rate x 300 weeks, less # weeks of TD paid

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LOSS OF EARNING CAPACITY

• No formula– Function of loss of access to labor market and

ability to earn wages

– Not synonymous with impairment

• Assessed by counselors, but judges may assess without counselor– Rebuttable presumption of correctness

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“STACKING”

• BAW and Schedule member injuries in one accident– Compensation based upon LOEC if LOEC

cannot reasonably be calculated without consideration of affects of scheduled injuries

• No separate recovery of scheduled injuries per schedule

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DEATH BENEFITS

• $10,000 funeral expenses

• Widow or widower entitled to 2/3rds AWW until death or remarriage– 2 year lump sum payment upon remarriage

• Children, step children entitled to benefits until 19, but if in school, until 25

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MEDICAL BENEFITS• Choice of physician

– Employee chooses if:• s/he or immediate family member have treated

with a physician

• Or if employer does not provide Form 50 after the accident

• No change of physician unless:– Agreement or order

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MEDICAL BENEFITS

• Unlimited

• Reasonable treatment

• Necessitated by injury

• Fee Schedule sets reimbursement rate– Hospitals, Medical Services (doctors, PTs,

etc.) and Implantable Devices

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MEDICAL BENEITS

• Managed Care– Reimbursement per Agreement

– Referrals must be into Plan

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VOCATIONAL REHABILITATION

• Goal is to return to suitable employment– Suitable employment = similar pay and

compatible with employee’s age, education, experience, aptitude

• Formal School, OJT, ESL, job placement

• TD during plan

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VOCATIONAL REHABILITATION

• Counselor agreed upon by parties, or if no agreement selected by Court

• Administered by VR division of Court

• Counselor Fees paid by Employer/carrier

• Tuition, books, mileage, fees paid by Fund

• Counselor must prepare plan

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OTHER “BENEFITS”

• Waiting Time Penalties

• Attorneys Fees

• Costs

• Interest

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WAITING TIME PENALTIES

– 50% of any indemnity benefit more than 30 days overdue, for which there is no reasonable controversy as to compensability

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ATTORNEYS FEES

• When a penalty is assessed

• When a medical benefit is more than 30 days overdue, and there is no reasonable controversy

• Unsuccessful employer appeal

• Successful employee appeal

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COSTS

• Awarded if an attorney’s fee is awarded– Costs of depositions admitted into evidence,

witness fees and mileage to attend hearing

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INTEREST

• Awarded if an attorney’s fee is awarded– Injuries prior to 8/30/15

• 14% interest

– Injuries 8/30/15 or later• 6% above bond investment yield as published by

Secretary of Treasury

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APPEALS

• Standard of Review:– Court acted without or in excess of power

– Decision procured by fraud

– Not sufficient competent evidence in record

– Findings of Fact do not Support decision• Not clearly wrong

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SUBROGATION• When employee recovers from liable third

party, and employer has paid benefits

• “Fair and equitable distribution” if not agreement– No formula

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SUBROGATION

• Fair and Equitable Distribution– Factors which may NOT be considered:

• “Made Whole” Doctrine

• Equitable Defenses

• Comparative Risk of Parties

• Collection of Premiums

• Participation in Third-Party Claim

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SETTLEMENT

• Lump Sum Settlements approved by the Court

• Partial settlements approved by the Court

• Releases

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LUMP SUM SETTLEMENTS APPROVED BY THE COURT

• Must be used if:– Pro se claimant

– Medicare has interest

– Medicaid not reimbursed

• Settlement application is very detailed, takes time for approval

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PARTIAL SETTLEMENT APPROVED BY THE COURT

• Process identical to LSS

• But are bringing finality to only limited issues

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RELEASES

• Employee must be represented

• Medicare cannot be an issue

• Medicaid must be repaid

• Must be in “conformity with the Act”

• Fast

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TRIAL TIPS AND TACTICS• From the plaintiff’s perspective:

– Know the judge

– Make sure you have causation evidence

– Know the facts

– Know what you want, and why you should get it

– Know why you’re offering what you’re offering

– Work hard

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TRIAL TIPS AND TACTICS• From the defendant’s perspective

– Know the judge

– Know your facts better than the other attorney

– Challenge causation

– Work hard

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THE END

Questions?

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WORKERS’ COMPENSATION 101 By:

Dallas D. Jones

WELLS FARGO CENTER

1248 “O” STREET, SUITE 600 LINCOLN, NEBRASKA 68508

PHONE: 402.475.1075 [email protected]

www.BaylorEvnen.com I. NEBRASKA WORKERS’ COMPENSATION COURT

A. Court

The Nebraska Workers' Compensation Court is composed of seven judges who are initially appointed by the governor and who then remain on the bench for successive six-year terms upon approval of the electorate.

B. Headquarters Four judges maintain offices at the Nebraska Workers’ Compensation Court in Lincoln and three judges maintain offices in the Hall of Justice in Omaha.

C. Trials

1. Venue Matters are to be heard in the county where the accident occurred. REV. STAT. §48-177. In cases where the injury occurred outside the state, the hearing will be held in Lincoln, Nebraska. NEB. REV. STAT. §48-186. Parties may stipulate to change venue to a different county. All nonevidentiary hearings may be heard telephonically or by video conferencing. And if the parties stipulate and the court agrees, evidentiary hearings may also be heard telephonically or by video conferencing. NEB. REV. STAT § 48-177.

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2. Rule of Evidence As a general rule, the Nebraska Workers' Compensation Court is not bound by the usual common-law or statutory rules of evidence. Neb.Rev.Stat. §§ 48-168(1) and 27-1101(4)(d); Sheridan v. Catering Mgmt., Inc., 252 Neb. 825, 566 N.W.2d 110 (1997).

D. Appeals

Any party may appeal the trial judge’s decision directly to the Nebraska Court of Appeals or attempt to bypass the Court of Appeals to the Supreme Court. The standard of review provides that a judgment, order, or award of the Workers' Compensation Court may be modified, reversed, or set aside only upon the grounds that (1) the compensation court acted without or in excess of its powers; (2) the judgment, order, or award was procured by fraud; (3) there is not sufficient competent evidence in the record to warrant the making of the order, judgment, or award; or (4) the findings of fact by the compensation court do not support the order or award.

E. Office of the Clerk of the Court It receives court filings, dockets cases, schedules hearings and motions, corresponds with the parties, issues opinions of the court, and provides administrative and secretarial support for the judges of the court.

II. COMPENSABILITY

A. Nebraska Jurisdiction

Per Neb. Rev. Stat. 48-115, the following four possibilities which confer jurisdiction to the Nebraska Workers’ Compensation Court are: 1. The contract of hire was entered into in the State of Nebraska. 2. The Accident occurred in or the Occupational Disease was contracted in Nebraska;

3. Employer doing Business in Nebraska;

The employer does business in Nebraska. The employer does not need to be resident employer. The full extent of the relationship between the injured individual’s accident and/or employment and the state of Nebraska is probably still a bit uncertain.

4. Principal Place of Business in Nebraska

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The employer’s principal place of business is in Nebraska.

B. Employment Relationship

1. There must be an employer.

a) Traditional Employers

The definition of “employer” for workers’ compensation purposes includes: (1) The state and every governmental agency created by it, or (2) every person, firm or corporation who is engaged in any trade, occupation, business or profession, and who has any person in service under any contract of hire. NEB. REV. STAT. §48-114.

The Nebraska Workers’ Compensation Act does not apply to railroad companies; or service performed by a worker who is a household domestic servant in a private residence. Under the revised statute, these employers may elect to be covered by the Act by procuring a policy of workers’ compensation insurance covering its employees.

b) Agricultural Employers

Section 48-106 exempts employers engaged in an “agricultural operation” from application of the Act. An “agricultural operation” involves (1) the cultivation of land for the production of agricultural crops, fruit or other horticultural products or (2) the ownership, keeping or feeding of animals for the production of livestock or livestock products. When dealing with “agricultural operations,” the Act does not apply to: (1) service performed by a worker when performed for an employer who is engaged in an agricultural operation and employs only related employees; (2) service performed by a worker when performed for an employer who is engaged in an agricultural operation and employs unrelated employees unless such service is performed for an employer who during any calendar year employs ten or more unrelated, full-time employees, whether in one or more locations, on each working day for thirteen calendar weeks, whether or not such weeks are consecutive, and; (3) service performed by a persons who is engaged in an agricultural operation, or performed by his or her related employees, when the service performed is (I) occasional and (ii) for another person who is engaged in an agricultural operation who has provided or will provide reciprocal or similar service. Similar to railroad companies and employers of household domestic servants, employers engaged in agricultural operations can elect to be covered by the Act by obtaining a policy of

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workers’ compensation insurance. However, if the employer elects to not obtain such insurance it must provide the employee, at the time of hire, written notice alerting the employee to the fact that he or she will not be covered under the Act. Section 48-106 provides specific language to be included in that written notice, and if exempt employers fail to provide this notice it will be subject to liability under the Act.

c) Statutory Employers

The question as to whether an employer is a “statutory employer” frequently arises in the context of construction projects, and common carrier/trucking situations. NEB. REV. STAT. §48-116.

An owner who employs an independent contractor to do work which is in the usual course of the business of the owner, and who fails to require the independent contractor to procure workers’ compensation insurance is liable as a “statutory employer” should one of the employees of the independent contractor become injured on the job. Franklin v. Pawley, 215 Neb. 624, 340 N.W.2d 156 (1983). The actual employer remains primarily liable and the statutory employer is secondarily liable and the statutory employer has a right to indemnity against the actual employer if it is forced to pay benefits. Duffy Bros. Const. Co., v. Pistone Builders, Inc., 207 Neb. 360, 299 N.W.2d 170 (1980).

d) Executive Officers

Executive officers of a corporation who own less than 25 percent of the common stock of the corporation and executive officers of a Nebraska nonprofit corporation who receive more than $1,000 per year in compensation are considered employees covered under the Act. NEB. REV. STAT. §48-115(9).

An officer who owns 25 percent or more of the stock, or an officer

of a non-profit corporation who receives less than $1,000 per year in compensation; are not considered employees under the Act, unless they make a formal election to do so. NEB. REV. STAT §48-115(9).

e) Self-Employed Persons

Self-employed persons can be considered “employees” as well as “employers” if they elect to be covered under the Act. NEB. REV. STAT. §48-115(10).

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f) Independent contractor/10 factor test To determine whether a worker is an employee or an independent

contractor, Nebraska looks to ten different factors. Generally, although it is not specifically stated in the case law, the amount of control that the purported employer exerts over the worker is considered the most important factor. The factors are: (i). Amount of control

(ii) Whether a worker is engaged in a distinct occupation or

business

(iii) Kind of occupation involved (iv) Skill required in the particular occupation

(v) Which party supplies the instrumentalities, tools or place of

work

(vi) Length of employment period

(vii) Method of payment

(viii) Whether the work is part of the regular business of the employer

(ix) Whether the parties believe they are creating an

employer/employee relationship

(x) Whether the employer is or is not in business

Larson v. Hometown Comm., 248 Neb. 942, 540 N.W.2d 339 (1995).

g) Loaned employee

Where the general employer (loaning employer) lends an employee to a special employer (borrowing employer) and:

(i) the employee has a contract of hire, express or

implied, with the special employer; (ii) the work being done is essentially that of the special

employer; and (iii) the special employer has the right to control the details of

the work.

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If the control of the person’s duties remains with the loaning employer, then that is the employer who is primarily responsible in the event of an accident, but both employers remain liable for workers’ compensation benefits. B&C Excavating Co. v. Hiner, 207 Neb. 248, 298 N.W.2d 155 (1980).

h) Casual Employee

An employee who is not performing work in the regular trade, business, profession or vocation of the employer is a casual employee. A casual employee is not entitled to workers’ compensation benefits from the casual employer. Sentor v. City of Lincoln, 124 Neb. 403, 246 N.W. 924 (1933).

i) Volunteers

Volunteers are generally not afforded coverage under the Nebraska Workers’ Compensation Act. Levander v. Benevolent & Protective Order of Elks, 257 Neb. 283, 596 N.W.2d 705 (1999). Statutory exceptions include: Volunteer firefighters who are members of any fire department which is organized under the laws of the State of Nebraska; ambulance drivers and attendants; and out-of-hospital emergency care providers who are members of an emergency medical service for any county, city, village, rural or suburban fire protection district, nonprofit corporation, or any combination of such entities under the authority of NEB. REV. STAT. §13-303. NEB. REV. STAT. §48-115.

C. Compensable events When personal injury is caused by accident or occupational disease, arising out of and in the course of his or her employment, such employees shall receive compensation therefore from his or her employer if the employee was not willfully negligent at the time of receiving such injury. NEB. REV. STAT. §48-101.

1. Accident An “accident” is defined as an unexpected or unforeseen injury which occurs suddenly and violently, producing at the time objective symptoms of an injury. NEB. REV. STAT. §48-151(2). This obviously includes single events causing injury such as slips, trips, falls, lifting incidents, etc. But the compensability of a repetitive trauma injury is also tested under the statutory definition of accident.

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In repetitive or cumulative trauma cases the key issue is whether the “suddenly and violently” element of the definition of “accident” has been met. In Dawes v. Wittrock Sandblasting & Painting, 266 Neb. 526, 667 N.W.2d 167 (2003) the Nebraska Supreme Court held that “‘suddenly and violently’ does not mean instantaneously and with force, but, rather, the element is satisfied if the injury occurs at an identifiable point in time requiring the employee to discontinue employment and seek medical treatment.” Id. at 556, 667 N.W.2d at 193. In other words, an accident in the context of repetitive or cumulative trauma does not occur until, as a result of the injury, the employee has met both elements of the definition of “suddenly and violently”—“discontinued employment” and “sought medical treatment”. Risor v. Nebraska Boiler, 277 Neb. 679, 765 N.W.2d 170, (2009). So how are the terms “discontinue employment” and “seek medical care” defined?

a) Discontinuation of Employment

There is no clear definition of the term “discontinue employment”. Does “discontinue employment” mean actually being gone from work, or just changing the employee’s job duties, or reducing the amount of hours the employee works? In Sandel v. Packaging Company of America, 317 N.W.2d 910, 211 Neb. 149 (1982), the employee “was unable, because of pain and swelling, to continue her employment, and from that moment on was unemployed”, constituting a discontinuation of employment. In Jordon v. Morrill County, 603 N.W.2d 411, 258 Neb. 380 (1999), the court affirmed a finding that the employee had not discontinued employment where the employee never “missed time from work”. But the court also instructed that to prove a “discontinuance of employment”, the employee must be no longer able to “perform the work required.” In Owen v. American Hydraulics, 606 N.W.2d 470, 258 Neb. 881 (2000), the Supreme Court affirmed the trial judge’s finding that the employee had discontinued employment because he “lost time from at work” when he sought medical care, and when he returned to work he “never resumed his duties” of his regular job “and was instead transferred to a position requiring less strenuous activity.” In Risor v. Nebraska Boiler, 277 Neb. 679, 765 N.W.2d 170, (2009), the employer’s attempts to accommodate the claimant’s hearing loss by writing notes, using hand signals, and mouthing words for the claimant to lipread did not constitute a discontinuance of employment as the employer did not attempt to transfer the claimant to different duties because of his injuries—hearing loss; he continued performing the same duties. In Potter v. McCulla, 851 N.W.2d 94, 288 Neb. 741 (2014), the Supreme Court explained that “the requirement in our test that the employee miss or discontinue employment is reasonably related to a determination of the time when the injury manifests itself in disability”, and “an employee's disability is determined by the employee's diminution of employability or impairment of earning power or earning capacity.” And the diminution of employability

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“reasonably can only occur when an employee’s injury interferes with his or her ability to perform the requirements of the job.” Id. at 751, 851 N.W.2d at 103.

b) Seek Medical Treatment

Nebraska appellate courts have not provided a definitive definition of the term “seek medical care.” Does visiting a company nurse within the employer’s location as a result of pain, to obtain bandages or ice, constitute “seeking medical treatment”? Or does the employee actually have to leave the premises for medical care in order to meet this requirement? The ultimate answer may eventually depend on the circumstances in which the question arises. If the question is posed in the context of a statute of limitation case where a finding that obtaining care from a plant nurse means the accident occurred early enough to bar the claim, those facts will probably not constitute “seeking medical care”. But if the question is posed in the context of a case where the only evidence of “seeking medical care” is the employee obtaining care from a plant nurse, those facts will probably constitute “seeking medical care”. We shall see.

2. Occupational disease

“Occupational disease means only a disease which is due to causes and conditions which characteristic and peculiar to the particular trade, occupation, process, or employment and excludes all ordinary diseases of life to which the general public is exposed.” Neb. Rev. Stat. §48-151.

a) Characteristic and Peculiar to

An occupational disease must be a natural incident of a particular occupation and must attach to that occupation a hazard which distinguishes it from the usual run of occupation and which is in excess of that attending employment in general . . . The statute does not require that the disease be one which originates exclusively from the employment. The statute means that the conditions of the employment must result in a hazard which distinguishes it in character from employment generally.” Ritter v. Hawkeye-Security Insurance Co., 178 Neb. 792,795, 135 N.W.2d 470, 472 (1965). See also, Miller v. Goodyear Tire & Rubber Co., 239 Neb. 1014, 480 N.W.2d 162 (1992).

b) Ordinary Diseases of Life

Whether the exclusion of “ordinary diseases of life” has any meaningful application to the compensability analysis is questionable. There are no appellate decisions which address this language. Presumably, a common cold or the flu would fall into this category and be excluded as a

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compensable condition. But if there were persuasive causation testimony that but for the conditions of the employee’s employment, the employee would not have contracted that condition, such a condition might indeed be considered compensable.

c) Last Injurious Exposure Rule

In many occupational disease cases, the employee alleges multiple exposures with multiple employers, spanning many years and sometimes implicating the coverage of multiple insurers. The so-called “last injurious exposure rule” is the vehicle by which the liability of the employer and carrier responsible for the payment of benefits is determined.

Under this rule, liability will be assigned to the employer for whom the employee was working , or the insurance carrier covering the risk, at the time that the last injurious exposure occurred. An exposure is “injurious” if it is of the type which could cause the disease, given prolonged exposure and once the requirement of some contributing factor has been met, courts will not go on to weigh the relative amount of duration or the exposure under various employers. Osteen v. A.C. and S., Inc., 209 Neb. 282, 288, 307 N.W.2d 514, 520 (1981).

d) Date of Disability

Fixes the rate of benefits and the cause of action accrues for purposes of the statute of limitation. The court will determine the date of disability (i.e. the date the employee was injured) by determining when the accumulated effects of the substance manifested in disability.

3. Special Rules regarding certain Injuries--

a) Cardiovascular Injuries

Nebraska has a special set of rules for cases in which an employee suffers a cardiovascular injury, such as heart attack or stroke. An employee must prove that both the legal and medical cause of his condition was his employment. Smith v. Fremont Contract Carriers, 218 Neb. 652, 358 N.W.2d 211 (1984); Leitz v. Roberts Dairy, 237 Neb. 235, 465 N.W.2d 601 (1991).

Legal Test: An employee must prove that he suffered some work-related stress

or exertion which is greater than that in the ordinary non-employment life of the employee or any other person.

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Medical Test: An employee has the burden of proof to show by a preponderance of the evidence, through expert medical testimony, that the employee’s employment contributed in some material and substantial degree to cause the employee’s injury.

b) Emotional/Psychological Injuries Violence to the physical structure of the body which causes mental stress is compensable in Nebraska. An employee’s psychiatric problems or depression may be compensable if they are found to be the product of a physical work-related injury. However, mental stress at work which produces a mental or physical injury is not compensable. Zach v. Nebraska State Patrol, 273 Neb. 1, 727 N.W.2d 206 (2007); Dyer v. Hasting Industries, 252 Neb. 361, 562 N.W.2d 248 (1997). Likewise, a psychological injury resulting solely from the process of workers’ compensation or litigation is not proximately caused by the underlying accident. Sweeney v. Kerstens & Lee Inc., 268 Neb. 752 (2004). The exception to the rule requiring violence to the physical structure of the body for a mental injury to be compensable is when a “first responder” or “frontline state employee” is able to prove that the circumstances causing the mental injury or illness were “extraordinary and unusual” in comparison to the normal conditions of the employee’s particular employment, and those circumstances caused a mental injury or illness. A “First Responder” is a deputy sheriff, a police officer, an officer of the Nebraska State Patrol, a volunteer or paid firefighter, or a volunteer or paid individual licensed under a licensure classification in subdivision (1) of section 38-1217 who provides medical care in order to prevent loss of life or aggravation of physiological or psychological illness or injury. A “Frontline State Employee” is an employee of the Department of Correctional Services or the Department of Health and Human Services whose duties involve regular and direct interaction with high-risk individuals. A “High-risk Individual” means an individual in state custody for whom violent or physically intimidating behavior is common, including, but not limited to, a committed offender as defined in section 83-170, a patient at a regional center as defined in section 71-911, and a juvenile committed to the Youth Rehabilitation and Treatment Center-Kearney or the Youth Rehabilitation and Treatment Center-Geneva. “State Custody” means under the charge or control of a state institution or state agency and includes time spent outside of the state institution or state agency. NEB. REV. STAT. §48-101.01.

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D. “Arising out of” and “in the course of”

1. “Arising out of”

The phrase "arising out of" describes the accident and its origin, cause, and character, i.e., whether it resulted from the risks arising within the scope of the employee's job.

a) Employment Related Risk

The question is whether the causative danger occurred as a result of an employment related risk. If a person’s risk of injury is increased by the employment, the “arising out of” component is probably satisfied. However, the employment must contribute some risk which resulted in the injury. If it does not, the injury is not compensable.

For example, the Court of Appeals explained in Carter v. Becton-Dickinson, 8 Neb.App. 900, 907, 603 N.W.2d 469, 474 (1999), that an employee’s injuries suffered while simply engaged in “nonstrenuous walking” did not arise out of her employment as “nonstrenuous walking is the ‘epitome of a nonemployment risk’”. In Lucas v. Anderson Ford, 13 Neb. App. 133, 689 N.W.2d 354 (2004), the Court of Appeals affirmed a lower court finding that a hypoglycemic employee’s his hip injuries suffered when he fainted and fell to the floor after attempting to stand up from behind his desk did not arise out of his employment as “[s]tanding up from a seated position certainly does not constitute any greater risk” than the “nonstrenuous walking” in Carter. And finally, in Maradiaga v. Specialty Finishing & Travelers Indem. Co., 24 Neb.App. 199, 884 N.W.2d 153, (2016), the Court of Appeals affirmed a dismissal of an employee’s ankle injury where it fractured when she stepped out of her car in the employer’s parking lot because there was “no evidence that the everyday activity of exiting a car, while carrying nothing heavier than a small lunchbox, was a risk of Maradiaga's employment.”

b) Exception—Unexplained Falls

In unexplained fall cases, there is a presumption that unexplained falls arise out of one’s employment. The employer then has the burden to rebut this presumption with evidence of an idiopathic cause or other risk personal to the employee. Logsdon v. ISCO Co., 260 Neb. 624, 618 N.W.2d 667 (2000).

2. “In the course of”

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This refers to the time, place, and circumstances of the accident. Misek v. CNG Financial, 265 Neb. 837, 660 N.W.2d 495 (2003). Generally an injury is “in the course” of employment if it:

• Takes place during the normal working hours of employment;

• Occurs at a place where the employee may reasonably be required to

be; and

• Takes place while the employee is fulfilling work duties or is engaged in doing something incidental thereto. Skinner v. Ogallala Pub. Schl., 262 Neb. 387, 631 N.W.2d 50 (2001).

3. Special Rules re “Arising out of” and “In the course of”

a) Going and Coming Rule Injuries sustained by an employee while going to and from work do not arise out of and in the course of employment unless it is determined that a distinct causal connection exists between an employer-created condition and the occurrence of the injury. Torres v. Aulick Leasing, Inc., 261 Neb. 1016, 628 N.W.2d 212 (2001).

The following exceptions, however, may apply:

(1) Commercial traveler/dual purpose exception

Where an employee, in the performance of his or her duties, is required to travel and an accident occurs while he or she is so engaged, the accident arises out of and in the course of his employment. Commercial travelers are regarded as acting in the course of his or her employment during the entire period of travel on the employer’s business. The mission of the employer must be the major factor in the journey or movement, and not merely incidental. Torres v. Aulick Leasing, Inc., supra.

(2) Dual purpose exception

If an employee is injured in an accident while on a trip which serves a dual purpose of both a business and a personal purpose, the injuries are compensable as arising out of the course and scope of the employment provided the trip involves some service to be performed on the employer’s behalf which would have occasioned the trip, even if it had not coincided with the personal journey.

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Jacobs v. Consolidated Telephone Co., 237 Neb. 772, 467 N.W.2d 864 (1991).

(3) Personal convenience exception

Under certain circumstances, some acts will be considered to have arisen out of and in the course of employment even when the employee is tendering to a to a matter of personal comfort. These incidents can include leaving the employer’s premises to obtain food or drink. So long as the employee is not acting in conflict with specific instructions from the employer and he or she is engaging in an activity which would normally be expected under the conditions of work, it is possible that the employee will remain within the scope of employment.

For example, in Misek v. CNG Financial, 265 Neb. 837, 600 N.W.2d 495 (2003), the employee was injured while walking to a convenience store to purchase soft drinks for herself as well as her coworkers and supervisors. The Nebraska Supreme Court found that even though the incident did not occur on the employer’s premises, the employee was entitled to worker’s compensation benefits. Since soft drinks were not available on-site, the Court found that the employee was indulging in a matter of personal convenience and comfort that she would be expected to indulge in, and since she obtained permission from her supervisor the accident and injury arose out of an in the course of her employment.

(4) Special errand exception

When an employee, having identifiable time and space limits on the employment, makes an off-premises journey which would normally not be covered under the usual going and coming rule, the journey may be brought within the course of employment by the fact that the trouble and time of making the journey, or the special inconvenience, hazard, or urgency of making it in the particular circumstances, is itself sufficiently substantial to be viewed as an integral part of the service itself. The special errand exception applies when there is instruction, direction, requirement, or suggestion by the employer that the employee make the journey. Torres v. Aulick Leasing, Inc., supra.

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(5) Employer supplied transportation

Where the employer furnishes transportation to the employee, and the trip going to and coming from work is made in a vehicle under the control of the employer, an injury during that trip is incurred in the course of employment. Butt v. City Wide Rock Exc. Co., 204 Neb. 126, 281 N.W.2d 406 (1979). Where an employer pays an employee’s mileage expenses for travel to and from the employee’s home as a result o the employee’s use of a personal vehicle, an injury sustained while the employee is going to or coming from work in that vehicle is one which likely arises out of and is in the course of the employee’s employment.

(6) Injuries sustained in employer parking lot or public lot where employee is directed to park.

Injuries sustained on the employer’s parking lot are generally compensable. Buck v. Iowa Beef Processors Inc., 198 Neb. 125, 251 N.W.2d 875 (1977). For example, a shopping center parking lot provided for the convenience of, and used by, employees of the business located in the center (i.e. strip mall) is considered part of the premises of an employer located in the center. Zoucha v. Touch of Class Lounge, 269 neb. 89, 690 N.W.2d 610 (2005).

(7) Injuries sustained in public areas

Under certain circumstances, injuries occurring in public areas have been found compensable. For example, in Coffey v. Waldinger Corp., 11 Neb. App. 293, 649 N.W.2d 197 (2002), the employer encouraged its employees to use a fenced lot across from the premises, where employees were allowed to park for free. An employee was then hit and killed by a motorist as the employee attempted to cross the street from the assigned parking lot ot the work site. The court concluded that the employer created a condition under which its employees would necessarily encounter hazards while traveling to the premises where they worked. Accordingly, the Court held that there was a distinct, casual connection between the employer’s encouragement of its employees’ use of the parking lot and the occurrence of the accident.

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b) Act of God And injury is considered to have arisen out of and is in the course of employment if it is caused by an act of God, if the employment exposes the worker to an increased risk of being injured by an act of God. Ingram v. Bradley, 183 Neb. 692, 163 N.W.2d. 875 (1969).

E. Causation

1. Burden of Proof

a) Plaintiff’s Burden “The claimant has the burden of proof to establish by a preponderance

of the evidence that such unexpected or unforeseen injury was in fact caused by the employment. There is no presumption from the mere occurrence of such unexpected or unforeseen injury that the injury was in fact caused by the employment.” NEB. REV. STAT. §48-151(2)

The employee bears the burden to establish a causal relationship between the alleged injury and his or her employment. In order for an injury to be compensable it must have been caused by a work related accident or occupational disease. One should not assume that the accident caused the injury or that the injury caused the disability. Mendoza v. Pepsi Cola Bottling Co., 8 Neb. App. 778, 603 N.W.2d 156 (1999).

2. Necessity of Expert Opinion Unless the character of an injury is objective, that is, an injury’s nature and effect are plainly apparent (i.e. amputation of arm), an injury is a subjective condition, requiring an opinion by an expert to establish the causal relationship between an incident and the injury, as well as any claimed disability consequent to such an injury. Caradori v. Frontier Airlines, Inc., 213 Neb. 513, 329 N.W.2d 865 (1983). 3. Existence of Expert Opinion The medical history contained in the medical records does not establish causation. Lounnaphanh v. Monfort, Inc., 585 N.W.2d 783, 7 Neb. App. 452 (1998) 4. Sufficiency of Expert Opinion

For medical testimony to be the basis for an award, it must be sufficiently definite and certain that a conclusion can be drawn that there was a causal

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connection between the accident and the disability. Edmonds v. IBP, Inc., 239 Neb. 899, 479 N.W.2d 754 (1992).

An award of the Workers’ Compensation Court cannot be based on mere speculation or possibility. Edmonds v. IBP, Inc., 239 Neb. 899, 479 N.W.2d 754 (1992); Caradori v. Fronteir Airlines, Inc., 213 Neb. 513, 329 N.W.2d 865 (1983). An award cannot be based on possibility or speculation and if an inference favorable to the claimant can only be reached on the basis thereof, then he cannot recover. Welke v. City of Ainsworth, 138 N.W.2d 808, 179 Neb. 496 (1965).

When a physician's testimony gives rise to conflicting inferences of equal degree of probability so that the choice between them is a mere matter of conjecture, a compensation award cannot be sustained. Welke v. City of Ainsworth, 179 Neb. 496, 138 N.W.2d 808 (1965). Expert testimony that a claimant’s injury “appeared” to be work related is insufficient as a matter of law to prove to a reasonable degree of medical certainty a causal connection between the injury and the work-related activity. Fowler v. Lester Electric, 3 Neb. App. 191, 501 N.W.2d 728 (1993). Expert medical testimony based on “could”, “may” or “possibly” lacks the definiteness required to support an award. Edmonds v. IBP, Inc., 239 Neb. 899, 479 N.W.2d 754 (1992). And expert’s use of the word “suggest”, by itself, is inadequate. Miner v. Robertson Home Furnishing, 239 Neb. 525, 476 N.W.2d 854 (1991); Lounnaphanh v. Monfort, Inc., 583 N.W.2d 783, 7 Neb. App. 452 (1998). Testimony that a work-related accident "very likely" exacerbated claimant's preexisting condition held sufficient. Hare v. Watts Trucking Service, 220 Neb. 403, 370 N.W.2d 143 (1985). Testimony that it was "very probable" that the injury related to the accident held

legally sufficient. Halbert v. Champion International, 215 Neb. 200, 337 N.W.2d 764 (1983).

“Magic words” to the effect that an expert’s opinion is based on a reasonable

degree of medical certainty or probability are not necessary. The sufficiency of an expert’s opinion is judged in the context of the expert’s entire statement. Miner v. Robertson Home Furnishing, 239 Neb. 525, 476 N.W.2d 854 (1991); Michel v. Nuway Drug Serv., 14 Neb. App. 902, 717 N.W.2d 528 (2006).

Where an expert’s opinion does not use "magic words" to express the opinion that the employee’s injury was caused by the work accident, the court may consider the "larger context" of an expert’s opinion as to whether the

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expert’s pinion is sufficient to support an award. Miner v. Robertson Home Furnishing, 239 Neb. 525, 476 N.W.2d 854 (1991)

5. Consecutive Events Following Compensable Accident

A separate compensable injury for each and every work aggravation is not required if the initial cause of the injuries is a direct and natural result of the compensable injury. Hynes v. Good Samaritan Hosp., 291 Neb 757, 869 N.W.2d 78 (2015). See also Stacy v. Great Lakes Agri Mktg., 276 Neb. 236, 753 N.W.2d 785 (2008). . When the question is whether compensability should be extended to a subsequent injury or aggravation related in some way to the primary injury, the rules that come into play are essentially based upon the concepts of “direct and natural results.” Stacy v. Great Lakes Agri Mktg., 276 Neb. 236, 753 N.W.2d 785 (2008). 6. Admissibility of Expert Opinion

Expert testimony should not be received if it appears the witness is not in possession of such facts as will enable him or her to express a reasonably accurate conclusion, as distinguished from a mere guess or conjecture. Hynes v. Good Samaritan Hosp., 291 Neb. 757, 869 N.W.2d 78 (2015). Because the application of Daubert standards in Nebraska is limited to cases in which the Nebraska rules of evidence apply, and those rules do not apply in workers' compensation cases, the admissibility of an expert’s testimony is analyzed under due process. Veatch v. American Tool, 676 N.W.2d 730, 267 Neb. 711 (Neb. 2004). A qualified expert may not testify without adequate basis for his or her opinions concerning the facts of the case on which the expert is testifying. Expert testimony should not be received if it appears that the witness is not in possession of such facts as will enable the expert to express a reasonably accurate conclusion, and where the opinion is based on facts shown not to be true, the opinion lacks probative value. The opinion must have a sufficient factual basis so that the opinion is not mere conjecture or guess. Thus, a trial court may exclude an expert opinion because the expert is not qualified, because there is no proper foundation or factual basis for the opinion, because the testimony would not assist the trier of fact to understand the factual issue, or because the testimony is not relevant. Sheridan v. Catering Mgmt., Inc., 252 Neb. 825, 566 N.W.2d 110 (1997) 7. Aggravation of a Pre-existing Condition A workers' compensation claimant may recover when an injury, arising out of and in the course of employment, combines with a preexisting condition to produce disability, notwithstanding that in the absence of the preexisting condition no

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disability would have resulted. Heiliger v. Walters & Heiliger Electric, Inc., 236 Neb. 459, 461 N.W.2d 565 (1990); Spangler v. State, 233 Neb. 790, 448 N.W.2d 145 (1989); Miller v. Goodyear Tire & Rubber Co. 239 Neb. 1014, 480 N.W.2d 162 (1992).

F. Defenses to Compensability:

1. Factual defenses E.g., the employee’s assertion of a work event is not credible.

2. Causation E.g., the injury not caused by employment; worker’s physical condition caused by pre-existing condition.

a. Natural Progression of Pre-existing Condition v. Aggravation

The natural progression of a pre-existing condition is not compensable. However, where a work related injury combines with a pre-existing injury to produce additional disability, the entire disability is compensable. Heiliger v. Walters & Heiliger Electric, Inc., 236 Neb. 459, 461 N.W.2d 565 (1990); Spangler v. State, 233 Neb. 790, 448 N.W.2d 145 (1989); Miller v. Goodyear Tire & Rubber Co. 239 Neb. 1014, 480 N.W.2d 162 (1992). When assessing an aggravation claim one needs to ascertain the nature and symptoms associated with the pre-existing condition and then compare those symptoms with those which follow the work-related event.

(1) Work event not a substantial contributing factor

An aggravation claim may be defensible if there is evidence that the work-related event was not a contributing factor to the disability. Please note that a doctor’s opinion that the work-related event is the “straw that broke the camel’s back” is probably sufficient medical evidence to make the claim compensable.

(2) Evidence of prior independent disability

An aggravation claim may be defensible if there is evidence that the employee’s pre-existing impairment was independently producing disability before the accident and is continuing to operate as the source of the disability after the accident. Facts suggestive of long term continual

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treatment and/or disabilities similar to those occurring after the accident are important.

3. Legal and Statutory Defenses

Generally, the burden of proof in establishing an affirmative defense to a workers’ compensation claim is on the employer. Intoxication or willful negligence are affirmative defenses, Hilt Truck Lines, Inc. v. Jones, 204 Neb. 115, 281 N.W.2d 399 (1979).

a) Statute of Limitations A workers’ compensation claimant has two years to file a claim against his or her employer. NEB. REV. STAT. §48-137. The two-year statute of limitation period begins to run when the claimant knew or reasonably should have known he or she had a claim to make for payment of medical or indemnity benefits. Pursuant to the statute, a claimant must file his or her Petition within the two years of either (1) the date of accident, or (2) the date of the last payment of benefits, either indemnity or medical payments - whichever is later.

b) Notice of Injury Under NEB. REV. STAT. §48-133, an employee is required to notify the employer of an injury “as soon as practicable” after the happening thereof. A delay in reporting a work injury from December to May exceeds the outer limit of any reasonable delay and precludes the employee from recovering benefits. Williamson v. Werner Enterprises, Inc., 682 N.W.2d 723, 12 Neb. App. 642 (2004).

c) Willful Negligence An employee will not be entitled to workers’ compensation benefits if the employee was willfully negligent at the time of the injury. Willful negligence includes:

1. A deliberate act which constitutes a reckless disregard for the

consequences coupled with a consciousness that injury will naturally or probably result. Estate of Coe v. Willmes Trucking, 268 Neb. 880, 689 N.W.2d 318 (2004).

2. Intoxication

Note that mere intoxication at the time of the accident is not enough. The employer must prove that the intoxication caused the accident or injury.

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d) Violation of a Safety Rule An employee’s deliberate or intentional defiance of a reasonable rule will disqualify that employee from receiving benefits if:

1. the employer has a reasonable rule designed to protect the health and safety of the employee,

2. the employee has actual notice of the rule,

3. the employee has an understanding of the danger involved in the violation of the rule,

4. the rule is kept alive by bona fide enforcement by the employer, and

5. the employee does not have a bona fide excuse for the rule violations.

Guico v. Excel Corp., 260 Neb. 712, 720–721, 619 N.W.2d 470, 477 (2000).

e) Immigration Status

An undocumented alien is still an employee under the Nebraska Worker’s Compensation Act and entitled to benefits as any other employee would be. Even though an undocumented alien cannot legally work in the United States, the Court found that the Act still covers such workers and if the Legislature meant to exclude undocumented aliens from coverage, they could have easily done so. Visoso v. Cargill Meat Solutions, 285 Neb. 272, 826 N.W.2d 845 (2009).

The Court has also confirmed that an employee’s undocumented status does not preclude that employee from being found permanently totally disabled. Moyera v. Quality Pork International, 284 Neb. 963, 825 N.W.2d 409 (2013).

However, if the evidence proves that the undocumented alien intends to remain an unauthorized worker and reside in the United States, then he or she will not be entitled to vocational rehabilitation services. Ortiz v. Cement Products, 270 Neb. 787, 708 N.W.2d 610 (2005).

f) Misrepresentation During Hiring

No compensation shall be allowed if, at the time of or in the course of entering into employment or at the time of receiving notice of the removal

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of conditions from a conditional offer of employment: (1) The employee knowingly and willfully made a false representation as to his or her physical or medical condition by acknowledging in writing that he or she is able to perform the essential functions of the job with or without reasonable accommodation based upon the employer's written job description; (2) the employer relied upon the false representation and the reliance was a substantial factor in the hiring; and (3) a causal connection existed between the false representation and the injury. Neb. Rev. Stat. § 48-148.01

III. Benefits

A. Average Weekly Wage (AWW) Wages are defined as “the money rate at which the service is compensated under the contract of hire in force at the time of the accident.” In most cases, AWW will be calculated using the wages received during the preceding 26 weeks.

1. Tips are normally included in AWW.

2. Bonuses are normally included in AWW. 3. Overtime hours are included in AWW but not overtime wages.

4. Room and board is excluded unless (1) the value of room and board was

fixed by the parties at the time of hire, or (2) insurance premiums are collected based upon the value of room and board.

5. Fringe benefits are excluded unless the value was agreed upon and fixed

by the parties at the time of hire.

6. Abnormally low weeks are EXCLUDED from AWW calculation. Canas v. Maryland Cas. Co., 236 Neb. 164, 459 N.W.2d 533 (1990); Scott v. Drivers Management, Inc., 14 Neb. App. 630, 714 N.W.2d 23 (2006).

7. Abnormally high weeks are INCLUDED. Arbtin v. Puritan Mfg. Co., 13

Neb. App. 540, 696 N.W.2d 905 (2005). 8. If the “character” of the employee’s employment changes during the 26

weeks prior to the accident, only the wages after the change in the character of the employment shall be included in the calculation of the average weekly wage. Griffin v. Drivers Management, Inc., 714 N.W.2d 749, 14 Neb. App 722 (2006).

B. Temporary Disability Benefits

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An employee’s entitlement to temporary benefits ceases at the point when all injuries from the accident or occupational disease have reached maximum medical improvement. Foreman v. State, 240 Neb. 716, 483 N.W.2d 752 (1992).

1. Temporary Total Disability (TTD) After being off work at least 7 calendar days (which need not be consecutive) and still under medical care due to a covered injury, an employee is entitled to receive weekly benefits of “temporary total disability” which are calculated at two-thirds of the worker’s gross average weekly wage – currently subject to a maximum of $760 per week (for dates of accident occurring in the 2015 year). Benefit is payable until maximum medical improvement is obtained.

2. Temporary Partial Disability (TPD)

If the employee is able to return to part-time work or to a position in which he/she earns less than his/her prior wage while under medical care, it has long been thought that the employee was entitled to weekly benefits of two-thirds of the difference between the wage and the employee’s average weekly wage at the time of the accident, subject to the maximum rate. That still remains the prevailing practice. However, in Damme v. Pike Enterprises, Inc., 865 N.W.2d 422, 289 Neb. 620 (2014), the Supreme Court specifically rejected the employer’s assertion that temporary disability benefits are intended to replace a claimant’s wages while healing from an injury. It instructed that “under the Nebraska Workers' Compensation Act, both temporary and permanent disability benefits are awarded for diminished employability or impaired earning capacity and do not depend on a finding that the claimant cannot be placed with the same employer or a different one . . . In short, the level of a worker's disability depends on the extent of diminished employability or impairment of earning capacity, and does not directly correlate to current wages.” Damme v. Pike Enters., Inc., 289 Neb. 620, 856 N.W.2d 422, (2014). (Emphasis added) The Court did not provide an explanation as to how this will work in practice, where an employee’s functional limitations usually vary while recovering from injury, and the employee’s earning capacity is driven in large part by the limitations.

C. Permanent Disability Benefits

I. Scheduled member injuries If as a result of his or her accident the employee suffers permanent impairment to a member, i.e., arms, legs, feet, hands, etc., compensation is payable for that impairment (also known as physical los of use) for a

23

scheduled period of weeks calculated under state law. (Neb.Rev.Stat. 48-121(3)).

II. Body as a whole injuries If the injury is to the body as a whole which is defined to mean the “trunk of the body” such as the back, hip, neck, head, etc., then compensation is payable for the loss of earning capacity sustained as a result of the injury.

a) Permanent Total Disability

Where the employee is permanently and totally disabled, the employee is entitled to have benefits paid as long as the employee is totally disabled--may be for life if injury prevents return to work. Benefits are two-thirds of the worker’s pre-accident average weekly wage. Nebraska has adopted the “odd lot” doctrine, which means that total disability may be found in the case of workers who, while not altogether incapacitated for work, are so handicapped that they will not be employed regularly in any well-known branch of the labor market. The essence of the test is the probable dependability with which claimant can sell his services in a competitive labor market, undistorted by such factors as business booms, sympathy of a particular employer or friends, temporary good luck, or the superhuman efforts of the claimant to rise above his crippling handicaps. Schlup v. Auburn Needleworks, Inc., 239 Neb. 854, 479 N.W.2d 440, (1992).

III. Multiple Injuries in One Accident

a) Multiple Schedule Member Injuries

30 % rule-- An employee with multiple scheduled member injuries caused by one accident may be entitled to permanent benefits based on a loss of earning power, rather than the schedule, if the combined effects of the injuries result in a loss of earning power in excess of 30%. Neb. Rev. Stat. §48-121(3).

b) BAW combined with scheduled member injury

If a worker sustains a scheduled member injury and a whole body injury in the same accident, the court may consider the impact of both injuries in assessing the loss of earning capacity. Zavala v. ConAgra Beef Co., 265 Neb. 188, 655 N.W.2d 692 (2003).

To determine if restrictions from both the scheduled member and body as a whole injury should be considered, the court must determine whether the

24

scheduled member injury adversely affects the worker such that loss of earning capacity cannot be fairly and accurately assessed without considering the impact of the scheduled member injury upon the worker’s employability. If the loss of earning capacity cannot be fairly and accurately assessed without such consideration, then the court is permitted to consider both the schedule member and the body as a whole injuries to determine the plaintiff’s loss of earning power. However, the claimant may not recover both a loss of earning that takes into account a schedule member injury and indemnity for the permanent impairment of the scheduled member injury. Bishop v. Specialty Fabrication Co., 277 Neb. 171, 760 N.W.2d 352 (2009); Madlock v. Square D Co., 269 Neb. 675, 695 N.W.2d 412 (2005); Zavala v. ConAgra Beef Co., 265 Neb. 1888, 655 N.W.2d 692 (2003).

D. Death Benefits

If a worker dies as a result of his or her work injury, the widow(er) is entitled to weekly compensation benefits for life or until remarriage at the rate of two-thirds of the worker’s gross average weekly wage at the time of death subject to the maximum rate per week. Upon remarriage, the widow(er) receives two (2) years of benefits in one lump sum. NEB. REV. STAT. § 48-122 Dependent children: If the worker was survived by dependent children at the time of death, weekly benefits are payable to the children during their dependency or until age 19, or age 25 if incapable of support or a full-time student. Burial—Employer must pay expenses of burial up to $10,000.

E. Apportionment Under certain limited circumstances, apportionment of a claimant’s disability between a prior injury and the current injury is allowed. The loss of earning capacity attributable to a previous injury may be apportionable if there is evidence that the injury, (1) was an injury to the body as a whole, (2) was independently producing some disability prior to the current accident, (3) continued to operate as a source of disability after the accident, and (4) claimant was “compensated” for the previous injury. Martinez-Najarro v. IBP, Inc., 12 Neb. App. 504, 678 N.W.2d 114 (2004). Apportionment occurs after the loss of earning power evaluation for the current injury has been determined, the amount of loss of earning power for which the claimant has already been compensated being then deducted from the subsequent loss of earning power. Martinez-Najarro, supra.

F. Medical Care

25

1. Employee’s Right to Choose

If the employer has given a Form 50 (choice of physician form) to the employee, the injured employee has the right to choose his or her physician but only if that physician is one who has previously treated the employee or an immediate family member and has records of such treatment. NEB. REV. STAT. §48-120(2)(a). Family member includes: a spouse, children, parents, stepchildren, and stepparents of the employee. If the employer does not provide the employee with a Form 50 or compensability was denied, the employee is free to treat with any, and perhaps as many physicians as desired, without limitation to the family doctor

2. Employer’s Right to Choose

The employer has the right to select the physician if an employee executes a Form 50 and does not select a physician, or no physician meets the previous treatment of employee or immediate family member requirement.

3. Unlimited Medical Expenses

The employer is liable for all reasonable medical, surgical, and hospital services which are required by the nature of the injury and which will relieve pain or promote and hasten the employee’s restoration to health and employment. NEB. REV. STAT. §48-120.

a) Reasonable and Necessary--There is no limit on the amount of

medical treatment to which an employee is entitled as long as the treatment is necessary and the charges do not exceed either the applicable Fee Schedule or the “regular charges” for services provided.

4. Independent Medical Examiner (IME)

When there is a dispute regarding a plaintiff’s medical condition or related issues, either party may request an IME. The parties may either agree on an independent medical examiner or may request that the court appoint an IME provider. The cost of the IME is paid by the employer/insurer regardless of which party requests the IME. NEB. REV. STAT. § 48-134.01.

5. Defense Medical Examiner (DME)

The employer/insurer has the right from time to time during the continuance of and employee’s alleged work-related disability to have the employee examined by a physician of its choosing. The employee has the

26

right to have a physician provided and paid for by the employee present at the examination

6. Schedule of Fees

Nebraska’s fee schedule structure is divided into three general categories: (1) Medical Services (physicians, therapists, etc.), (2) Hospital and Ambulatory Surgical Centers and (3) Implantable Medical Devices. The Workers’ Compensation Court revises this at least every two years.

7. Managed Care

Employers and insurance companies may contract for medical, surgical, hospital, and rehabilitation services to be provided through a managed care plan. The managed care plan must be certified by the Compensation Court. NEB. REV. STAT.§48-120(9); Nebraska Workers' Compensation Court Rule of Procedure 53. Compensability must be accepted in order to limit an employee to treatment within the managed care plan.

G. Vocational Rehabilitation NEB. REV. STAT. §48-162.01(3) provides: “When as a result of the injury, the employee is unable to perform suitable work for which he has previous training or experience, he is entitled to such vocational rehabilitation services, including job placement and training, as may be reasonably necessary to restore him to suitable employment.”

1. Immigration Status

Illegal aliens who may not be lawfully employed in the United States and who intend on remaining in the United States, are not entitled to vocational rehabilitation services in the United States. Ortiz v. Cement Products, 270 Neb. 787, 708 N.W.2d 610 (2005).

2. Suitable Work/Employment

Employment similar in remuneration to that earned prior to the injury and which is compatible with the employee’s pre-injury occupation, age, education, and aptitude. Haney v. Aaron Ferer & Sons, Co., 3 Neb. App. 14, 521 N.W.2d 77 (1994).

3. Appointment/Selection/Payment of Vocational Counselors

NEB. REV. STAT. §48-162.01 provides that the employer and employee are to attempt to agree upon a vocational counselor to act as the counselor of record. If no agreement can be reached, the Compensation Court is to

27

be notified of the disagreement in writing, along with a request for the appointment of a counselor from a directory maintained by the court.

4. Fee for Vocational Rehabilitation Evaluation and Vocational Plan The fee for the evaluation and the vocational rehabilitation plan is to be paid by the employer or its workers’ compensation insurance carrier.

The fee of the vocational rehabilitation counselor for the loss of earning power evaluation shall be paid for by the employer/ insurer within thirty (30) days of receipt of a statement of charges. Rule 45 (c) of Procedure, Workers’ Compensation Court.

5. Indemnity benefits to employee during vocational plan The insurer/employer generally has an obligation to pay temporary total

disability benefits, or, in certain limited situations, temporary partial disability benefits, during the vocational rehabilitation program. The Workers’ Compensation Trust Fund pays tuition, book expense, mileage, and lodging expenses incurred as a result of vocational rehabilitation, when applicable. NEB. REV. STAT. §48-162.01.

6. Court Rules relating to Vocational Rehabilitation

Rules 36-38 Vocational Rehabilitation Counselor: Rules 39-41 Certification: Rule 40-41 Choice: Rule 42 Change: Rule 43 Vocational Rehabilitation Plan: Rule 44

IV. PENALTIES

A. 50% Waiting Time Penalty

May be awarded:

1. Only for nonpayment of indemnity benefits (not for non-payment or late payment of medical expenses). See Roth v. Sarpy Co. Highway Dept., 253 Neb. 703, 572 N.W.2d 786 (1998); Gaston v. Appleton Electric, 253 Neb. 897, 573 N.W.2d 131 (1998); and

2. If there is no reasonable controversy regarding compensability, and

3. Benefits are not paid within 30 days after notice of disability, Order,

Award, or Judgment

28

B. Attorney Fees

May be awarded if . . .

1. Penalty applies because of nonpayment of benefits;

2. Delinquent or nonpayment of medical expense;

3. Employer appeals and there is NO reduction in award;

4. Employee Appeals and receives additional benefits.

C. Interest and Court Costs When the employee is awarded an attorney's fee under §48-125, the employee is entitled to interest on the final Award. NEB. REV. STAT.§48-125(2). When the employee is allowed an attorney's fee under §48-125, the employee shall further be entitled to costs of depositions, if admitted into evidence, and the fees and mileage for necessary witnesses attending the hearing at the request of the employee. NEB. REV. STAT. §48-172.

V. SUBROGATION

A. Statutory Right to Subrogation

The employer (or its insurer) has a statutory right to be subrogated to any recovery by the employee against a third-party tortfeasor for his or her work-related injuries. If the parties cannot agree upon a distribution of the recovery, the District Court which has jurisdiction over the matter is to make a “fair and equitable distribution” of any judgment or settlement from the tortfeasor. In re Estate of Evertson, 295 Neb. 301, 889 N.W.2d 73 (2016); Turco v. Schuning, 271 Neb. 770, 708 N.W.2d 606 (2006); Jackson v. Branick Industries, 254 Neb. 950, 581 N.W.2d 53 (1998).

As to what constitutes a “fair and equitable distribution”, the Supreme Court in Kroemer v. Omaha Truck Equipment, L.L.C., 296 Neb. 972, 898 N.W.2d 661 (2017), quoting liberally from its holding in Bacon v. DBI/SALA, 284 Neb. 579, 822 N.W.2d 14 (2012), explained that “there is ‘no reason to conclude that the beneficent purposes of the Act require us to narrowly interpret the employer's statutory subrogation rights.’ Rather, we determined that ‘the policies behind the Act favor a liberal construction in favor of the employer's statutory right to subrogate against culpable third parties.’ In an effort to balance the rights of injured employees against the costs to employers, most workers' compensation acts ‘liberally allow employers to shift liability onto third parties whenever possible.’ We iterated that ‘§ 48-118 was enacted 'for the benefit of the employer'’ and that where a third party negligently causes the employee's injury, ‘'employers who are required to compensate employees for injuries are intentionally granted a measure of relief equivalent to the compensation paid and the expenses incurred.'”

29

While the Supreme Court has not identified what factors shall be considered in making a “fair and equitable” distribution, they have made it clear that the following factors shall not be considered:

• Equitable principles, such as the doctrine of unclean hands,

equitable estoppel, promissory estoppel, and judicial estoppel. Burns v. Nielsen, 273 Neb. 724, 732 N.W.2d 640 (2007).

• The “made whole” doctrine, requiring the employee be made whole before the employer/insurer is entitled to any recovery of its subrogation interest. Turco v. Schuning, 271 Neb. 770, 708 N.W.2d 606 (2006).

• The fact that the insurer was paid premiums by the employer in

exchange for its agreement to accept the risk of paying workers’ compensation benefits. Kroemer v. Omaha Truck Equipment, L.L.C., 296 Neb. 972, 898 N.W.2d 661 (2017).

• The comparative ability to deal with the risk of loss, as

between the employee and insurer. Kroemer v. Omaha Truck Equipment, L.L.C., 296 Neb. 972, 898 N.W.2d 661 (2017).

• The participation, or lack thereof, of the insurer or employer in

making the third party recovery. Kroemer v. Omaha Truck Equipment, L.L.C., 296 Neb. 972, 898 N.W.2d 661 (2017).

• Giving “short shrift to the right of the employer or its insurer”

to recover its subrogation interest. Kroemer v. Omaha Truck Equipment, L.L.C., 296 Neb. 972, 898 N.W.2d 661 (2017). The Court explained that the subrogation statute “encourages prompt payment of benefits, even when a third party is liable for the injury, by providing an employer or its insurer with the means to recover at least a portion of its payout.”

B. Procedural Rules/Attorneys’ Fees

Keep in mind the following regarding the procedures to follow in a third-party claim where an employer/insurer’s subrogation right exists:

a. The employer/insurer must be made a party to any lawsuit by the

plaintiff against a third-party tortfeasor.

30

b. The employee must provide the employer/insurer with notice at least 30 days before filing suit. If the employee fails to provide the required notice, he or she cannot recover expenses or attorney fees from the subrogated amount.

c. The employee's attorney may be able to recover attorney fees against the

employer/insurer based upon the amount recovered to offset the employer/insurer's subrogation interest.

d. Although there is no "sure fire" way to prevent claimant's attorney fee on

subrogated recovery, the employer may minimize this amount by hiring its own counsel. Active participation by the employer's counsel in the lawsuit is probably required in order to eliminate or minimize the attorney's fee payable to the employee's attorney.

VI. SETTLEMENT OF A CLAIM

A. Lump Sum Settlement Approved by the Court

1. Court approval of settlements (through an application for lump sum

settlement) is required if:

a. The employee is not presented by counsel; or

b. The employee, at the time the settlement is executed, is eligible for Medicare, is a Medicare beneficiary, or has a reasonable expectation of becoming eligible for Medicare within thirty months after the date the settlement is executed; or c. Medical, surgical, or hospital expenses incurred for treatment of the injury have been paid by Medicaid and Medicaid will not be reimbursed as part of the settlement; or

d. Medical, surgical, or hospital expenses incurred for treatment of the injury will not be fully paid as part of the settlement; or e. The settlement seeks to commute amounts of compensation due to dependents of the employee.

2. The Court will generally not approve a lump sum settlement unless the claimant:

a. Has reached maximum medical improvement. b. Is currently working or receiving social security disability benefits.

31

c. Have his or her permanent impairment for injuries to the body as a whole or scheduled member injuries assessed.

Exception--Court may approve even if one of the above is missing, if a

reasonable argument can be made as to the compensability of the alleged work accident.

3. The Importance of Considering Medicare’s Interests

When considering the full and final settlement of a workers’ compensation claim, there should always be a determination made as to whether Medicare has an interest in the claim that needs to be considered. If so, steps need to be taken to satisfy Medicare’s interest so Medicare does not deem the settlement as an attempt to improperly shift the cost of the treatment of the work-related condition to Medicare. Whether a case meets Medicare’s “workload review thresholds” or not, the claimant and employer or insurer need to remain mindful of whether Medicare has a potential interest in the settlement that needs to be protected. a. Conditional Payments

These are payments made by Medicare that should have been paid by the employer or insurer as part of the workers' compensation claim, and they need to be identified and reimbursed. The employer and insurer are required to agree to resolve any post-settlement claims for reimbursement of Conditional Payments by Medicare.

b. Medicare Set Aside

This is a vehicle that is used to set aside an amount of money to be used to pay future Medicare covered medical expenses which are necessitated by the work injury.

B. Settlement by Release:

Parties may settle claims without obtaining court approval where a court approved lump sum settlement is not required (See above), by filing a release with the court.

The release must be:

1. Signed and verified by the employee and the employee’s attorney;

2. On a form approved by the Workers’ Compensation Court;

http://www.wcc.ne.gov

32

3. Filed with the Workers’ Compensation Court;

4. After the settlement proceeds are paid, the parties must sign a stipulation

to dismiss the employee’s claim, and a proposed order doing so. This applies even in cases which are not litigated.

Petition to Modify – To File or Not to File

Jennifer Caswell, J.D. Baylor, Evnen, Curtiss, Grimit & Witt LLP


1

PETITION TO MODIFY – TO FILE OR NOT TO FILE

Jennifer S. CaswellBaylor Evnen Curtiss Grimit & Witt, LLP

©2017 Baylor Evnen

Neb. Rev. Stat. §48-141 states in relevant part:

The amount of any agreement or award payable periodically may be modified as follows…(2) if the parties cannot agree, then at any time after six months from the date of the agreement or award, an application may be made by either party on the ground of increase or decrease of incapacity due solely to the injury.

©2017 Baylor Evnen

Does the modification statute under the Nebraska Workers’ Compensation Act apply to modification of awarded medical

benefits or just indemnity benefits?

©2017 Baylor Evnen

• The grounds for an application to modify listed in §48-141 suggest modification only applies to indemnity benefits.

• Court’s analysis in Bronzynski v. Model Electric, 14 Neb. App. 355, 707 N.W.2d 46 (2005) suggests this premise is true.

• Otherwise, a modification action would be necessary every time either party disputed a medical bill.

Does the modification statute under the Nebraska Workers’ Compensation Act apply to modification of awarded medical

benefits or just indemnity benefits?

2

Who has the burden of proof with a Petition for Modification and what is that burden?

• The party filing the Petition for Modification has the burden to prove, by preponderance of the evidence, an increase or decrease in incapacity due solely to the injury resulting from the original accident.

See Rader v. Speer Auto, 287 Neb. 116, 841 N.W.2d 383 (2013).

• The party filing the Petition for Modification must show two elements.

See Jurgens v. Irwin Industrial Tool Co., 20 Neb. App. 488 825 N.W.2d 820, 827 (2013):

• A change in the employee’s physical condition/impairment.• A change in the employee’s disability/loss of earning capacity.

©2017 Baylor Evnen

When is it necessary to file a Petition for Modification?

It depends greatly on the language used in the Award. See Weber v. Gas ‘N Shop Inc., 280 Neb. 296, 786 N.W.2d 671 (2010).

©2017 Baylor Evnen

Why is it important to recognize if it is necessary to file a modification action?

• Unilateral termination of temporary disability by an employer/insurer in certain circumstances is prohibited and could result in significant penalties, attorney fees and interest.

See Starks v. Cornhusker Packing Co., 254 Neb. 30, 573 N.W.2d 757 (1998).

• If the original Award did not set forth a specific end date for the termination of the Plaintiff’s workers’ compensation disability benefits, a Petition is required.

• However, if the underlying Award identified a specific event which would permit the cessation of temporary total disability benefits by an employer/insurer, then a Petition to terminate those benefits is not required.

©2017 Baylor Evnen

3

When is it necessary to file a Petition for Modification?

Look for the following language when making the determination:

• “When plaintiff’s total disability ceases, if thereafter the parties cannot agree on the extent of plaintiff’s permanent disability, if any, then a further hearing may be had on the application of either party.” MODIFICATION NOT REQUIRED

• “For so long as Plaintiff shall remain temporarily totally disabled” MODIFICAITON REQUIRED

When in doubt it is better to file.

• A modification to a Nebraska Workers’ Compensation Award cannot be applied retroactively to a date earlier than that on which the application for modification was filed.

See Hagelstein v. Swift-Eckrich, 261 Neb. 305, 622 N.W.2d 663 (2001).

©2017 Baylor Evnen

Jennifer S. CaswellBaylor Evnen Curtiss Grimit & Witt, LLP

©2017 Baylor Evnen

PETITION TO MODIFY – TO FILE OR NOT TO FILEDISCUSSION

Subrogation Resolution Update Ron Brown, J.D.

Brown & Theis, LLP


20 1 7 Annual Workers' Compensation Seminar

November 3, 2017

Subrogation Resolution Update

Ronald Brown Brown & Theis, LLP

11640 Arbor Street, Suite 203 Omaha, NE 68144

ISU!Iil:hrowptt)~js.wm Phone: (402) 932-7555

Fax: (402) 932-7556

IN THE DISTRICT COURT OF DOUGLAS COUNTY, NEBRASKA

NORMAN KROEMER,

Plaintiff,

vs.

OMAHA TRACK EQUIPMENT, LLC, THE TIE YARD OF OMAHA, INC. N/KIA OMAHA TRACK, INC., and RIBBON WELD, LLC,

Defendant.

) Cl14-6741 )

) ) ) ORDER ) ) )

) )

AUG 11 2016

THIS MATIER CAME before the Court for hearing on Plaintiff Norman Kraemer's

Motion for Allocation of settlement proceeds pursuant to Neb. Rev. Stat. §48-118 on July 14,

2016. Plaintiff appeared with counsel, Ronald Brown and Aaron Brown and Defendant

RibbonWeld, LLC (RibbonWeld) appeared through counsel, Julie Jorgensen. Upon receipt of

the final written argument on or about July 25, 2016, the Court took the matter under

advisement.

RibbonWeld stated that it has no objection to the attorney fee for Mr. Kraemer's

attorney in the amount of $55,165.73. However, RibbonWeld does object to the proposed

settlement of Mr. Kraemer's claims against OTE in the amount of $150,000 to be

unreasonable, or in the alternative, if the Court accepts the settlement that the Court provide

for a fair and equitable distribution of the settlement proceeds.

The basis for the hearing in this matter is Neb. Rev. Stat. §48-118.04 which states:

(1) A settlement of a third-party claim under the Nebraska Workers' . Compensation Act is void unless:

(a) Such settlement is agreed upon in writing by the employee or his

or her personal representative and the workers' compensation insurer

of the employer, if there is one, and if there is no insurer, then by the

employer; or

\ .

(b) In the absence of such agreement, the court before which the

action is pending determines that the settlement offer is fair and

reasonable considering liability, damages, and the ability of the third

person and his or her liability insurance carrier to satisfy any

judgment.

(2) If the employee or his or her personal representative or the employer or

his or her workers' compensation insurer do not agree in writing upon

distribution of the proceeds of any judgment or settlement, the court,

upon application, shall order a fair and equitable distribution of the

proceeds of any judgment or settlement.

Mr. Kraemer was injured on February 24, 2012 at approximately 11:35 A.M. when a

grinder operated by Co-worker Nathan Streit exploded. Mr. Kroemer and Mr. Streit were

employees of Ribbon Weld and on the date of the accident they were working at the Omaha

Track Equipment ("OTE") Shop. Deposition testimony by Mr. Kraemer indicated that

RibbonWeld employees used the OTE shop periodically, but probably not more than a couple

of times a year, to do work on their equipment. RibbonWeld employees were primarily on the

road doing work on the railroad.

On the date of the incident the Ribbon Weld employees had been working in the OTE

shop since about 7:00A.M. Testimony established that RibbonWeld employees were free to

use any of the OTE equipment available in the shop. Testimony by Ryan Coleman, an OTE

employee, and by the Plaintiff indicated that most of the equipment available in the shop,

including the subject grinder, were the property of OTE.

An investigative report was authored approximately four days after the accident.

According to the report, the accident occurred when Mr. Streit and Mr. Kroemer were told by

RibbonWeld officials to alter an allen wrench owned by RibbonWeld, which was too short for

a task they needed to do. They were told to cut the allen wrench at the weld line (it had

previously been altered) and put in a piece to elongate it so that it would work for the repair

they had to do. Mr. Kroemer testified at his deposition that he and Mr. Streit asked if they

could just purchase another tool, and they were told they wasted too much money on tools.

An allen wrench can apparently be purchased for about $15.

2

•, ... ..

In order to perform the modification of the tool in question Mr. Streit located a four-and

a-half-inch Milwaukee grinder underneath a shop table at the OTE shop. Mr. Streit told the

investigator that he selected the grinder because it already had a zip wheel attached to it and '

because the guard had already been removed. It was later learned that a seven-inch zip

wheel had been attached to the four-and-a-half-inch grinder. Although not completely clear,

there is evidence that the labeling on the fly wheel was worn off at the time of the incident.

According to witness statements made by Mr. Streit, Mr. Coleman and Mr. Koerner at

the time of the investigation, as soon as Mr. Streit turned on the grinder they could tell

something was wrong. According to the investigative report all of the parties agreed at that

time that the blade began to wobble. In his deposition testimony Mr. Coleman (an employee

with OTE) disputed his earlier statement to a degree, asserting that the odd noise he heard

was of the grinder spooling versus the wheel wobbling. Regardless, both Mr. Kraemer and

Mr. Coleman agree that within approximately two seconds or less from the grinder being

turned on, the zip wheel exploded. The explosion sent shrapnel in the left eye of Mr.

Kroemer and the left hand of Mr. Streit. Information obtained after the explosion of the zip

wheel indicated that the Milwaukee grinder in question was rated at 11,000 RPM while the 7

inch zip wheel attached to it was rated at 8,600 RPM. In his deposition Mr. Kroemer admitted

that the use of a seven-inch zip wheel with the maximum RPM of 8,600 on a grinder with a

maximum 11,000 RPM may have led to the explosion. He also stated that part of the cause . of the incident was Mr. Streit's failure to confirm that the appropriate wheel was attached to

the grinder. Mr. Kroemer also admits that if a stationary vice had been used to hold the tool

they intended to alter he would not likely have been close enough to be injured.

At the time of the incident Mr. Kroemer was wearing safety glasses. Mr. Kroemer was

not planning to use the grinder, but was planning to hold the wrench with pliers or a hand vise

while Mr. Streit cut the weld. Mr. Streit, who was operating the grinder was also wearing

safety glasses, a face shield, and ear plugs.

The safety glasses that Mr. Kroemer was wearing had side guards on them, but the

glasses were knocked off of his head at some point during the explosion. Mr. Kraemer

testified that when the fly wheel exploded pieces struck his cheek and glasses. He testified

that pieces of the safety glasses themselves, pieces of the exploded fly wheel, and pieces of

3

t ·-

wood were found in his eye by physician. He did admit that it is possible that the incident

would not have caused the extent of injuries it did if he was wearing a face shield in addition

to the safety glasses.

As a resuH of the injury, Mr. Kroemer has lost 95% of the vision in his left eye. He has

tried, but can no longer physically qualify for a Commercial Drivers License (COL) and as a

result of the loss of his COL he lost his job with RibbonWeld when it was acquired by another

company. The previous owners had allowed him to return to light duty, but without a COL the

new owners of the company were not interested in retaining him.

After over two years of medical and indemnity payments, a lump sum settlement of

$80,000 was approved by the Workers' Compensation Court. After payment of the lump sum

RibbonWeld's subrogation totaled $207,555.01.

In support of its argument for partial allocation, RibbonWeld presented the affidavit of

attorney Robert Lannin to the Court. Mr. Lannin has more than 30 years of experience in civil

litigation and as part of his practice is regularly called on to value cases. Mr. Lannin generally

agrees with Mr. Kroemer's expert's assessment of the value of the case of approximately

$850,000. Mr. Lannin opines that there would be a 70-80% chance of a verdict in favor of Mr.

Kraemer if his case were to go to trial. Using the referenced valuation, along with specific

special damages asserted by Mr. Kraemer, Mr. Lannin opines that even if comparative

negligence was assessed at 40%, it would lead to a recovery by the Plaintiff of $515,401.92.

He therefore opines that the settlement was inadequate given the value of the case, and that

the settlement appears to be made with the intention of no, or very minimal, recovery to

Ribbon Weld.

Mr. Kroemer presented the affidavits of two attorneys, Michael Dowd and Paul Prentiss,

both of whom have over 25 years of experience in personal injury related litigation. Both

attorneys estimate Mr. Kroemer's damages to be at least $850,000, an amount similar to Mr.

Lannin's opinion. However, both attorneys state that they believe that if a trial were held,

there is a very substantial probability of a jury verdict for OTI based upon Mr. Kroemer's

contributory negligence. Mr. Dowd points out that Mr. Kraemer was not wearing appropriate

eye protection equipment. Mr. Prentiss states that Mr. Kraemer has admitted or

acknowledged numerous acts or omissions on his part that contributed to his injury and that

4

...... ' . ,

there is a very substantial probability (80%-90%) of a jury verdict for OTI due to Mr.

Kraemer's eomparative fault exceeding 50%-which would mean Mr. Kraemer woulq receive

nothing from OTI.

RibbonWeld disagrees and argues that it is likely that a jury would find Mr. Kraemer

less than 50% at fault for his injuries. RibbonWeld points out that Mr. Kraemer was using

OTE equipment and that it did not have protective guards nor did OTE provide any training to

Mr. Kraemer. But, as pointed out above, Mr. Kroemer was attempting to alter RlbbonWeld

equipment at the request of RibbonWeld's owner. He just happened to use OTE equipment.

RibbonWeld is arguing that Mr. Kraemer should not only take the risk inherent in the

litigation but also be responsible for the advancement of associated costs including retention

of experts. If RibbonWeld really believes that Mr. Kroemer could recover $850,000, or a

lesser but still substantial amount from OTE, it could have initiated the litigation and

advanced these costs, or, RibbonWeld could advance Mr. Kraemer the $150,000 and taken

an assignment of the claim. RibbonWeld also could have participated in the mediation but did

not. RibbonWeld did not participate in discovery. All of the attorneys who submitted affidavits

agree that Mr. Kraemer's injuries support damages of $850,000 or more but RibbonWeld

wants Mr. Kraemer to risk recovering zero. Mr. Kraemer apparently does not want to assume

that risk by himself and he is willing to recover a guaranteed $150,000 (less attorney fees and

expenses). Under the circumstances presented, the agreed upon settlement amount of

$150,000 is reasonable.

The Court of Appeals recently stated in Travelers lndem. Co. v. Wamsley, 23 Neb.

App. 73 (2016):

Although Travelers claims that the county court erred in applying a "made whole" analysis instead of a "rule of proportionality" analysis, § 48-118.04 does not prescribe an exact formula for the trial court to apply when making a fair and equitable distribution. Turco, supra. The Nebraska Supreme Court has refused to read such a formula into the statute and has specifically rejected the adoption of the "made whole" doctrine or the "rule of proportionality" to determine what constitutes a fair and equitable distribution. Turco, supra; Sterner v. Amencan Fam. Ins. Co., 19 Neb. App. 339, 805 N.W.2d 696 (2011) (abuse of discretion for court to apply "made whole" analysis in dividing settlement). Under the plain language of§ 48-118.04, the trial court shall make a fair and equitable distribution; the distribution is left to the court's discretion and is to be determined by the trial court under the facts of each case. See, Turco, supra; Sterner, supra.

5

... . ,._ "; . . ~

In the instant case, the county court conducted a fair and equitable analysis, taking into consideration various factors including Evertson's long-term marriage to Darla, their enjoyment of travel and family trips both in and out of this country, and their purchase of a "'dream home"' in California in 2013. The county court also considered factors such as that Travelers had charged and received the necessary premiums to provide workers' compensation coverage for Evertson Operating Company and that under all the circumstances, Trav~lers' financial risk was minimal and insurance companies are in the business of a~suming risk. We disagree with Travelers' assessment that the county court was.considering an equitable assessment in considering there was no~~vidence t~at'-:rravelers helped finance the settlement between EMC and the Est~te; rathe~i;tJ;le county court's language indicates·that the court was considering that. Tfavelers ~i~ qot expend any funds in securing the settlement. '\•-r/! :.. _, .. ~ .. ,

ld. at 740-741. tt .-----In the end the Court of Appeals affirmed a zero allocation to Travelers.

Considering the nature of Mr. Kroemer's loss (almost total loss of vision in his left eye),

the substantial damages he suffered that both parties agree are $850,000 or more, that the

insurer charged and received a substantial premium of nearly $175,000 for the insurance

coverage and the comparative risk to the insurance carrier versus Mr. Kroemer, the Court

makes the following fair and equitable allocation:

Attorney's fees and expenses

Norman Kroemer

RibbonWeld/Hartford

$55,165.73

$94,834.27

$0.00

DATED THIS /0 DAY OF AUGUST, 2016.

RUSSELL DERR · DISTRICT COURT JUDGE

6

OPINION OF TIIE SUPREME COURT OF NEBRASKA

Case Title

NoRMAN KROEMER, APPElLEE,

v. OMAHA TRACK EQUIPMENT, L.L.C., AND THE TIE YARD OF OMAHA, NOW KNOWN AS

OMAHA TRACK, INC., APPElLEES, AND RIBBON WELD, LLC, APPELLANT.

Case Caption

KROEMER V. OMAHA TRACK EQUIP.

Filed June 16.2017. No. S-16-856.

Appeal from the District Court for Douglas County: J RUSSELL DERR, Judge. Affirmed in part, and in part reversed and remanded with direction.

Julie A. Jorgensen, of Morrow, Willnauer, Klosterman & Church, L.L.C., for appellant.

Ronald L. Brown, of Brown & Theis, L.L.P., for appellee Norman Kroemer.

Gregory F. Schreiber and Albert M. Engles, of Engles, Ketcham, Olson & Keith, P.C., and, on brief, Brock S.J. Hubert, for appellee Omaha Track Equipment, L.L.C .

•

KROEMER v. OMAHA TRACK EQUIP.

Filed June 16,2017. No. S-16-856.

1. Statutes: Appeal and Error. Statutory interpretation presents a question of law, for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below. 2. Workers' Compensation: Judgments: Appeal and Error. Distribution of the proceeds of a judgment or settlement under Neb. Rev. Stat. § 48-118.04 (Reissue 2010) is left to the trial court's discretion and reviewed for an abuse of that discretion. 3. Judges: Words and Phrases. A judicial abuse of discretion requires that the reasons or rulings of a trial judge be clearly untenable, unfairly depriving a litigant of a substantial right and a just result. 4. Workers' Compensation: Subrogation. Neb. Rev. Stat. § 48-118 (Reissue 2010) grants an employer who has paid workers' compensation benefits to an employee injured as a result of the actions of a third party a subrogation interest against payments made by the third party. 5. Workers' CompenSation. A settlement of a third-party clitim is void under Neb. Rev. Stat. §48-118.04(1) (Reissue 2010) unless the settlement is either agreed upon in writing by the employee and employer or its insurer or determined by the court to be fair and reasonable. 6. Workers' Compensation: Insurance. In determining the fairness and reasonableness of a settlement of a third-party claim under the Nebraska Workers' Compensation Act, a court considers liability, damages, and the ability of the third person and hls or her liability insurance carrier to satisfy any judgment. 7. Workers' Compensation: Subrogation. The policies behind the Nebraska Workers' Compensation Act favor a liberal cOnstruction in favor of an employer's statutory right to subrogate against culpable third parties. 8. Workers' Compensation: Insurance: Case Disapproved. In re Estate of Evertson, 23 Neb. App. 734, 876 N.W.2d 678 (2016), is disapproved to the extent that the court considered payment of premiums and comparative risk in allocating none of the proceeds of a workers' compensation settlement to the insurer. 9. Workers' Compensation: Subrogation: Equity. Although Neb. Rev. Stat. § 48-118.04(2) (Reissue 2010) calls for a fair and equitable distribution, subrogation in workers' compensation cases is based on statute, and not in equity. 10. Workers' Compensation: Insurance: Equity. A distribution of the proceeds of a judgment or settlement under Neb. Rev. Stat. § 48-118.04(2) (Reissue 2010) must be fair and equitable to both the employee and the employer or its insurer.

-2-

WRIGHT, MILLER-LERMAN, CASSEL, STACY, KELCH, and FuNKE, JJ.

CASSEL,J.

I. INTRODUCTION

An injured employee proposed to settle his third-party suit for $150,000. His employer, which had a subrogation interest of over $200,000, contested. the settlement. The district court determined that the settlement was fair and reasonable but allocated none of it to the employer. Because of the disputed litigation risk. approval of the settlement was not an abuse of discretion. But under our statutory scheme, the allocation of zero to the employer was legally untenable. We affirm in p~ and in part reverse, and remand with direction.

ll. BACKGROUND

At the relevant time, Ribbon Weld, LLC, and Omaha Track Equipment, L.L.C. (OTE), were both wholly owned subsidiaries of The Tie Yard. of Omaha, now known as Omaha Track, Inc. Ribbon Weld's employees occasionally used OTE's shop to service their equipment and, while doing so, used OTE's tools. Norman Kroemer, a Ribbon Weld employee, sustained an eye injury in connection with the use ofOTE's tools at OTE's shop.

Kroem~ and Ribbon Weld. entered into a compromise lump-sum settlement for $80,000, which the Nebraska Workers' Compensation Court approved. After payment of the lump sum, Ribbon Weld's subrogation interest totaled $207,555.01.

Kroemer then sued OTE, The Tie Yard of Omaha, and Ribbon Weld. The suit alleged negligence. Kroemer made Ribbon Weld a party "for the limited purpose provided by [Neb. Rev. Stat. §] 48-118 [(Reissue 2010)]." OTE asserted numerous affrrmative defenses, including comparative negligence. In Ribbon Weld's answer, it asked that any recovery by Kroemer be subject to its subrogation right.

Kroemer and OTE engaged in mediation to settle the third-party claim. Ultimately, they negotiated a compromise settlement of claims in the amount of $150,000. Although Ribbon Weld did not contribute or share in litigation expenses, it contested the proposed settlement.

The district court held a settlement and allocation hearing under Neb. Rev. Stat. § 48-118.04 (Reissue 2010). Kroemer testified about the accident and injury, which occurred as he and a coworker endeavored to cut through a "spot-weld on [an] Allen wrench." Kroemer planned to hold the Allen wrench and socket with a pair of pliers as his coworker operated a "Milwaukee grinder with the wheel." When Kroemer's coworker started the grinder, the wheel exploded, . sending shrapnel into Kroemer' s face and left eye. Kroemer was wearing safety glasses but not a face shield. Mter undergoing three surgeries, Kroemer ultimately sustained a 95-percent loss of vision in his eye. Due to the injury, Kroemer no longer physically qualified for a com,mercial driver's license. He returned to work with Ribbon Weld, but had restrictions of light-duty work and no dusty conditions. Ribbon Weld subsequently sold its business, and Kroemer lost his employment a short time later. .

The district court received evidence concerning the value of Kroemer's case. One expert opined that "there was a very substantial probability (80%-90%) of a jury verdict for the defendants were the case to proceed to trial." He stated that a jury could have easily determined that Kroemer's comparative fault was greater than 50 percent. Another expert valued Kroemer's

- 3 -

claim in the range of $850,000 to $1,250,000, before consideration of comparative negligence. But he also opined that the settlement of $150,000 was in Kroemer's best interests, due to the high probability of a jury verdict for the defendants. Ribbon Weld's expert opined that it was "more than likely (70-80% chance) that a Plaintiff's verdict would be reached," that a jury would likely assess "contributory negligence" in the range of 25 to 35 percent, and that Kroemer would have likely recovered in excess of $500,000 if the case proceeded to trial. Ribbon Weld's expert believed that the settlement was inadequate given the value of the case and that the settlement appeared to have been accepted with the intention of no, or very minimal, payback to Ribbon Weld of the subrogation amount.

The district court determined that the settlement of $150,000 was reasonable. It made the following allocation: $94,834.27 to Kroemer, $55,165.73 for attorney fees and expenses, and $0 to Ribbon Weld.

Ribbon Weld appealed, and we granted its petition to bypass review by the Nebraska Court of Appeals. We subsequently ordered supplemental briefing, which we have considered in resolving this appeal.

ill. ASSIGNMENTS OF ERROR

Ribbon Weld assigns that the district court erred in ( 1) finding the settlement to be fair and reasonable and (2) finding that an allocation of $0 to Ribbon Weld was fair and equitable.

IV. STANDARD OF REVIEW

[1] Statutory interpretation presents a question of law, for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below. 1

[2,3] Distribution of the proceeds of a judgment or settlement under § 48-118.04 is left to the trial court's discretion and reviewed for an abuse of that discretion.2 A judicial abuse of discretion requires that the reasons or rulings of a trial judge be clearly untenable, unfairly depriving a litigant of a substantial right and a just result.3

V.ANALYSIS

!.OVERVIEW

[4,5] We frrst set forth two principles of law under the Nebraska Workers' Compensation Act (the Act).4 First; § 48-118 grants an employer who has paid workers' compensation benefits to an employee injured as a result of the actions of a third party a subrogation interest against payments made by the third party.5 Second, a settlement of ·a third-party claim is void under

1 Estermann v. Bose, ante p. 228, 892 N.W.2d 857 (2017). 2 Burns v. Nielsen, 273 Neb. 724, 732 N.W.2d 640 (2007).

3 /d. 4 Neb. Rev. Stat.§§ 48-101 to 48-1,117 (Reissue 2010 & Cum. Supp. 2016). 5 Burns v. Nielsen, supra note 2.

- 4 -

§ 48-118.04(1) unless the settlement is either agreed upon in writing by the employee and employer (or its insurer) or determined by the court to be fair and reasonable. We now turn to the assigned errors.

2. FAIRNESS AND REASONABLENESS OF SETILEMENT

[ 6] Ribbon Weld first challenges the amount of the settlement. In determining the fairness and reasonableness of a settlement of a third-party claim under the Act, the court considers "liability, damages, and the ability of the third person and his or her liability insurance carrier to satisfy any judgment."6 We examine these factors in reverse order.

(a) Ability to Satisfy Ju~gment

The record does not contain much evidence as to OTE' s ability to satisfy the judgment. Kroemer testified that the proposed settlement of $150,000 did not reflect the limits of OTE's insurance policy. Accordingly, the ability of OTE and its liability insurance carrier to pay was not an impediment to a greater settlement.

(b) Damages

The estimated damages in this case were significant. Kroemer sustained a 95-percent loss of vision in his left eye. Kroemer' s expert valued Kroemer' s claim between $850,000 to $1,250,000. Ribbon Weld's expert agreed with an assessment of damages set forth in a demand letter valuing the case at $858,989.86.

(c) Liability

Under the facts of this case, the deciding factor ori the reasonableness of the settlement is the issue of liability. Kroemer's two experts opined that there was a high probability of a jury verdict in favor of OTE. Ribbon Weld's expert, on the other hand, opined that it was "more than likely" a jury would return a verdict in Kroemer' s favor and that the jury would assess contributory negligence in the range of 25 to 35 percent.

Evidence reflected negligence on Kroemer' s part. Kroemer planned to hold the Allen wrench with pliers because the vice on the table was in use. He knew that using the vice would have been safer, and he testified that he would not have been injured if a vice were used. Kroemer believed Ribbon Weld's rules or regulations required use of safety glasses and a face shield when using a hand grinder. But he was not wearing a face shield. As the supervisor, it was Kroemer' s responsibility to make sure his crew wore safety glasses and a face shield. Kroemer testified that when a member of his crew used a hand grinder, a guard was required to be affiXed to the grinder. He did not recall seeing a Ribbon Weld grinder without a guard. A guard protects the operator from being struck by flying debris generated from using the grinder. But the grinder selected by Kroemer's coworker did not have a guard.

Other evidence lessened the effect of Kroemer' s own negligence. On an earlier occasion, an OTE shop foreman told Kroemer that OTE employees usedthe same grinder without a guard. That foreman also told Kroemer that they used a 7-inch wheel on a 4-inch grinder. Although a

6 § 48-118.04(1)(b).

-5-

person using a hand grinder should wear a face shield, Kroemer was not the person doing the grinding. Further, Kroemer did not select the grinder. And Ribbon Weld points out that a guard may not have prevented the injury because Kroemer was injured as a result of the tool's exploding--not by any debris resulting from grinding. Kroemer testified that it was possible he would have been injured even if the grinder had a guard, but that his injury would have been less likely if the grinder had a guard.

(d) Resolution

After consideration of the relevant factors, we cannot say that the district court abused its discretion in fmding the settlement to be fair and reasonable. Although there was potential for a large verdict in Kroemer's favor, he accepted a greatly reduced settlement due to concerns that he would receive nothing if a jury determined that his comparative negligence was 50 percent or more. We cannot fault him for declining to take this gamble.

3. ALLOCATION OF SETILEMENT PROCEEDS

Ribbon Weld argues that the district court abused its discretion in allocating none of the proceeds of Kroemer's $150,000 settlement to Ribbon Weld. We observe at the outset that Ribbon Weld does not contend the court abused its discretion in awarding $55,165.73 for attorney fees and expenses. At the hearing, Ribbon Weld's counsel stated that ''whatever the settlement level is, we do believe that it was obtained by [Kroemer's counsel], and attorney fees and costs are simply not an issue in this case." Thus, our review in this case focuses on the allocation of $94,834.27 to Kroemer and of $0 to Ribbon Weld.

(a) Overview

When an employee injured as a result of a third person's tortious conduct receives compensation from his or her employer and from the tort-feasor, an issue arises as to how to divide any proceeds obtained from the third party. '"The obvious disposition of the matter is to

give the employer so much of the negligence recovery as is· necessary to reimburse it for its compensation outlay, and to give the employee the excess."7 Doing so prevents a double recovery by the employee. "Under most subrogation statutes the payor of compensation gets reirilbursement for the amount of its expenditure as a first claim upon the proceeds of the third-party recovery, and the employee gets the excess."8 But since 1994, our Legislature has rejected that approach. Our statute clearly mandates that proceeds in excess of the employer's subrogation interest must be paid forthwith to the employee.9 But how the remaining proceeds should be divided does not automatically allocate first claim to the employer.

At least two states have statutes that reject the employer-frrst approach and yet provide for a fully or partially guaranteed allocation to the employee. Wisconsin mandates that after deducting the reasonable cost of collection, the injured employee receives, at a minimum,

7 10 Arthur Larson et al., Larson's Workers' Compensation Law§ 110.02 at 110-3 (2016). 8 Jd., § 117.01[1] at 117-2 .

• 9 See§ 48-118.

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one-third of the amount recovered. 10 In Georgia, a statute provides that an employer or insurer may recover on its subrogation lien only "if the injured employee has been fully and completely compensated, taking into consideration both the benefits received under this chapter and the amount of the recovery in the third-party claim, for all economic and noneconomic losses incurred as a result of the injury."11 We have described the latter concept as the "made whole" doctrine. 12

Nebraska's current statute rejects both the "first claim" and the "made whole" doctrines. Under§ 48-118.04(2), the trial court is required to "order a fair and equitable distribution of the proceeds of any judgment or settlement." The distribution is left to the court's discretion and "simply requires the court to determine a reasonable division of the proceeds among the parties."13 Prior to a 1994 amendment to § 48-118!4 "employers and insurers were subrogated 'dollar for dollar' in any recovery against a third-party tort-feasor."15 But through the amendment, employers and insurers were "subrogated for the amount judicially determined to be a fair and equitable division of the settlement under the circumstances."16 We have determined that "[t]here is no indication, either in the statutory language or the legislative history, that § 48-118.04 was intended to infringe on the right of subrogation guaranteed by§ 48-118 beyond the extent necessary to effectuate a reasonable settlement."17 We have also stated that a fair and equitable distribution does not require that an employee be "made whole" or that tort proceeds be split proportionately. 18

(b) Bacon v. DBUSAIA.

[7] We discussed the purposes of the Act vis-a-vis workers' compensation subrogation in Bacon v. DBUSAIA.19 We explained that "the beneficent purposes of the Act concern the employee's ability to promptly obtain workers' compensation benefits--not the employee's ability to additionally retain recovery against negligent third parties in tort actions!'20 We found ''no reason to conclude that the beneficent purposes of the Act require us to narrowly interpret the employer's statutory subrogation rights. "21 Rather, we determined that "the policies behind

10 See Wis. Stat. Ann.§ 102.29(1)(b) (West Cum. Supp. 2016). 11 Ga. Code Ann.§ 34-9-11.1(b) (2008). 12 See Turco v. Schuning, 271 Neb. 770, 716 N.W.2d 415 (2006). 13 See Burns v. Nielsen, supra note 2, 273 Neb. at 735, 732 N.W.2d at 650. 14 See 1994 Neb. Laws, L.B. 594.

ts Turney v. Werner Enters., 260 Neb. 440,446,618 N.W.2d 437,441 (2000). 16 !d. at 446, 618 N.W.2d at 442. 17 Burns v. Nielsen, supra note 2, 273 Neb. at 732, 732 N.W.2d at 648. 18 See Turco v. Schuning, supra note 12. 19 Bacon v. DBIISALA, 284 Neb. 579,822 N.W.2d 14 (2012). 20 ld. at 588, 822 N.W.2d at 24.

21 ld.

- 7 -

the Act favor a liberal construction in favor of the employer's statutory right to subrogate against culpable third parties."22 In an effort to balance the rights of injured employees against the costs to employers, most workers' compensation acts "liberally allow employers to shift liability onto third parties whenever possible. "23 We iterated that "§ 48-118 was enacted 'for the benefit of the employer'"24 and that where a third party negligently causes the employee's injury, "'employers who are required to compensate employees for injuries are intentionally granted a measure of relief equivalent to the compensation paid and the expenses incurred.' "25

(c) In re Estate of Evertson

Recently, the Court of Appeals affirmed an allocation of zero to a workers' compensation carrier in In re Estate of Evertson. 26 In that case, the carrier claimed a subrogation interest in the entire $250,000 settlement allocated to the victim's surviving spouse. The county court found that a fair and equitable distribution was for the spouse to receive $207,416.69, for the attorneys to receive $42,583.31, and for the carrier to receive nothing.

In affmning the county court's distribution, the Court of Appeals set out the factors considered by the county court. The Court of Appeals noted that the county court considered the victim's lengthy marriage and "factors such as that [the workers' compensation carrier] had charged and received the necessary premiumS to provide workers' compensation coverage . . . and that under all the circumstances, [the workers' compensation carrier's] financial risk was minimal and insurance companies are in the business of assuming risk. "27 The Court of Appeals disagreed with the carrier's "assessment that the county court was considering an equitable assessment in considering there was no evidence that [the workers' compensation carrier] helped finance the settlement. "28 Instead, the Court of Appeals stated that "the county court's language indicates that the court was considering that [the workers' compensation carrier] did not expend any funds in securing the settlement."29 Ultimately, the CoUrt of Appeals could not say that the county court abused its discretion in distributing the settlement proceeds.

We granted further review in In re Estate of Evertson. But because we determined that the county court lacked subject matter jurisdiction to hear and decide the subrogation matter, we did not reach the merits of the appeal--which included the carrier's assignment that the Court of Appeals erred in affrrming a distribution that was not fair and equitable. 30

22 /d.

23 ld

24 /d.

'25 ld

26 In re Estate of Evertson, 23 Neb. App. 734, 876 N.W.2d 678 (Z016), vacated on other grounds 295 Neb. 301, 889 N.W.2d 73.

27 /d. at 741, 876 N.W.2d at 684.

21!. Id

29 /d.

30 See In re Estate of Evertson, 295 Neb. 301, 889 N.W.2d 73 (2016).

- 8 -

•

In the instant case, the district court clearly relied on the Court of Appeals' decision in In re Estate of Evertson in making its distribution. After reciting the above-quoted language from In re Estate of Evertson, the court stated that it considered the nature of Kroemer's loss, the substantial damages he suffered, the insurer's charging and receiving a premium of nearly $175,000 for the insurance coverage, and the "comparative risk to the insurance carrier versus Kroemer." But neither the district court in the instant case nor the Court of Appeals in In re Estate of Evertson considered the effect of our decision in Bacon.

The reasoning in In re Estate of Evertson is flawed for several reasons. First, the payment of premiums for workers' compensation coverage is not an appropriate factor to consider in distributing proceeds recovered from a third party. ''The ... Act requires, with few exceptions, that every employer carry workers' compensation insurance. "31 Thus, an employer (or its insurer) should not be stripped of its statutory subrogation right for obtaining such insurance.

Second, the comparative risk between an insurance company and employee is likewise an inappropriate factor. Every insurance company is in the business of assuming risk. Consideration of this factor would nearly always elevate the employee's right to the proceeds over that of the employer or its insurer.

Third, in making a distribution of the recovery, consideration of an employer's or its insurer's participation in obtaining the settlement is suspect. The statutes give the employer or its insurer the option to actively prosecute its subrogation claim or to allow the employee to prosecute the claim and then obtain a 'portion of the recovery and share in the expenses.32 An employer's (or its insurer's) right to reimbursement is pres~rved even if it selects the latter option.

Fourth, the county court and Court of Appeals gave short shrift to the right of the employer or its insurer to recover on its subrogation interest. We have stated that § 48-118 "encourag[es] prompt payment of benefits, even when a third party is liable for the injury, by providing an employer or insurer with the means to recover at least a portion of its payout."33

The lower courts in In re Estate of Evertson did not allow the insurer to recover any of its payout. Frankly, it is difficult to imagine a situation in which an allocation of $0 to an employer or insurer with a sizable subrogation interest would be a fair and equitable distribution of proceeds.

[8] We disapprove the Court of Appeals' decision in In re Estate of Evertson34 to the extent that the court considered payment of premiums and comparative risk in allocating none of the proceeds of the settlement to the insurer.

(d) Distribution in Instant Case

[9] The district court's distribution in this case ignored Ribbon Weld's statutory right to subrogation. Under § 48-118, Ribbon Weld is entitled to "reimbursement, under the right of

31 Travelers Indemnity Co. v. International Nutrition, 273 Neb. 943, 945, 734 N.W2d 719, 722 (2007). 32 See, generally,§§ 48-118 to 48-118.03 (Reissue 2010). 33 Bums v. Nielsen, supra note 2, 273 Neb. at 733,732 N.W.2d at 649. 34 In re Estate of Evertson, supra note 26.

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subrogation, of any compensation paid." Instead, the court allocated nothing to Ribbon Weld.) Although the court did not explicitly use "made whole" language, it essentially applied a "made whole" formulation when it denied Ribbon Weld any recovery. We have found error when a trial court concluded that the worker had to be "made whole" before the subrogated compensation carrier was entitled to any portion of the settlement. 35 And although the statute calls for a "fair and equitable distribution,"36 subrogation in workers' compensation cases is based on statute, and not in equity.37

[10] The district court appeared to focus on a distribution that would be equitable only to Kroemer. But the distribution must be ''fair and equitable"38 to both the employee and the employer or its insurer. Although Kroemer's damages may have been worth over $800,000, Ribbon Weld paid over $200,000 in workers' compensation benefits to Kroemer for an accident for which OTE was liable. Ribbon Weld was entitled to some portion of Kroemer' s settlement · with OTE. The court's denial of the same was untenable and must be reversed. But we review a district court's allocation for abuse of discretion, and thus, it is not for us to dictate a fair and equitable distribution in the first instance.

VI. CONCLUSION

Under the circumstances, the district court did not abuse its discretion in determining that the amount of Kroemer' s settlement with OTE was fair and reasonable. We affirm that part of the court's order. But we conclude that the district court did abuse its discretion in not allocating any of the settlement proceeds to Ribbon Weld. Accordingly, we reverse that portion of the court's order and remand the cause to the district court with direction to make a fair and equitable distribution between Kroemer and Ribbon Weld of the remaining $94,834.27 of the settlement proceeds.

HEAVICAN, C.J., not participating.

AFFIRMED IN PART, AND IN PART REVERSED

AND REMANDED WITH DIRECTION.

35 See Turco v. Schuning, supra note 12. See, also, Sterner v. American Fam. Ins. Co., 19 Neb. App. 339, 805 N.W.2d 696 (2011).

36 § 48-118.04(2). 37 See Burns v. Nielsen, supra note 2. 38 § 48-118.04(2).

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. I·

I

IN L __ ~.......-....~~..,...........,:..-- .--,-____.LAS COUNTY, NEBRASKA

NORMAN KROEMER, ) Cl14-8741 )

Plaintiff, ) ) AMENDED

vs. ) ORDER NUNC PRO TUNC

OMAHA TRACK EQUIPMENT, LLC, THE TIE YARD OF OMAHA, INC. N/KIA OMAHA TRACK, INC., and RIBBON WELD, LLC,

Defendant.

) ) )

) )

OCT 0 3 2017

THIS MATIER CAME before the Court for hearing on remand from the Nebraska

Supreme Court (Kroemer v. Omaha Track Equipment. et al, 296 Neb. 972 (2017)).

Plaintiff Norman Kroemer appeared with counsel, Ronald Brown and Defendant

Ribbon Weld, LLC (Ribbon Weld) appeared through counsel, Julie Jorgensen. Defendant

Omaha Track Equipment, LLC., appeared through counsel, Greg Schriber.

In Kroemer, the Nebraska Supreme Court affirmed in part, in part reversed, and

remanded with direction, the Order of this Court entered on August 10, 201(), approving the

settlement between Mr. Kroemer and Omaha Track Equipment which allocated zero dollars to

Ribbon Weld, the former employer of Mr. Kroemer.

The Nebraska Supreme Court stated, in relevant part:

Recently, the Court of Appeals affirmed an allocation of zero to a workers' compensation carrier in In re Estate of Evertson. In that case, the carrier claimed a subrogation interest in the entire $250,000 settlement allocated to the victim's surviving spouse. The county court found that a fair and equitable distribution was for the spouse to receive $207,416.69, for the attorneys to receive $42,583.31, and for the carrier to receive nothing.

In affirming the county court's distribution, the Court of Appeals set out the factors considered by the county court. The Court of Appeals noted that the county court considered the victim's lengthy marriage and "factors such as that [the workers' compensation carrier] had charged and received the necessary premiums to provide workers' compensation coverage ... and that under all the circumstances, [the workers' compensation carrier's] financial risk was minimal and insurance companies are in the

1

• I I I

---·-- -·-- "' . .

business of assuming risk." The Court of Appeals disagreed with the carrie~s "assessment that the county court was considering an equitable assessment in considering there was no evidence that [the workers' compensation carrier] helped finance the settlement." Instead, the Court of Appeals stated that "the county court's language indicates that the court was considering that [the workers' compensation carrier] did not expend any funds in securing the settlement." Ultimately, the Court of Appeals could not say that the county court abused its discretion in distributing the settlement proceeds.

We granted further review in In re Estate of Evertson. But because we determined that the county court lacked subject matter jurisdiction to hear and decide the subrogation matter, we did not reach the merits of the appeal-which included the carrier's assignment that the Court of Appeals erred in affirming a distribution that was not fair and equitable.

In the instant case, the district court clearly relied on the Court of Appeals' decision in In re Estate of Evertson in making its distribution. After reciting the above-quoted language from In re Estate of Evertson, the court stated that it considered the nature of Kraemer's loss, the substantial damages he suffered, the insurer's charging and receiving a premium of nearly $175,000 for the insurance coverage, and the "comparative risk to the insurance carrier versus Kroemer." But neither the district court in the instant case nor the Court of Appeals in In re Estate of Evertson considered the effect of our decision in Bacon.

The reasoning in In re Estate of'Evertson is flawed for several reasons. First, the payment of premiums for workers' compensation coverage is not an appropriate factor to consider in distributing proceeds recovered from a third party. 'The ... Act requires, with few exceptions, that every employer carry workers' compensation insurance." Thus, an employer (or its insurer) should not be stripped of its statutory subrogation right for obtaining such insurance.

Second, the comparative risk between an insurance company and employee is likewise an inappropriate factor. Every insurance company is in the business of assuming risk. Consideration of this factor would nearly always elevate the employee's right to the proceeds over that of the employer or its insurer.

Third, in making a distribution of the recovery, consideration of an employe~s or its insure~s participation in obtaining the settlement is suspect. The statutes give the employer or its insurer the option to actively prosecute its subrogation claim or to allow the employee to prosecute the claim and then obtain a portion of the recovery and share in the expenses. An employer's (or its insure~s) right to reimbursement is preserved even if it selec~ the latter option.

Fourth, the county court and Court of Appeals gave short shrift to the right of the employer or its insurer to recover on its subrogation interest. We have stated that § 48-118 "encourag[es] prompt payment of benefits, even when a third party is liable for the injury, by providing an employer or insurer wi~h the means to recover at least a portion

2

•.· ~ .

of its payout." The lower courts in In re Estate of Evertson did not allow the insurer to recover any of its payout. Frankly, it is difficult to imagine a situation in which an allocation of $0 to an employer or insurer with a sizable subrogation interest would be a fair and equitable distribution of proceeds.

We disapprove the Court of Appeals' decision in In re Estate of Evertson n34 to the extent that the court considered payment of premiums and comparative risk in allocating none of the proceeds of the settlement to the insurer.

(d) Distribution in Instant Case

The district court's distribution in this case ignored Ribbon Weld's statutory right to subrogation. Under § 48-118, Ribbon Weld is entitled to "reimbursement, under the right of subrogation, of any compensation paid." Instead, the court allocated nothing to Ribbon Weld. Although the court did not explicitly use "made whole" language, it essentially applied a "made whole" formulation when it denied Ribbon Weld any recovery. We have found error when a trial court concluded that the worker had to be "made whole" before the subrogated compensation carrier was entitled to any portion of the settlement. And aHhough the statute calls for a "fair and equitable distribution," subrogation in workers' compensation cases is based on statute, and not in equity.

The district court appeared to focus on a distribution that would be equitable only to Kroemer. But the distribution must be "fair and equitable" to both the employee and the employer or its insurer. Although Kraemer's damages may have been worth over $800,000, Ribbon Weld paid over $200,000 in workers' compensation benefits to Kraemer for an accident for which OTE was liable. Ribbon Weld was entitled to some portion of Kraemer's settlement with OTE. The court's denial of the same was untenable and must be reversed. But we review a district court's allocation for abuse of discretion, and thus, it is not for us to dictate a fair and equitable distribution in the first instance.

Under the circumstances, the district court did not abuse its discretion in determining that the amount of Kraemer's settlement with OTE was fair and reasonable. We affirm that part of the court's order. But we conclude that the district court did abuse its discretion in not allocating any of the settlement proceeds to Ribbon Weld. Accordingly, we reverse that portion of the court's order and remand the cause to the district court with direction to make a fair and equitable distribution between Kroemer and Ribbon Weld of the remaining $94,834.27 of the settlement proceeds.

ld at 982-986. (Footnotes omitted)

Of course, this Court did consider, as one factor, the substantial premium paid to

Ribbon Weld's insurer in determining the equitable allocation of the settlement proceeds.

3

The Court also considered factors .such as Mr. Kraemer's almost total loss of vision in

his left eye, his damages of $850,000 and the fact that Ribbon Weld's insurer did nothing to

help Mr. Kraemer recover the $150,000. This Court went on to allocate zero to Ribbon Weld.

In any case, the Nebraska Supreme Court has made it clear, at least ''under the

circumstancesn of this case, that it is "untenable" to allocate nothing to Ribbon Weld's insurer.

However, as counsel for both parties have pointed out in their arguments to this Court on

remand, the Nebraska Supreme Court has thus far declined to establish any substantive

guidelines, elements or tests to determine the fair and equitable allocation. of the settlement

proceeds. Mr. Kroemer's counsel suggests a $2,500-$5,000 award to Ribbon Weld is

equitable. Ribbon Weld's counsel suggests that at least one third of the settlement proceeds

be awarded to Ribbon Weld. Neither party has been able to cite to any tangible factors for their

respective positions but not for any lack of trying.

Ribbon Weld's insurer has paid $207,555.01 to Mr. Kraemer. Both parties agree that

Mr. Kraemer's damages are $850,000 or more. Simple mathematical calculations reveal that

Mr. Kraemer's recovery thus far is about 24.4% of his probable damages. There remains an

additional $94,834.27 that needs to be fair and equitably divided between the parties. The

Court finds that Mr. Kroemer should receive 75.6% of the remaining funds, $71,694.71 and

Ribbon Weld shall receive 24.4% of the proceeds, $23,139.56. I •

I ~~:· -: . } ~b~CLU!ION I • . : ,cq.'1z

The Court finds that the fair and' equitable allocation to be as follows: /.. . .. ;·i Normaii-:Kroemer $71,694.71

• •, I' • .;,,,/1.::,/ ;~·:o.

Ribbon Weld/Hartford $23,139.56

DATED THIS 2ND DAY OF OCTOBER, 2017.

N-lllt'-1'-' .. , .... LL DERR DISTRICT COURT JUDGE

4

The Counsel for Discipline’s Advice for Workers’

Compensation Attorneys John W. Steele

Assistant Counsel for Discipline


10/31/2017

1

John W. SteeleAssistant Counsel for Discipline

2017 Annual Workers Compensation Seminar

The Disciplinary ProcessCounsel for Discipline

FILING OF COMPLAINT

PRIVATE REPRIMAND

TRIALREFEREECOURT

APPOINTED

Rule 9(c) –Preliminary Inquiry

DISMISSAL ‐

NO APPEAL

Decline to Investigate

GRIEVANCE LETTER

FORMAL CHARGES

FORMAL GRIEVANCE

DISMISSAL

COUNSEL FOR DISCIPLINE FLOWCHART

NEBRASKA SUPREME COURT

AFTER INVESTIGATION –NO GROUNDS FOR

DISCIPLINE

APPEALDISCIPLINARY

REVIEW BOARD

COMMITTEE ON INQUIRY

UPGRADE

10/31/2017

2

Responding to a Disciplinary Complaint

• The importance of the respondent attorney’s response cannot be overstated

• Considerations1. BE HONEST!

2. Respond timely3. Consider hiring an attorney4. Be thorough to avoid follow‐ups

a) Answer all allegationsb) Be definitivec) Do factual research before responding

5. Consider Restitution6. Expression of insight7. Be civil

What not to do

1. Persuade someone not to file a grievance, or persuade the grievant into withdrawing the grievance.

2. Sue or threaten to sue the grievant:

We conclude there was clear and convincing evidence that Wright violated § 3–508.4(d) by writing the letter… a plain reading of that letter indicates the letter was intended to do exactly what the Counsel for Discipline is alleging in this action—threatening to sue if the grievance was not withdrawn. Such is contrary to § 3–322(A), which states that reports of alleged misconduct are absolutely privileged and that no lawsuit may be predicated upon such reports. We therefore find that there is clear and convincing evidence of a violation of § 3–508.4(d).

See, State ex rel Counsel for Discipline v. Wright, 277 Neb. 709 (2009).

3. NIXON RULE: A cover‐up is almost always worse than the alleged misconduct.

4. Don’t freeze or ignore it (you must cooperate or you will be suspended and more charges will come).

5. Lose sight of civility – Especially with our office!!!

10 Ways to Avoid Meeting Bar Counsel

1. Return all calls from clients within 24 hours or leave a message telling them when you will.

2. Don’t ransom the file or money belonging to the client.

3. Never notarize a document unless the signing party is in front of you with ID.

4. “Watch out for the Dog”: It’s the case you hate, have been neglecting, and makes you sick when you think about it. Move it along or dump it – or it will come back to bite you!

5. Flood your client with paper/information so that she feels informed (See #1).

6. Get it in writing – fee agreements, notice of withdraws, fee payments from client accounts, engagement letters, disengagement letters, non‐engagement letters, (I don’t do dog bites, etc.), consents to conflicts of interest, and all settlement offers (especially those rejected against your advice).

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3

10 Ways to Avoid Meeting Bar Counsel (Cont.)

7. Don’t go into business with your client. If you must, tread carefully, read all conflicts rules, and advise the client in writing to confer with outside counsel. Confer with outside counsel yourself.

8. Pay. Your. Court. Reporters. Don’t make me write you!

9. Keep a Secret. Keep your client’s business confidential – even if you think everyone knows it anyway. Don’t bad mouth the client to their new counsel.

10. Be nice. While an AMA study found no correlation between actual malpractice and the filing of lawsuits (Hey – it was an AMA study after all), it did find that doctors who had strong interpersonal skills and built good relationships with patients were much less likely to be sued…

Formal

Summary…

9 (C)

Total

0

50

100

150

200

250

300

350

400

450

500

2011 2012 2013 2014 2015 2016 2017*

101 83 79 8036 43 26

131 147103 106 122

220

148

179 164 192 173 171 181 160

411 394374 359 329

489

334

Total Number of Grievances

*Through 10/1/17

8%

8%

12%

9%

8%

55%

2016 ‐ Grievances by Length of Practice of Attorney (years)

< 2

3‐5

6‐10

11‐15

16‐20

20+

10/31/2017

4

3%12%

11%

13%

11%

50%

2017 (9 mos) ‐ Grievances by Length of Practice of Attorney (years)

< 2

3‐5

6‐10

11‐15

16‐20

20+

4%

1%

22%

19%

12%

5%

5%

4%

4%2%3%

5%

6%8%

2016 ‐ Grievances by Area of Law Bankruptcy/Foreclosure

Corporate

Criminal

Domestic

Estate Planning/Probate

General Civil

Immigration

Personal Injury

Real Estate

Regulatory

Trust Account

Workers Compensation

Not Client Related

Other Case Type

3%

17%

22%

12%2%5%

9%

2%1%

12%

3%3%

9%

2017 (9 mos) ‐ Grievances by Area of LawCorporate

Criminal

Domestic

Estate Planning/Probate

General Civil

Immigration

Personal Injury

Real Estate

Regulatory

Trust Account

Workers Comp

Not Client Related

Other Case Type

10/31/2017

5

3%7% 1%

1%

2%6%

6%

5%

2%

9%

10%8%

23%

5%

6%5%

2%

2016 ‐ Characterization of GrievancesCommunication

Conflict of Interest

Confidentiality

Criminal Conduct

Discovery Abuse

Excessive Fees

Failure to Deliver Client File

Failure to Pay Fee Dispute

Failure to Pay Third Party

Incompetence

Interference with Justice

Misrepresentation/Fraud

Neglect

Other

Personal Conduct

Trust Violation

Unauthorized Practice

3%9%

3%2%

2%

8%

7%

6%

3%2%

7%3%

20%

8%

3%

13%1%

2017 (9 mos) ‐ Characterization of Grievances Communication

Conflict of Interest

Confidentiality

Criminal Conduct

Discovery Abuse

Excessive Fees

Failure to Deliver Client File

Failure to Pay Fee Dispute

Failure to Pay Third Party

Incompetence

Interference with Justice

Misrepresentation/Fraud

Neglect

Other

Personal Conduct

Trust Violation

Unauthorized Practice

Year Private Reprimands Public Reprimands Suspensions Disbarments

2004 17 7 17 5

2005 13 5 7 8

2006 14 0 13 8

2007 16 0 13 5

2008 22 4 13 2

2009 11 2 12 8

2010 18 1 5 6

2011 5 3 3 5

2012 10 5 10 5

2013 7 5 8 5

2014 10 0 8 5

2015 4 2 4 7

2016 5 3 2 4

2017 4 0 1 3

10/31/2017

6

WHAT’S NEW?

Mark Weber

Commission on Unauthorized Practice of Law

We now accept e‐filed complaints

Nebraska Ethics Advisory OpinionNo. 17-01

When a client file is closed, is it permissible to make an electronic copy of the file and then destroy the physical file immediately?

• The Nebraska Rules of Professional Conduct do not prohibit an attorney from keeping a closed client file in electronic form and immediately destroying the physical copy. However, several factors should be considered before a file is destroyed, such as whether it would be in the best interest of the client to keep the physical/paper copy and whether physical/paper copies of documents will be needed to satisfy the original document rule.

Nebraska Ethics Advisory Opinion No. 17‐02

Nebraska Ethics Advisory Opinion for Lawyers No. 13‐02 is

modified and amended. A Nebraska licensed attorney, acting

as a private mediator but who is not certified under the

Nebraska Parenting Act, would NOT be per se prohibited

from mediating custody, parenting time, parenting

functions, or support matters under Chapter 30 and 42

because that Attorney would therefore not be a mediator

“involved in proceedings” if a proceeding has not been filed.

10/31/2017

7

NEBRASKA ETHICS ADVISORY OPINION No. 17-03

A. May an attorney receive digital currencies such as bitcoin as payment for legal services?

YES

B. May an attorney receive digital currencies from third parties as payment for the benefit of a client's account?

YES

C. May an attorney hold digital currencies in trust or escrow for clients?

YES

THE FUTURE OF REGULATION ‐PMBR

Proactive Management Based Regulation

Education before Prosecution

Proactive – Involves the Attorney/Firm Investing in the Process – And Being Honest with Me

Atty/Firm Takes a “Self‐Assessment” Exam – What areas of Practice Need Support? Trust Accounting Conflicts Checks Calendaring/Backup Practice/Office Management

Much Like Malpractice Insurance Underwriting

Attys/Firms who Have Malpractice Insurance are Exempt

IF you take the Self‐Assessment and F/U with C4D/NSBA Assistance – YOU ARE EXEMPT FROM PROSECUTION!

PMBR ‐ CONTINUED

Recent NLAP Evaluation by CoLap (Like C4D Audit in 2014)

Continue Work on Alco/Drug Dependency Issues (We were one of the First)

Explore Increasing Demand Re: Aging/Disability/Impairment/Diminished Capacity Issues

Increase C4D Discretion/Autonomy for Minor Offenses – 1st Offense DUI…

Create Programs for Referral to Diversion/Probation

Request Contract/Waiver of Confidentially so I know you were Successful – Or Not

Amnesty with C4D if Complete the Program or Discharged b/c No Issues

Prosecution ONLY if you Fail…

10/31/2017

8

NRPC § 3‐501.1. Competence

A lawyer shall provide competent representation to a client. Competent representation

requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for

the representation.

Comment

[8] To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the

law and its practice, including the benefits and risks associated with relevant technology, engage

in continuing study and education, and comply with all continuing legal education requirements to

which the lawyer is subject

Responding to clients via text, instant message, e‐mail, etc.

• Risky business.

• You don’t know who as access to their electronic accounts: spouses, lovers, children, employers, etc.

• If they are on a secure account, then not as risky.

• Encryption? Possibility. But if your client is from another country and returns home for whatever reason, encryption may be illegal in their country. See, Iowa Ethics Opinion 11‐01.

NRPC § 3‐501.4. Communication

(a) A lawyer shall:

(1) promptly inform the client of any decision or circumstance with respect to which the

client’s informed consent, as defined in rule 32:1.0(e), is required by these rules;

(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to

make informed decisions regarding the representation.

10/31/2017

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NRPC § 3-501.6. Confidentiality of information(a) A lawyer shall not reveal information relating to

the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b).

(b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary:

(4) to comply with other law or a court order.

Nebraska Ethics Avisory OpinionNo. 09-09A lawyer may not reveal information concerning a life‐threatening or debilitating health condition of a client to an adverse party or attorney in the absence of informed consent by the client or a valid court order where the client’s interests have been protected within the bounds of the law.

Nebraska Ethics Advisory OpinionNo. 09-10

A lawyer who assists an undocumented alien in

obtaining workers compensation benefits must balance

his obligation to protect his client’s undocumented

status against his obligation of candor to a tribunal.

10/31/2017

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§ 3‐504.2. Communication with person represented by counsel.

• In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.

Nebraska Ethics Advisory OpinionNo. 91-3I. As counsel for a plaintiff, an attorney may not ethically interview present or former employees of a defendant corporation if:

(A) the employees are officers or management employees, or employees whose statements may bind the corporation in a legal sense.

II. Before interviewing present or former employees not within the category as outlined in I.(A) above, the plaintiff’s attorney should:

(A) identify him/herself as an attorney for the plaintiff and identify the litigation so that the individual clearly understands counsel's role. If the prospective witness is privy to a privileged communication with defendant's counsel, plaintiff's counsel should not make inquiry concerning such privileged communication. Subject to the above, current employees may be interviewed concerning facts to which they were witness if their statements are not binding upon the corporation.

91-3 (cont’d)

(B) former employees may be interviewed, subject to the limitations set out above concerning privileged communication.

III. Plaintiff's counsel should not sanction the effort of an officer of the plaintiff corporation to prevent employees from talking with attorneys for the defendant if those employees fall within the permissible guidelines set forth above and it is the decision of the employees to talk with defendant's attorneys. A lawyer may not circumvent a disciplinary rule through the actions of another. See DR 1-102 (a) (2).

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§ 3-504.3. Dealing with unrepresented person

In dealing on behalf of a client with a person who is not represented by

counsel, a lawyer shall not state or imply that the lawyer is disinterested.

When the lawyer knows or reasonably should know that the unrepresented

person misunderstands the lawyer’s role in the matter, the lawyer shall

make reasonable efforts to correct the misunderstanding. The lawyer shall

not give legal advice to an unrepresented person, other than the advice to

secure counsel, if the lawyer knows or reasonably should know that the

interests of such a person are or have a reasonable possibility of being in

conflict with the interests of the client.

§ 3-503.1. Meritorious claims and contentions

A lawyer shall not bring or defend a proceeding, or assert or

controvert an issue therein, unless there is a basis in law and fact

for doing so that is not frivolous, which includes a good faith

argument for an extension, modification or reversal of existing law.

A lawyer for the defendant in a criminal proceeding, or the

respondent in a proceeding that could result in incarceration, may

nevertheless so defend the proceeding as to require that every

element of the case be established.

§ 3‐503.2. Expediting litigation.

In the lawyer’s representation of a client, a lawyer shall not file a suit, assert a

position, conduct a defense, delay litigation or take other action on behalf of the

client when the lawyer knows or when it is obvious that such action would serve

merely to harass or maliciously injure another.

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§ 3‐503.4. Fairness to opposing party and counsel.

A lawyer shall not:

(a) unlawfully obstruct another party's access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act;

b) falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law;

(c) knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists;

(d) in pretrial procedure, make a frivolous discovery request or fail to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party;

§ 3‐503.4 (cont’d)

(e) in trial, allude to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence, assert personal knowledge of facts in issue except when testifying as a witness, or state a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant or the guilt or innocence of an accused; or

(f) request a person other than a client to refrain from voluntarily giving relevant information to another party unless:

(1) the person is a relative or an employee or other agent of a client; and

(2) the lawyer reasonably believes that the person's interests will not be adversely affected by refraining from giving such information

§ 3‐503.5. Impartiality and decorum of the tribunal.

(a) A lawyer shall not:

(1) seek to influence a judge, juror, prospective juror or other official by means prohibited by law;

(2) communicate ex parte with such a person during the proceeding unless authorized to do so by law or court order;

(4) engage in conduct intended to disrupt a tribunal.

10/31/2017

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§ 3‐501.14. Client with diminished capacity(a) When a client's capacity to make adequately considered decisions in connection with a representation is diminished, whether because of minority, mental impairment or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client‐lawyer relationship with the client.

(b) When the lawyer reasonably believes that the client has diminished capacity, is at risk of substantial physical, financial or other harm unless action is taken and cannot adequately act in the client's own interest, the lawyer may take reasonably necessary protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian.

(c) Information relating to the representation of a client with diminished capacity is protected by Rule 1.6. When taking protective action pursuant to paragraph (b), the lawyer is impliedly authorized under Rule 1.6(a) to reveal information about the client, but only to the extent reasonably necessary to protect the client's interests.

§ 3‐501.5. Fees.• (b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client.

• (c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

§ 3‐501.5 (cont’d)

• (c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

10/31/2017

14

Neb. Rev. Stat.§48-108Employer's liability; claim for legal services or disbursements; lien; how established; paymentNo claim or agreement for legal services or disbursements in support of any

demand made or suit brought under the Nebraska Workers' Compensation Act

shall be an enforceable lien against the amounts to be paid as damages or

compensation or be valid or binding in any other respect, unless the same be

approved in writing by a judge of the Nebraska Workers' Compensation Court.

After such approval, if notice in writing be given the defendant of such claim or

agreement for legal services and disbursements, the same shall be a lien against

any amount thereafter to be paid as damages or compensation. When the

employee's compensation is payable by the employer in periodical installments,

the compensation court shall fix, at the time of approval, the proportion of each

installment to be paid on account of legal services and disbursements.

Lawyer represents plaintiff and settles a PI case with the insurance company. Lawyer gets a check for $100,000 of which she is owed $33,000 as her contingent fee. She also advanced $3,000 in costs. The insurance company check is made out to her and to her client.

10/31/2017

15

The lawyer and the client should endorse the check and deposit it into the trust account.

Neb. RPC 1.15(d) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person.

…a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.

When the lawyer knows the funds cannot be subtracted out then she disburses to herself.

Could become a big problem for lawyer if insurance company check is dishonored.

It could result in taking money from other clients.

This occurs far more than it should –ongoing record…?

Resist the temptation to be the good guy!

Lawyer represents client in workers’ compensation case. During the case the lawyer receives a letter from chiropractor saying he expects to get paid out of client’s settlement. Case settles with check to client and lawyer for $50,000.

Client tells lawyer not to pay chiropractor.

10/31/2017

16

Worst thing lawyer can do is disburse all the money to client.

If client does not agree to disburse to doctor then the lawyer must take steps to resolve the dispute or implead the funds.

When in the course of representation alawyer is in possession of property inwhich two or more persons (one of whommay be the lawyer) claim interests, theproperty shall be kept separate by thelawyer until the dispute is resolved. Thelawyer shall promptly distribute allportions of the property as to which theinterests are not in dispute.

10/31/2017

17

Paragraph (e) also recognizes that third parties mayhave lawful claims against specific funds or otherproperty in a lawyer's custody, such as a client'screditor who has a lien on funds recovered in apersonal injury action. A lawyer may have a dutyunder applicable law to protect such third-partyclaims against wrongful interference by the client.In such cases, when the third-party claim is notfrivolous under applicable law, the lawyer mustrefuse to surrender the property to the client untilthe claims are resolved. A lawyer should notunilaterally assume to arbitrate a dispute betweenthe client and the third party, but, when there aresubstantial grounds for dispute as to the personentitled to the funds, the lawyer may file an actionto have a court resolve the dispute

Keep disputed portion - $1,000 in trust.

Disburse $300. Suggest means for prompt resolution

of the dispute, such as fee arbitration. Agree to Fee Arb. With client before

client files a complaint with C4D!

Neb. RPC 1.15(d) - upon request by the client or third person, [attorney] shall promptly render a full accounting regarding such property.

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State ex. Rel. Counsel for Discipline v. Rasmussen, 266 Neb. 100 (2003)The client asked the lawyer for an accounting of the funds that had been entrusted to him and requested a refund of the unused portion of the retainer. The respondent did not provided an accounting. The respondent's failure to account for the funds entrusted to him was a violation of Neb. DR 9-102, predecessor to Neb. RPC 1.15. Attorney Disbarred.

(a) A lawyer shall hold property of clients orthird persons that is in a lawyer'spossession in connection with arepresentation separate from the lawyer'sown property. Funds shall be kept in aseparate account maintained in the statewhere the lawyer's office is situated. Otherproperty shall be identified as such andappropriately safeguarded. Completerecords of such account funds and otherproperty shall be kept by the lawyer andshall be preserved for a period of 5 yearsafter termination of the representation.

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You must have the following: A record keeping system that identifies each trust

client. Records showing the source of all funds for

deposits for that client. Records showing the amount and description of all

withdrawals. Records showing the names of those to whom

money was disbursed. You must do a reconciliation no less than

QUARTERLY of each client ledger

Consider making your Trust Account checks a different color from Office Account.

Consider different numbering sequence for Trust Account checks vs. Office Account checks

Actual cancelled checks are no longer returned You must ask your Trust Account Bank to give

you copies

Tracks all checks written from account Tracks all deposits into account Keeps a running balance Maintain it up to date Sloppiness is RED FLAG

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Lists all transactions in trust account in separate client and administrative ledgers.

Deposits and withdrawals are recorded in general ledger.

Deposits and withdrawals for each client are recorded on each client ledger sheet.

Every transaction must be recorded.

QuickBooks Quicken Others Must be printable

Record paperless transactions in Check Register or General Ledger IOLTA interest receipts and payments Service charges Wire transfer fees Check printing charges Stop payment fees Returned check fees

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Balance on Bank Statement is same as that in General Ledger or Check Register with adjustments

In the example Bank Statement show $2,000.00 and so does the General Ledger

Each Client Ledger balance adds to the same balance as in the Bank Statement Bell - $700.00 Focker - $1,300.00 Total - $2,000.00

What if General Ledger shows balance of $3,500.68, and

Bank adjusted Bank Statement for Trust Account shows balance of $3,400.68.

Do not assume it is one error of $100. Could be two errors or three . . . .

Do not assume your bank has not made a mistake

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Fee agreements Copies of bills or statements sent to clients Bank statements Copies of checks

Ask for copies to be returned by bank Copies of deposit slips Deposit receipts Service charge notices Wire transfer fee notices

Keep copy in a file for all fee agreements

Keep copy in each client’s file Make sure you have a signed fee

agreementRequired in contingent fee matterBest Practice for ALL cases

A Lawyer in the firm should review the statement first before non-lawyer

After review give to person who has duty to balance

Make sure you get copies of checks back from bank

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Always keep a copy of the slip Multiple deposits on one slip Indicate clearly on back of slip to which client each deposit belongsBell - $2,500Focker - $2,500

Put a copy of slip in each client file

Disbursements for each client cannot be more that what is in that ledger.

Otherwise lawyer is taking from another client’s funds.

Lawyers who deal with cash need a cash receipts journal

Check register for Trust Account or for Office Account could serve as this journal

Give receipt to client or whomever pays in cash

Remember all cash payments for earned fees must be deposited in Office Account

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Lawyer must keep for 5 years after the event they record:

• Retainer agreements or contingent fee agreements,• Statements to clients,• Bills to clients, • Records of payments to experts, reporters, etc., and• Bank statements.• “Complete records of such account funds and other

property shall be kept by the lawyer and shall be preserved for a period of 5 YEARS after termination of the representation” Neb. RPC 1.15(a).

Nebraska Rule of Professional Conduct 1.16(d):

Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law.

Client File Retention – See Nebraska Advisory Opinion No. 12-07:

Client files may be destroyed after five years, butefforts should be put in place to make reasonableefforts to contact the client should beproportionate with the value of importance of thefiled materials which remain in the lawyer’spossession after the filed is closed.

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The Nebraska Rules of Professional Conductdo not prohibit an attorney from keeping aclosed client file in electronic form andimmediately destroying the physical copy.However, several factors should be consideredbefore a file is destroyed, such as whether itwould be in the best interest of the client tokeep the physical/paper copy and whetherphysical/paper copies of documents will beneeded to satisfy the original document rule.

Delegation of the duty to maintain trust account is not improper.

Lawyer must still know all the rules and requirements of trust accounts.

Lawyer must train and supervise personnel adequately.

Lawyer cannot just delegate and hibernate.

Neb. RPC Rule 5.3(b) mandates that “a lawyer having direct supervisory authority over the non-lawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer”

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o See, State ex rel. NSBA v. Statmore, 218 Neb. 138,142-43 (1984)

o “A lawyer's poor accounting procedures and sloppyoffice management are not excuses or mitigatingcircumstances in reference to commingled funds.”(Citations omitted.) Similarly, “[a]n attorney may notescape responsibility to his clients by blithely sayingthat any shortcomings are solely the fault of hisemployee. He has a duty to supervise the conduct ofhis office.”

You need to educate personnel who do your Trust Account books about your obligations to clients and third persons

Go over billing process with that person Go over trust account reconciliation Hiring a bookkeeper – get references if

possible

Lawyer must be directly involved in maintaining trust account.

Review monthly bank statements. Review trust account general ledger

and client ledgers monthly. Review copies of cancelled checks

monthly. Review reconciliation monthly.

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Are all image pages there? Are any checks written to odd payees? Are there checks that are not preprinted? Are there any changes to deposit slips

that are not explained? Any checks made out to cash? All advanced retainers deposited into

Trust Acct.?

Use of credit cards is manageable Where is money deposited?Trust AccountOffice Account

How are credit card fees handled? Can lawyer charge client for fee?Why not just make it an overhead cost figured in hourly or flat fee rate?

Do not write trust account checks to cash.

Do not get cash back on a deposit to trust account.

No ATM transactions on trust account. Use only pre-numbered checks. Read what staff asks you to sign. Do not sign trust account blank checks. Open bank statements yourself.

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TAN (“Trust Account Notice”) files at C4D. Many are opened – Few result in Formal Charges – (THIS MIGHT CHANGE!)

Even fewer have led to a formal proceeding againsta lawyer.

BUT - Don’t Forget Neb. RPC § 3-906:The Counsel for Discipline of the Nebraska SupremeCourt, or such counsel's representative authorized inwriting, shall have access to the affidavits requiredin § 3-905 and shall have the power to audit atany time any trust account required by theserules.

Professional Conduct Rule 1.5(a)“A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:◦ (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

◦ (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

◦ (3) the fee customarily charged in the locality for similar legal services;◦ (4) the amount of time involved and the results obtained;◦ (5) the time limitations imposed by the client or the circumstances;◦ (6) the nature and length of the professional relationship with the client;◦ (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

◦ (8) whether the fee is fixed or contingent.”

Well, what’s unreasonable?

1. Charging a nonrefundable fee. See State ex. Rel. Counsel for Discipline v. Wintroub, 277 Neb. 787 (2009).

2. Recycling old work product and rebilling subsequent clients for that same reused work. See ABA Formal Opinion 93-379.

3. Billing your clients for time expended on preparing their bill (or defending its reasonableness). See Estate of Inlow, 735 N.E.2d 240 (Ind. 2000).

4. Charging lawyer rates for clerical work. See State ex. Rel. Counsel for Discipline v. Huston, 262 Neb. 481 (2001).

5. Charging for work done after you were fired due to Conflict of Interest.See State ex. Rel. Counsel for Discipline v. Shapiro, 266 Neb. 328 (2003).

6. Charging for work done to undo your prior mistakes. See Zirkle, 911 N.E.2d 572 (Ind. 2009) .

7. Charging former clients for the time you had to spend responding to their grievances. See Zirkle, supra.

8. Not performing work on client’s files but transferring funds from trust to operating account. State ex. Rel. Counsel for Discipline v. Thebarge, 289 Neb. 356 (2014).

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More unreasonable fees…

9. Charging public defender clients for the representation. See Bass, 726 N.E.2d 1259 (Ind. 2000).

10.Charging client twice for work on one case – Fees deemed “excessive”. State ex. Rel. Counsel for Discipline v. Wright 277 Neb. 709 (2009).

11.Filing a lawsuit after settlement with insurer to increase fee from 25% to 33 & 1/3rd. State ex. Rel. Counsel for Discipline v. Miller, 258 Neb. 181 (1999).

12.Failing to reduce the amount of a contingency fee when collection of the fee under the original fee agreement gives the attorney an “unconscionable windfall.” Powell, 953 N.E.2d 1060 (Ind. 2011); see also Gerard, 634 N.E.2d 51 (Ind. 1994).

13.Taking the larger of a hourly versus contingent fee when your fee agreement is to the contrary. See Huston, supra.

14.Taking a contingency fee on funds promised in a settlement, but not actually received by your client. See Myers, 663 N.E.2d 771 (Ind. 1996).

15.Charging a fee greater than the presumptive limits established by statute or regulation. See Wright.

Other Fee Issues1. You must communicate the basis and rate of the fee either before the

representation begins or shortly thereafter. Prof. Cond. R. 1.5(b); see also Kray, 938 N.E.2d 218 (Ind. 2010).

2. All contingent fee agreements must be in writing. Prof. Cond. R. 1.5(c).

a) Fee agreements should be clearly worded and avoid legalese so that the agreements are easily understood by the client. See Lauter, 933 N.E.2d 1258 (Ind. 2010).

3. Renegotiation of the fee subject to Prof. Cond. R. 1.8(a).

Mediating Workers’ Compensation Case

Joe Grant, J.D. Prentiss Grant, LLC


Mediation of Civil Disputes in Nebraska

Mediation is a voluntary, informal process utilized by litigants to explore the possibility of settling civil disputes. This article addresses the laws governing mediation in Nebraska and provides suggestions to enhance the possibility of a successful mediation result.

Statutory Framework. Most mediations in Nebraska are governed by the Uniform Mediation Act found at Neb.Rev.Stat. §25-2930-2943. That Act applies to all mediations required by any court, administrative agency, or arbitrator, and to any mediation voluntarily agreed to by parties to a civil dispute. Exceptions include any disputes related to a collective bargaining agreement and rare instances in which parties may choose to mediate but not be bound by the Act's non-disclosure provisions.

Confidentiality. In all mediations conducted under the Uniform Mediation Act, all mediation communications are privileged, not subject to the discovery process, and not admissible at trial or arbitration unless agreed by all parties. The Act describes the term as follows:

Mediation communication rneans a statement, whether oral or in a record or verbal or nonverbal, that occurs during a mediation or is made for the purposes of considering, conducting, participating in, initiating, continuing, or reconvening a mediation or retaining a mediator.

The confidentiality provisions protect the mediator, a mediation party, ora nonparty participant in a mediation from being required to disclose any mediation communication. Caution: § 25-2933(c) provides that "evidence or information that is otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely by reason of its disclosure or use in a mediation." Thus, a mediation party's statement, "I ran the red light," is inadmissible in any subsequent proceeding, but a mediation party's statement, "I ran the red light and Frank Smith was there to witness it," clearly allows for follow-up investigation and discovery with regard to Frank Smith.

Exceptions to Confidentiality. § 25-2935 of the Uniform Mediation Act expressly provides that the following mediation communications are not privileged:

~. An agreement signed by all parties; 2. A record which is otherwise public, such as an "open" mediation to which the

open meetings law provisions require; 3· Threats to corn mit violent crimes; 4· Statements regarding the planning or concealment of crimes; 5· Statements claimed to prove or disprove professional misconduct or malpractice

ofthe mediator;

6. Statements related to a complaint of professional misconduct or malpractice against a mediation party based on conduct occurring during a mediation; or

Reporting of Mediations. The Act prohibits a mediator from communicating with a court, administrative agency, or other tribunal regarding mediations, except with regard to the most basic of information. Section 25-2936 allows a mediator to disclose "whether the mediation occurred or has terminated, whether a settlement was reached, and attendance." That section of the law also gives a mediator discretion to disclose additional communications which are not privileged.

Mandatory Disclosure of Conflicts of Interest. Under§ 25-2938, an individual asked to conduct a mediation must make a reasonable inquiry as to whether he or she has any conflict of interest which may affect impartiality. Conflicts must be disclosed as soon as possible.

Workers' Compensation Cases. The Nebraska Workers' Compensation Act scarcely addresses mediation. Section 48-~68 provides in part as follows:

(2)(a) The Nebraska Workers' Compensation Court may establish procedures whereby a dispute may be submitted by the parties, by the supplier of medical, surgical, or hospital services pursuant to§ 48-~20, or by the compensation court on its own motion for informal dispute resolution by a staff member of the compensation court or outside mediator. Any party who requests such informal dispute resolution shall not be precluded from filing a petition pursuant to § 48-~73. No settlement or agreement reached as the result of an informal dispute resolution proceeding shall be final or binding unless such settlement or agreement is in conformity with the Nebraska Workers' Compensation Act.

(b) Informal dispute resolution proceedings shall be regarded as settlement negotiations and no admission, representation, or statement made in informal dispute resolution proceedings, not otherwise discoverable or obtainable, shall be admissible as evidence or subject to discovery. A staff member or mediator shall not be subject to process requiring the disclosure of any matter discussed during informal dispute resolution proceedings. Any information from the files, reports, notes of the staff member or mediator, or other materials or communications, oral or written, relating to an informal dispute resolution proceeding obtained by a staff member or mediator is privileged and confidential and may not be disclosed without the written consent of all parties to the proceeding. No staff member or mediator shall be held liable for civil damages for any statement or decision made in the process of

dispute resolution unless *such person acted in a manner exhibiting willful or wanton misconduct.

(c) The compensation court may adopt and promulgate rules and regulations regarding informal dispute resolution proceedings that are considered necessary to effectuate the purposes of this section.

Section 48-~20 provides in part as follows:

Any dispute regarding medical, surgical, or hospital services furnished or to be furnished under this section may be submitted by the parties, the supplier of such service, or the compensation court on its own motion for informal dispute resolution by a staff member of the compensation court or an outside mediator pursuant to §48-~68.

Rule 48 of the Nebraska Workers' Compensation Court's Rules and Procedure addresses informal dispute resolution. The rule tracks the above cited statute, and also recognizes the provisions ofthe managed care statute addressed in §§48-120(9) and 48-~20.02. Note that the rule appears to apply only to "all informal means employed by the Court to resolve disputes or controversies." (Emphasis added.) In addition, Rule 48A provides that any party "may contact the court" to request informal dispute resolution. It appears that the rule applies strictly to instances in which the court is involved in the process, as compared to circumstances in which a private mediator is used without involvement of the court. The statutes quoted above may also be limited to informal dispute proceedings initiated through the court.

Typical Mediation Proceedings. While it may be inaccurate to state that there is a "typical" mediation proceeding, clearly any mediation is used to bring the parties together, allow them to state their positions to one another, and encourage earnest settlement negotiation. With that caveat, the following would describe a "typical" mediation in which the author has been involved over the years.

1. Written confirmation to parties to serve as mediator. The mediator ordinarily corresponds with the parties once retained, to confirm the terms of the engagement, set forth ground rules (which will be discussed below), and request background information on the dispute.

2. Introduction. Ordinarily, the mediator will begin the mediation proceedings by confirming that he or she has been agreed upon by the parties to act as mediator, explain the mediator's role, and set forth ground rules to be followed. This aspect ofthe proceeding will involve a discussion ofthe following:

o The role of the mediator is not that of a judge, but rather the mediator serves only to facilitate discussion of possible settlement.

o Statements of the mediator do not constitute legal advice, and are designed solely to promote continued discussion of settlement.

• The mediator will challenge both parties to explain or justify positions which they take; this should not be interpreted as a "judgment" of the case, but rather as an attempt on the part of the mediator to promote continued discussion of settlement.

o All aspects of the mediation are to be considered confidential, and no statements made by the parties or their attorneys in the course of the mediation will be offered by any party at a subsequent hearing or trial.

o The mediator will not be subject to process requiring disclosure of any matters discussed in the mediation, and the mediator's file is privileged and confidential and will not be disclosed without the consent of all parties; the mediator will not be required to respond to any subpoena served upon him or her.

o The mediator will not disclose information supplied by any party in private conferences without the express approval of such party.

3· Opening Statements By Counsel. These statements are typically discouraged as they can tend to polarize the parties. The potential problem is that zealous advocacy tend to do their best to argue their points. Depending on the dynamics of the case, these statements can be counterproductive.

4· Negotiations. Ordinarily the mediator separates the parties and begins a course of private discussions with each party, conveying demands, offers, and "messages" of the parties. These sessions are good opportunities for the mediator to try to defuse troublesome issues, challenge the parties, and encourage settlement with "messages" conveyed between the parties. For what it is worth, I usually provide frank discussion of the merits of the case and some of my past experiences involving the issues or the judges before whom the dispute is pending.

Tips on Maximizing the Potential Benefits of Mediation.

1. Provide the mediator with relevant information regarding the dispute prior to the mediation. As indicated above, ordinarily the mediator will correspond with parties confirming the retention of the mediator. At that time, a request is often made for information surrounding the dispute. An exhaustive "brief' is not necessary; nonetheless, the mediator will be better equipped to address the issues, challenge

the parties on their positions, and encourage further examination of the positions of the parties, if the mediator is provided with enough information and evidence to understand the nature of the dispute. If there are particularly troubling personal issues or dynamics involved, it is helpful for the mediator to know as early as possible in the process.

2. Bring your client to the mediation. While the plaintiff or the adjuster may have to travel a considerable distance to attend the mediation, in most circumstances the chances of success increase markedly when all parties are actually present, rather than participating intermittently by phone. While attendance may not be feasible in all cases, there is value in allowing the parties to "size up" one another, and there is certainly value for the mediator to have a face-to-face discussion of a case with an adjuster who perhaps may have undervalued the case, or with a plaintiff who may have unreasonable expectations of his or her claim.

3· Know your case prior to mediation. It's always better to argue from a position of strength, and it's not feasible to do so when you don't have a good feel for the evidence.lt is helpful to have the disputed medical or vocational evidence available, to know the value of a disputed claim for indemnity payments, and to be prepared to "arm" the mediator with substantive messages that will convey to the adversary the strength of your position.

4· Present a settlement demand or offer prior to mediation. I have seen many mediations sidetracked for an hour or more in discussion of who ought to make the first move, or whose "turn" it is in terms of settlement demands or offers. I have also seen a mediation fail at the outset when a party's initial demand, stated for the first time at mediation, was viewed by the defendant as excessive. (It is also possible that the broaching of settlement discussions prior to mediation may do away with the need for any mediation at all.)

s. Don't argue (too much) with the mediator(please). It's helpful for the mediator to hear your best and strongest arguments in private sessions early in the mediation. But if your mediator starts looking at you sideways as things progress, and if you find yourself interrupting or arguing perhaps a little too aggressively with the mediator as the day goes on, you might be limiting the ability of the mediator to make a point or deliver a message that may be important. This is certainly not to say that the mediator necessarily knows how to handle your client better than you do, but there is the chance that strong messages from the other side may be necessary to break an impasse and move toward a mutually beneficial settlement.

6. Keep control of your client. Coming into the mediation, you should encourage, or even "insist" that the client enter the mediation with an open mind to all settlement discussions. In my introductory "pep talk," I warn plaintiffs that they may have to accept less than they ever imagined they would accept in order to get the case settled,

and warn defendants that they may have to pay more money than they thought they would pay to settle a claim. The parties need to be open to an ongoing discussion of the case and the existence of genuine disputes with regard to the value of the claim.

7· Try to defuse personal issues. Often in mediation, one party has an axe to grind with the other. Obviously, personal attacks undermine the chances of the parties reaching a consensus on the disputed issues. Similarly, dwelling on a particularly troublesome aspect ofthe case is counterproductive. While it is the mediator's job to address these problems, counsel can also assist by steering a client away from divisive issues.

8. Don't draw your line in the sand too early. Mediations can fail when a party issues a "drop dead" ultimatum too early in the proceeding. In that case, sometimes as much energy is spent attempting to save face as it is in earnest settlement negotiations.

g. Don't walk away at the first sign of difficulty. The mediation process has a surprising ability to work itself out ifthe parties are patient.

Points to Consider (in no particular order of importance).

~. Don't be afraid to call the unpaid provider or lienholder even if you likely should have done it weeks ago. While '1t doesn't happen often, several cases that otherwise could never settle may get resolved when the outstanding medicals or liens are compromised.

2. That Nagging Mortality. This is undoubtedly the touchiest of subjects, particularly when an employee may face comorbidities that materially reduce his or her expectancy. Rather than say, "You realize you're not likely to beat the Life Tables, don't you?" A simple recognition that any one of us could step in front of a bus tomorrow might get the point across. The comp claim would end, and if there are dependents, that could be a devastating circumstance.

3· The Employer Cannot be Forced to Settle. Like it or not, Plaintiff or Defendant, if you want to buy your peace once and for all, you either need a Dismissal with Prejudice or a settlement.

4· Don't underestimate What an Award, or a Judge, Can Do to You. This can be particularly true when the assigned trial judge has a history of ruling one way or the other, or has a recent case with a similar issue that was decided against your argument.

S· An Employer Paying in a Lump Sum is (Almost) Always Entitled to a Present Value Reduction. An attorney representing the employee may have good points against this "rule" in addressing medical expenses, in that inflation may offset any value of

money over time, but it is a tough sell for an employer paying money now in a lump sum for future benefits to waive a present value discount. It can make settlement impossible if a hard line stance is taken.

6. Could Future Prescription Medication Expenses be Reduced with Expiration of a Patent? In many cases, expensive medications may be scheduled to go off patent in the near future. While there is no guarantee that a price reduction will automatically result (see, e.g., Epi Pen), normally huge savings are anticipated once the patent expires.

7· Medicare; Where To Even Start? There are more potential issues than space allows. Some thoughts include: - Seems that the possibility of a "zero" Medicare Set-Aside getting approved is

inversely proportional to the amount paid in settlement. -Are you closing in on 30 months from being automatically entitled to Medicare? - Cases where benefits have been paid for a condition but subsequently developed evidence raises genuine questions on compensability. -are there non-Medicare-covered expenses to consider (will "blue sky" be necessary in settlement in addition to funding of an MSA?) - hard to sell a settlement conditioned upon CMS approval; consider settling indemnity only.

Why Mediation Works. Sometimes half the battle seems to be getting all of the parties together at one time to discuss the case in earnest. In many cases, you will likely accomplish more in a four- to eight-hour mediation than you would in three months of voice mail messages, phone calls, or correspondence. While there are certainly no guarantees, a mediator who is familiarized with the facts of your dispute can challenge parties on questionable positions they have taken, encourage discussion of disputed issues, dismantle potential personal roadblocks to settlement, and facilitate a meaningful discussion of the case. While it is certainly true that many cases are settled without the use of the mediation process, there are also a lot of cases heading to trial which might be resolved with the assembly of all the parties in one location, and involvement of an independent third person in promoting a civil discussion of settlement.

Joseph W. Grant Prentiss Grant LLC 13305 Birch Drive, Ste. 101 Omaha, Nebraska 68164 Phone: (402) 391-4600 Fax: (402) 391-6221 Email: [email protected]

Attorney Fees for Unpaid Medical Bills

Brody Ockander, J.D. Rehm Bennett & Moore, PC LLO


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Attorney Fees for UnpaidMedical Bills

Attorney Fees

§ 48-125(a)(b)(c)1. When benefits are not properly paid within 30 days of an Award or obligation to pay (i.e. Waiting-Time Penalties and Attorney Fees)

2. When the Defendant appeals an Award and does not obtain reduction in amount of the Award under (2)(b).

3. When Plaintiff appeals and obtains increase in benefits awarded, attorney may be awarded fees under (2)(c)

Three Main Issues forPenalties/Fee

1. Reasonable Controversy

2. When Employer/WC Carrier had Notice

3. When the Payment actually made

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1. Reasonable Controversy

1. There is a question of law previously unanswered by the Supreme Court, which question must be answered to determine a right or liability fordisposition of a claim under the NE WC Act, or

2. If the properly adduced evidence would support reasonable but opposite conclusions by the compensation court about an aspect of an employee’s claim, which conclusions affect allowance or rejection of the employee’s claim, in whole or in part.

Mendoza v. Omaha Meat Processors, 255 Neb. 526 (2003)

1. Reasonable Controversy (Simplified)

If reasonable and opposite conclusions can be reached by the trial court.

See also Armstrong v. State, 290 Neb. 205 (2015)

1. Reasonable controversy cases

Armstrong v. State, 290 Neb. 205 (2015)– Reasonable controversy even if testimony unknown at the time

the employer denies benefits

Miliken v. Premier Industries, 13 Neb. App 330 (2005)– No reasonable controversy when delayed DME agreed with

treating doctor

Dawes v. Wittrock Sandblasting & Painting, 266 Neb. 526 (2003)– Existence of reasonable controversy determined at time of trial

Miller v. E.M.C. Ins. Co, 259 Neb. 433 (2000)– No Dispute employee was totally disabled

Grammer v. Endicott Clay, 252 Neb. 315 (1997)– Settlement negotiations ≠ reasonable controversy

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1. Reasonable Controversy: Question of Law Cases

Bixenmann v. H. Kehm Const., 267 Neb. 669 (2004)– Reasonable controversy because Rule 36 contrary to statute

Hobza v. Seedorff Masonry, 259 Neb. 671 (2000)– Reasonable controversy as to when PPD benefits commence

Hale v. Vickers, 10 Neb. App. 627 (2001)– No reasonable controversy because law settled that

aggravations of preexisting injuries are compensable

2. Notice

Employer/Carrier must have notice that a benefitis due– TTD/TPD: Must receive the restrictions

Must show “competent medical evidence workers is entitled to benefits.” See McBee v. Goodyear Tire, 255 Neb. 903 (1999).

– PPD/PTD: When Impairment % or LOEC received See Miliken v. Premier Indus. Inc. 13 Neb. App 330

– Medical Bills: Itemized bills with correlating records

2. Notice (cont.)

How to Prove Notice:– Letters– Emails (return receipt)– Sharefile (or equivalent)– Admissions– Depositions of Adjuster (Nurse Case Manger)– Affidavits from Medical Providers

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3. When payment was made

Awards:– 30 Days from the date the court enters

Award Roth v. Sarpy Co. Highwy Dept., 253 Neb. 703 (1998)

– Must be postmarked within 30 days Brown v. Harbor Fin. Mortg Corp.

– Sent to Plaintiff or Plaintiff’s agent Harris v. Iowa Tanklines, Inc., 20 Neb. App. 513

(2013)

3. When payment (cont.)

Appeals:– 30 days doesn’t start until after mandate of

the Work Comp Court. Leitz v. Roberts Dairy, 237 Neb. 235 (1991) Lietz II, 239 Neb. 907 (1992)

– If appealed, 30 days doesn’t start for any benefits until after appeal completed. Lagemann v. Neb Methodist Hosp., 277 Neb. 335

(2009). – How would this be handled with Medical Bills?

3. When payment (cont.)

Settlements:– Release under § 48-139(4) Holdsworth v. Greenwood Farmers, 286 Neb.

49 (2013). Fixed by Legislature in 2015 “…Amounts to be paid by the employer to the

employee pursuant to such release shall bepaid within thirty days of filing the releasewith the compensation court.”

– LSS Application (treat like Award) Hollandsworth v. Nebraska Partners, 260

Neb. 756 (2000).

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Atty Fees for Medical Bills

No 50% Waiting-time penalties for Bills!– See (Bituminious Casualty Corp. v. Deyle, 234 Neb. 537 (1990)

– Statute Amended in 1999 but still no 50% penalty Bronzynski v. Model Electric, 14 Neb. App. 355 (2005). Also, cannot sue for bad faith in tort for unpaid medical bills.

See IHM v. Crawford & Co., 254 Neb. 818

But Atty Fee possible if not paid within 30 days – Encourage prompt payment making delay costly

Behrens v. American Stores Packing Co., 234 Neb. 25 (1989)

Atty Fee for Bills (cont.)

Who does the Employer/Carrier Pay?– Pay directly to provider within 30 days– Need not directly reimburse Plaintiff for

payment or co-payments VanKirk v. Central Com College, 285 Neb. 231

(2013) Quote: “the purpose behind 48-120(1)(e) is to

prohibit a supplier or provider form charging more than a fee schedule permits.” Pearson v. Archer-Daniels-Midland Milling Co., 282

Neb. at 410 (2011)

Determining Attorney Fee

Harmon Factors– Amount involved; – Nature of the litigation; – Time and labor required;– Novelty and difficulty of the questions raised; – Skill required to properly conduct the case;– Responsibility assumed;– Care and diligence exhibited– Result of the suit– Character and standing of the attorney; and– Customary charges of the bar for similar services

– Harmon v. Irby Const. Co., 258 Neb. 420 (1999)

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“Reasonable” Fee

Fact-specific– What is reasonable is determined on case-by-

case basis– Judge Gerrard’s concurrence in Harmon Beneficent purpose of the act/ prompt payment

– Simmons v. Precast Haulers, Inc., 288 Neb. 480 (2014). (see also Simmons II, unpublished)

Reasonable Fee: Approaches

Traditional (Harmon)– Not always an incentive for prompt payment– Potentially beneficial for Carrier to delay

payment and pay an insignificant atty fee

Investment Income:– Atty Fee in amount carrier could have earned

by investment of the amount that is late

Reasonable Fee: Approaches

Contingency Fee (can be considered) Discretion of the Court

– Trial courts and appellate courts equally are regardedas experts on the value of legal services. Boamah-Wiafe v. Rashleigh, 9 Neb. App. 503 (2000).

In Sum: It’s up to the Court.– Factual issue which trial court retains sole discretion.

Hale v Vickers, Inc. 10 Neb. App 627 (2001). – No affidavit is required for attorney fees. Garza v.

Garza, 288 Neb. 218 (2014)

10/27/2017

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Attorney Fees from Appeals

§ 48-125(2)– (b)When Employer appeals and does not

obtain a reduction in amount of award– (c) When Employee appeals and obtains

increase in benefits awarded, attorney fees may be awarded

File Motion and Affidavit within 10 days of the Order (see Neb. Ct. Rule § 2-109)– Need Affidavit for fee, unlike at WC-level

Attorney Fees From Medical Providers?

Attorney Fees from Medical Providers– Nope. See Walentine v. Midwest

Neurosurgery, 285 Neb. 80 (2013) Filed in District Court § 48-125(2)(a) “Attorney’s fees allowed shall not

be deducted from the amounts ordered to be paid for medical services nor shall attorney’s fees be charged to the medical providers

– Different than Health Insurance Carriers

Attorney Fee from Health Insurance?

Attorney Fees from Health Insurance– Yes, kind of… See Kaiman v. Mercy Midlands,

1 Neb. App 148 (1992). Common fund doctrine

– But Work Comp Court does not have jurisdiction See Heesch v. Swimtastic, 20 Neb. App 260 (2012) Must file in District Court because health insurance

carrier not a party in the work comp claim

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Attorney Fee for Retirement Pension?

Nope– Contrary to Kaiman, no common fund found

by majority Kindred v. City of Omaha Employees’ Retirement,

252 Neb. 658 (1997)– 3-person dissent.

Interest

§ 48-125(3)– If an attorney fee is ordered, shall be assessed

against the employer– Before Aug. 30, 2015: “equal to the rate of interest

allowed per annum under section 45-104.01.”– After Aug 30, 2015: “six percentage points above

bond investment yield…”– Interest based on what has accrued for each specific

week Just see Russell v Kerry, Inc., 278 Neb. 981 (2009).

Costs

§ 48-172– If attorney fee awarded, may be able to

recover costs Witness Fee Mileage Fee Deposition Costs

– Must be awarded attorney fee at trial-level No costs of an expert witness (dicta?) See Varela v. Fisher Roofing Co., 5 Neb. App 722

(1998).

Case Law Update Abigail Wenninghoff, J.D.

Larson Kuper & Wenninghoff, PC


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2017 Annual Workers’ Compensation Seminar

Case Law Update

Abigail A. Wenninghoff

17021 Lakeside Hills Plaza, #202Omaha, Nebraska 68130(402) 932-0290 | F. (402) 932-0301

Nebraska Supreme Court Cases

Greenwood v. JJ Hooligans/FirstComp., 297 Neb. 435 (2017)

Greenwood suffered a compensable injury on January 14, 2012. Greenwood filed a Petition against JJ Hooligans and FirstComp Insurance. FirstComp moved to dismiss the Petition arguing that it did not provide insurance for JJ Hooligans. FirstComp alleged that they had properly given JJ Hooligans notice of termination of coverage due to nonpayment of premiums in compliance with 48‐144.03. In support of the Motion to Dismiss, FirstComp provided evidence that notice of the cancelation was sent via electronic certified mail in November 2011, that notice of cancellation was filed with the Workers’ Compensation Court and evidence of a certified mail tracking number. The Workers’ Compensation Court Dismissed the Petition against FirstComp finding that FirstComp had provided evidence of cancellation and that they did not have coverage for JJ Hooligans at the time of the injury.

The Supreme Court reversed and remanded the case finding that a material issue of fact existed as to whether notice was actually sent to the employer based on the electronic mailing system used by FirstComp. The Court held that a tracking number alone does not establish certified mail service.

Interiano‐Lopez v. Tyson Fresh Meats, Inc., 294 Neb. 586, 883 N.W.2d 676, (2016)

Plaintiff claimed an injury while working for the defendant in 2013. Plaintiff filed a petition and defendant filed an answer and counterclaim. Upon plaintiff’s motion to dismiss without prejudice, the trial court entered an order dismissing the petition without prejudice, but the case proceeded to trial on defendant’s counterclaim in 2015. Plaintiff participated in trial after objecting to the proceedings based on the dismissal of the petition without prejudice.

The Supreme Court held that the trial court erred in allowing the case to proceed to trial. The Court held that Neb. Rev. Stat. § 48‐177 gives the right to dismiss to a plaintiff when represented and before final submission, which happened in this case. The Court further noted that the general civil statutes do not apply in workers’ compensation cases and there is no authority to dismiss less than the full action. The Court reasoned that the workers’ compensation court is intended to be simplified procedurally. The streamlined statutory pleading rules in workers’ compensation cases permit the filing of a petition, answer, and various motions. See Neb. Rev. Stat. §§ 48‐173, 176, and 162.03. The Supreme Court stated that legislative change was required to allow other pleadings.

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Kohout v. Bennett Construction, 296 Neb. 608, 894 N.W.2d 821 (2017)

Mark Bennett is the sole owner of Bennett Construction primarily involved in carpentry. Mark’s son, Nick Bennett was once an employee of Bennett Construction but later became the owner of Nick Bennett Construction which primarily works on roofing and gutters. Mark would occasionally hire Nick as a subcontractor for roof and gutter work. Shook contracted with Nick for repairs on his property, there was an unsigned proposal which indicated that “our workers are fully covered by workers’ compensation insurance.”

Nick admitted that he used an old business card and an old job proposal form from Mark’s business but crossed out the name and inserted his (Nick’s) company name. Nick’s invoices contained a Nick Bennett Construction logo and Shook wrote some checks to “Nick Bennett Construction.”

Kohout v. Bennett Construction (Cont.)The Supreme Court upheld the determination that the settlement was fair and reasonable given the possible exposure in the third‐party claim as well as the arguments OTE had regarding Kroemer’s contributory negligence. Nick hired Kohout to work on Shook’s project. Kohout fell from the roof of Shook’s property and was injured. Kohout filed a workers’ compensation claim against Bennett Construction (owned by Mark Bennett) The trial court dismissed plaintiff’s petition, finding that plaintiff was employed by Nick Bennett Construction and that under § 48‐116, defendant was neither a direct employer nor statutory employer.

Plaintiff contended that defendant was a statutory employer pursuant to § 48‐116, which assigns the designation of employer to an entity engaged in “any scheme, artifice, or device to enable him or her … to execute work without being responsible to the workers for the provisions of the Nebraska Workers’ Compensation Act …” The Supreme Court noted one long‐held example of this is a general contractor who fails to require the subcontractor have workers’ compensation insurance. Nick’s company did not have workers’ compensation insurance at the time of the injury. The Court noted that, had Mark’s company been the general contractor then he likely would have been a statutory employer. However, Plaintiff did not meet his burden of proof that Mark was the general contractor.

Plaintiff has the burden to prove statutory employment by a preponderance of the evidence. Shooks testimony did not establish that he intended the check written to “Bennett’s Construction” to actually go to Mark and there was no evidence that Nick’s actions were on behalf of Mark. Plaintiff’s argument that Mark and Nick were a joint venture also failed.

Kroemer v. Omaha Track Equipment, L.L.C., 296 Neb. 972, 898 N.W.2d 661 (2017)

Kroemer was employed by Ribbon Weld. Kroemer would use the tools of Omaha Track Equipment OTE, (third‐party), to service his work equipment. Kroemer was using OTE’s grinder when his eye was injured, and he sustained a 95 percent loss of vision in the eye. Kroemer pursued a workers’ compensation claim against the Ribbon Weld and settled for $80,000.00. Ribbon Weld had a subrogation interest in excess of $200,000.00.

Kroemer then filed a third‐party action against OTE, which settled for $150,000.00. The District Court distributed the settlement entirely to the employee.

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Kroemer v. Omaha Track Equipment (Cont.)Two experts testified that there was a substantial probability of a jury verdict in favor of the third‐party. Another expert testified that there was a 70 to 80 percent chance of a verdict in plaintiff’s favor. However, given the risk presented to the employee of receiving nothing, the Supreme Court determined that settlement for $150,000.00 was fair and reasonable in light of the evidence showing the risk of unfavorable result.

The Supreme Court reversed the distribution of $0.00 to the employer and remanded for a determination of a fair and equitable distribution of the settlement proceeds. Failure to allocate at least some of the settlement to the employer was an abuse of discretion. The Supreme Court favors a liberal construction of the employer’s statutory right of subrogation. Bacon v. DBI/SALA, 284 Neb. 579, 822 N.W.2d 14 (2012).

The Supreme Court disapproved of the Court of Appeals decision in In re Estate of Evertson, 23 Neb. App. 734, 876 N.W.2d 678 (2016), vacated on other grounds 295 Neb. 301, 889 N.W.2d 73. The Supreme Court explained that In re Estate of Evertson should not be relied on for analysis of distribution of settlement proceeds, reversed the district court’s determination of the distribution in this case and the case was remanded for a determination.

Nichols v. Fairway Building Products, L.P., 294 Neb. 657, 884 N.W.2d 124 (2016)

Plaintiff claimed a back injury with resulting psychological injury. Plaintiff offered an expert medical opinion that the accident did cause or aggravate his prior low back problems. Defendants offered evidence showing a history of Plaintiff suffering back injuries requiring treatment that occurred six to 18 years before the alleged work injury. Plaintiff’s expert was not informed of these injuries. Defendants offered an opinion from their own expert, who noted he could not state that the accident caused the injuries and he believed the work accident was an exacerbation that resolved within 12 weeks. The trial court found a causal connection between the accident and injury and awarded permanent total disability benefits.

Defendants alleged error in the trial court’s reliance on the Plaintiff’s expert opinion, citing the lack of the expert’s review of the prior history of back problems. The Court noted that complaint is a foundational objection, which defendants failed to make at trial. Therefore, the issue was not preserved for appeal. As both opinions were admitted the case was one of competing medical experts. The Court noted the longstanding rule that where two competing experts come to differing conclusions, it is solely upon the trial judge to determine which expert is more persuasive. Therefore, there was no error in the determination of the trial judge on the issue of causation.

Both parties stipulated that there was a mathematical error in the trial court’s award in setting forth the total weeks of temporary total disability. Pursuant to the stipulation, the Supreme Court modified the award accordingly.

Hintz v. Farmers Cooperative Association, 297 Neb. 903 (2017)

Plaintiff was working as a tire technician when a tire exploded throwing him backward. He landed on his back, could not feel his legs, had pain in his hips and his groin area, and heard “a whistling” in his ears. Plaintiff was able to get up and walk but was in pain and had to “drag” his right leg behind him. He left work, but did not seek medical treatment. Plaintiff returned to work the following Monday, but indicated he was only able to work “a little.” Defendant offered evidence, including payroll records and testimony of coworkers, suggesting plaintiff was able to complete all of his job requirements when he returned to work.

Approximately three weeks after the incident with the tire, plaintiff tripped while walking up some stairs at home and the next day sought treatment with Dr. Gallentine for pain in his right leg. He told Dr. Gallentine that since the work incident, he “was jumping on and off trucks without any difficulty.” Dr. Gallentine indicated plaintiff should remain off work, so he applied for short term disability benefits and indicated on the application that his condition was not related to his occupation. Plaintiff had surgery to repair injuries to his hip. He was terminated from employment with defendant in March 2015. He then told the surgeon, Dr. Harris, that his hip injury was caused by the tire incident at work.

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Hintz v. Farmers Cooperative Association (Cont.)The expert evidence at trial differed. Dr. Harris opined that the labral tear found at surgery was relatively severe and the mechanism of injury seemed more likely to be the result of a high energy work injury as opposed to simply falling up the steps. Dr. Gallentine opined that it was very difficult to assign causation to one event versus the other. Dr. Bozarth conducted a records review and opined that the hip injury related to the fall at home. Dr. Bozarth based his opinion on plaintiff’s differing reports of the onset of injury.

The trial judge found there was no competent medical evidence to support causation because the surgeon’s opinion was based on poor foundation, and inconsistent reports from Plaintiff. The trial court found plaintiff’s injury resolved within three days and declined to award benefits.

The Court of Appeals concluded that the trial court was clearly wrong in finding there was not competent medical evidence to support plaintiff’s claim and reversed the trial court’s decision and remanded with directions to reconsider the claim in light of Dr. Harris’ competent medical opinion and considering the beneficent purpose of the Nebraska Workers’ Compensation Act.

The Nebraska Supreme Court reversed the Court of Appeals decision holding that the case was one of differing medical experts and that the trial court is the sole judge of the weight to be given each expert opinion. The Supreme Court remanded the case to the Appeals court with direction to affirm the decision of the Workers’ Compensation Court.

Court of Appeals cases (Designated for Publication)

Hostetler v. First State Bank Nebraska, 24 Neb.App. 415, 889 N.W.2d 123 (2016)

In 2013, plaintiff fell while walking down the stairs at her workplace, sustaining an injury to her tailbone and a sacral fracture. Plaintiff worked after the injury, but testified that the pain medications interfered with her ability to perform her job functions and caused her to make mistakes, technical errors, and take longer to complete projects. Plaintiff’s physician restricted her work to four hours per day. A functional capacity evaluation restricted her to sitting six to seven hours in an eight‐hour workday. The vocational counselor provided a range of loss of earning opinions based on the different restrictions (0 to 60 percent).

Plaintiff’s attorney wrote a letter to the counselor asking for clarification on the effect of the four‐hour workday restriction on plaintiff’s loss of earning power. The vocational counselor responded with an opinion that, based solely on the four‐hour workday restriction, plaintiff may be considered an odd‐lot worker. The vocational counselor’s response to Plaintiff’s attorney as admitted into evidence over the objection of Defendant.

Defendants claimed the trial court erred overruling their objection to admission of a portion of the vocational counselor’s report because the report was procured in violation of Neb. Work. Comp. Ct. R. 42,E. That rule provides, in part: “The parties, other than the employee, shall not attempt to influence or to control the meeting place, the outcome of the evaluation, or the recommendations of the vocational rehabilitation counselor.” In this case, it was the employee who sought additional information regarding the counselor’s opinion (not a party other than the employee). The employee is allowed to do so under the compensation court rules. The fact that the letter was through her attorney did not mean it was from a “party other than the employee” as set forth in Neb. Work. Comp. Ct. R. 42,E.

Further, the Court of Appeals found the intent of the letter was not to influence the outcome of the evaluation, but rather to obtain clarification of the counselor’s opinions considering only the restriction to a four‐hour workday. Finally, the Court of Appeals found that the counselor’s response showed there was no influence resulting from the letter because there was no change to the original opinion.

Defendants also appealed the trial court finding that plaintiff was permanently and totally disabled because she was an odd‐lot worker. Based on the facts, the Court of Appeals found sufficient evidence to support the trial court’s finding that plaintiff was totally and permanently disabled.

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Maradiaga v. Specialty Finishing & Travelers Indem. Co., 24 Neb.App. 199, 884 N.W.2d 153 (2016)

Plaintiff testified at trial that she arrived at work, parked her car in the employer’s parking lot, exited her car, and fell down while walking. Defendants offered evidence to contradict that testimony: a) plaintiff’s recorded statement that she got out of the car, took one step, and her foot twisted, b) a human resources employee’s testimony that plaintiff told her she got out of her car, stood up, and felt pain in her leg then “fell back down,” and c) insurance forms completed by plaintiff indicating she felt pain in her foot upon exiting her car and placing her feet on the ground. Medical records also contained differing reports of the incident.

The trial court found plaintiff’s injury did not arise out of employment because the ankle injury occurred when plaintiff was simply walking with no trip, slip, or hazard presented in the lot. The Court of Appeals affirmed the decision of the trial court in a detailed analysis.

Maradiaga v. Specialty Finishing & Travelers Indem (Cont.)

The Court of Appeals discussed risk categories. 1. Employment risks are those associated with the employment and arise out of

employment. 2. Personal risks are risks personal to the employee (also called idiopathic causes) and do

not arise out of employment. 3. Neutral risks are risks that are neither associated with the employment nor the

employee, or they are risks where the cause of the harm is totally unknown. examples of neutral risks not associated with the employee or employment are stray bullets, lightning, or hurricanes examples where the cause of the harm is unknown are purely unexplained falls.

In Nebraska, the positional risk doctrine has been applied to cases involving neutral risks of both types: those not associated with the employee or employer and those of purely unknown cause. The positional risk doctrine holds that an accident from such neutral risk arises from employment when the employment places the employee in a position (at a time and place) to be injured such as a tornado or a fall with a purely unknown cause because Plaintiff lost consciousness.

Maradiaga v. Specialty Finishing & Travelers Indem (Cont.)

In the present case, the Court of Appeals found the risk was not neutral and did not warrant application of the positional risk doctrine. The incident here did not involve a known risk akin to a tornado that was purely neutral nor did it involve a purely unknown risk or cause. The Court analyzed the evidence and found that she broke her ankle by taking a step, not as a result of tripping, slipping, a hazard in the lot, or weight from carrying items. Plaintiff’s trial testimony on the cause of her fall was inconsistent with much of the other evidence on the mechanism, and the trial court’s finding that the injury and fall were caused by walking alone was not clearly wrong.

Finally, the Court noted that while injuries resulting from everyday activities may be compensable if the employment contributed to the risk, non‐strenuous walking is the “epitome of a nonemployment risk.” See Carter v. Becton‐Dickinson, 8 Neb. App. 900, 907, 603 N.W.2d 469, 474 (1999),

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Michael B. v. Northfield Retirement Communities, 24 Neb. App. 504, 891 N.W.2d 698 (2017)

Decedent suffered a work‐related injury with defendant in 2009 and in 2012, a stipulated award was entered in her favor. On April 15, 2014, decedent passed away. The coroner found that her death was accidental, the cause of which was multiple drug toxicity. Plaintiff then filed an amended petition on behalf of decedent’s daughter seeking death benefits.

Hours before her death, decedent received a visit from a detective and social worker. She learned she would be evicted and lose custody of her daughter. Decedent became upset and said that she had no family in the area, did not know what she was going to do, and repeated several times that she was “at her end.” One hour after the visit, a rescue call was received and decedent was pronounced dead later at the hospital.

Michael B. v. Northfield Retirement Communities (Cont.)Decedent’s doctor testified that decedent had been experiencing pain since her work accident, she had been prescribed various pain medications, and at the time of her death, decedent had prescriptions for methadone and oxycodone. The doctor also testified that decedent had a history of anxiety and depression that predated her work injury, had been on medications such as Xanax since 2003, had prior suicidal ideations and attempts. The doctor further testified that the correct dosages would not be expected to cause death. Finally, it was the doctor’s opinion that death resulted from the amount of medication, and not the combination of medications.

The trial court found that decedent’s manner of death was suicide, which constituted willful negligence barring any recovery of death benefits. The Court of Appeals held that the trial court was correct in finding the presumption against suicide was rebutted and found sufficient evidence to support the finding of willfully negligent suicide.

The Court noted that Neb. Rev. Stat. § 48‐101 provides an employee who is willfully negligent cannot recover under the workers’ compensation law, and Neb. Rev. Stat. § 48‐151(7) provides willful negligence consists of a deliberate act evidencing a reckless indifference to safety. Suicide generally constitutes willful negligence and bars recovery. However, the Supreme Court carved out an exception to this rule, holding that if the suicide was involuntary due to pain from the compensable injury, the act is not willful negligence and the dependents may recover. See Friedeman v. State, 215 Neb. 413, 339 N.W.2d 67 (1983).

My work here is done.

Summary Judgment in Workers’ Compensation Cases

Justin High, J.D. High & Younes, LLC


SUMMARY JUDGMENT IN WORKERS’ COMPENSATION CASES – RULES, PROCEDURE, TIPS AND FORMS

NSBA ANNUAL WORKERS’ COMPENSATION SEMINAR – 2017

FRIDAY, NOVEMBER 3, 2017

JUSTIN HIGH HIGH & YOUNES

[email protected] 402-933-3345

I. Introduction Prior to 1997, the Workers’ Compensation Court lacked statutory authority to hear motions for summary judgment. With the passage of LB 128, the Court was given the power to hear “any motion addressed to the court by any party to a suit or proceeding, including, but not limited to, motions for summary judgment or other motions for judgment on the pleadings but not including motions for new trial.” Neb. Rev. Stat. 48-162.03. The Workers’ Compensation Court issues approximately 2800 total “dispositions on motions filed” per year. Since 2000, the Court has ruled on an average of thirty-two motions for summary judgment per year. Summary judgment is a procedure that, when used correctly, can serve both judicial economy and the purpose of the Workers’ Compensation Act by bringing about the timely and efficient disposition of a case.

II. Substantive Law “The judgment sought shall be rendered forthwith if the pleadings and the evidence admitted at the hearing show that there is no genuine dispute as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Neb. Rev. Stat. 25-1332. There are generally two situations in which summary judgment is appropriate in the context of a workers’ compensation case:

1. There is no genuine dispute as to an element of your case because the opposing party has no competent evidence that brings the disposition of that element into dispute.

2. There is no dispute about the facts of the case between the parties, but the parties disagree about the application of the law to those facts.

The existence of any fact that tends to bring an essential element of your case into question is likely sufficient to create a genuine dispute that will preclude summary judgment. See examples and explanations at the end of this outline.

III. Procedural Law

1. Notice Requirements The Summary Judgment statutes provide for notice:

“The motion shall be served at least ten days before the time fixed for the hearing. The adverse party prior to the day of hearing may serve opposing affidavits.” Neb. Rev. Stat. 25-1332. But, contrast this with the more specific statutes and rules of the Workers’ Compensation Court, which state: “The Nebraska Workers’ Compensation Court or any judge thereof may rule upon any motion addressed to the court by any party to a suit or proceeding, including, but not limited to, motions for summary judgment. . .” Neb. Rev. Stat. 48-162.03. “Notice of hearing shall be delivered to opposing counsel or party, if unrepresented, in accordance with Rule 3,B,1 three full days prior to hearing.” Neb. WCC Rules of Procedure, Rule 2D(3). “Whenever a party has the right or is required to take some action within a prescribed period after the service of a notice or other document upon the party and the notice or document is served under Rule 3,B,1 ,b,d,e, or f, three days shall be added to the prescribed period.” Neb. WCC Rules of Procedure, Rule 2B(5). Although it is not explicitly stated in the statutes or rules, the evidence (ie, affidavits, admission, etc) offered in support of the motion for summary judgment should be disclosed along with the motion. The best course of action is to provide adequate notice so that the opposition has sufficient time to develop the available evidence in support of their position. By the time you are ready to file your motion, they should have the evidence, if they can actually get it. If the opponent believes that additional evidence to justify his or her position cannot be presented at the time of the hearing, the Court may order a continuance of the hearing. The Court, in its discretion, may also allow additional time for affidavits to be supplemented or additional affidavits to be presented. Neb. Rev. Stat. 25-1334, 25-1335.

2. Admissible Evidence The Summary Judgment statutes provide for the evidence that may be presented: “The evidence that may be received on a motion for summary judgment includes depositions, answers to interrogatories, admissions, stipulations, and affidavits.” Neb. Rev. Stat. 25-1332.

But, contrast this with the more specific rules of the Workers’ Compensation Court, which state: “The Nebraska Workers’ Compensation Court is not bound by the usual common law or statutory rules of evidence.” Neb. WCC Rules of Procedure, Rule 10. The Court may, but is not required, to allow Rule 10 reports, medical records, medical bills or other evidence to be entered on a motion for summary judgment. It is advisable to discuss the issue with opposing counsel to determine if he or she will object to the entry of evidence beyond that proscribed by Neb. Rev. Stat. 25-1332.

3. Burden of Proof In order to prevail on a motion for summary judgment, an Employee must prove there is no genuine dispute as to any material fact and he or she is entitled to judgment as a matter of law on all essential elements of compensability, including:

A. Personal Jurisdiction B. Subject Matter Jurisdiction C. Venue D. Employment/Statutory Employment E. Accident F. Injury G. Arising Out Of H. Course Of Employment I. Notice J. Causation K. Average Weekly Wage*

If the Employee fails to produce evidence on these essential elements, the Employee’s motion for summary judgment will fail. In order to prevail on a motion for summary judgment, an Employer must prove there is no genuine dispute as to any material fact and he/she/it is entitled to judgment as a matter of law on any essential elements of compensability.

IV. Practical Considerations

1. Know whether to file. A. Understand that if your opponent is able to produce competent, admissible

evidence that controverts an essential element of your case, regardless of the persuasive power of that evidence, a motion for summary judgment will

likely fail. The Court is required to view the evidence, and all reasonable inferences that may be derived from the evidence, in the light most favorable to the opponent.

B. Understand that by filing a motion for summary judgment, you are giving your opponent the opportunity to correct any defects in his or her case prior to trial.

C. If the issues are truly uncontroverted, consider serving requests for admission

and/or requesting that the opposing party enter into a stipulation rather than expending judicial resources.

2. Know when to file. Understand that if you file a motion for summary judgment

before your opponent has had an adequate opportunity to investigate the case and obtain an understanding of the facts, your motion is likely premature and will be continued by the Court to allow your opponent the opportunity to investigate.

3. Know what issues you may file for. Motions for summary judgment may be “total” or “partial” in character. A party may file for summary judgment and obtain an order on certain issues only.

4. Provide the Court with a Roadmap, and point out the Landmarks.

A. In your motion itself, cite to specific portions of your evidence that establish

the essential elements of your case and why that evidence entitles you to the relief you are after, or:

B. Draft a brief with a thorough fact section that cites to specific portions of your evidence that establish the essential elements of your case and why that evidence entitles you to the relief you are after.

5. Be aware of the particular judge’s practice when it comes to including exhibits

offered at a summary judgment. The exhibits may be received in the record or received only for the purpose of the motion for summary judgment.

6. Request that the Court take judicial notice of the pleadings.

V. Examples and Explanations of Successful Motions for Summary Judgment

1. Defendant sought summary judgment alleging the Plaintiff’s accident did not arise out of or occur in the course of employment. The Plaintiff was injured in a car accident following a substantial deviation from the course of travel that

served the Defendant’s interest. The Court found that, as a matter of law, Plaintiff was not a commercial traveler and was on a personal errand at the time of his injury. Moore v. M&A Enterprises, Doc. 215 No. 1622.

2. Defendant sought partial summary judgment alleging that Plaintiff had failed to establish sufficient causal connection between the accident and one of the claimed injuries with the requisite expert medical testimony. The Court further found that any claim for future medical treatment for the particular injury was barred. Schelp v. Kelley Bean Co., Inc., Doc. 213 No 1170.

3. Plaintiff sought partial summary judgment alleging that he was entitled to

certain medical care as a matter of law. The Court found that Plaintiff had carried his burden of proving all essential elements of entitlement to the medical care through competent expert evidence and Defendant had failed to establish any genuine issues of material fact to preclude the entry of judgment in Plaintiff’s favor. Lewis v. MBC Construction Co., Inc., Doc 216 No 0881.

4. Plaintiff sought partial summary judgment alleging that there was no genuine

issue of material fact and he was entitled to judgment as a matter of law on the issues of jurisdiction, venue, accident, injury, causation, temporary total disability, notice, and average weekly wage. A prior medical record did establish an issue as to whether Plaintiff’s injury occurred in the course of Plaintiff’s employment, but the physician that authored the medical record had since recanted the statements that created the issue of fact. Porter v. Drivers Management, LLC, Doc. 216 No. 0093.

5. Plaintiff sought partial summary judgment on the issues of subject matter

jurisdiction and employment via the statutory employer doctrine. Defendant alleged that, because it was a Texas corporation that had not conducted business in Nebraska and was not required to carry workers’ compensation under Texas law, Plaintiff was not entitled to judgment as a matter of law. The Court found that Defendant was an “employer” under Neb. Rev. Stat. 48-116 and was subject to the Court’s jurisdiction and because Defendant was operating outside of Texas law, it was required to carry workers’ compensation insurance. Therefore, Plaintiff was entitled to judgment as a matter of law. Glenn v. Tie Yard of Omaha, Doc. 213 No. 0735.

VI. Examples and Explanations of Unsuccessful Motions for Summary Judgment

1. Defendant sought summary judgment on a statute of limitations defense.

Plaintiff’s Petition alleged a shoulder injury in May of 1999. Plaintiff’s Petition was filed on October 6, 2016. Defendant filed a first report of injury on November 4, 2016. Medical records disclosed that Plaintiff did not complain of a

shoulder injury in connection with a work accident before or after the alleged date of injury. Defendant alleged that Plaintiff did not provide notice, and therefore, it was not obligated to file a first report of injury. Plaintiff’s affidavit alleged that he reported the work injury to his supervisor. The motion was denied because it was conceivable that the Court could find that Plaintiff did notify his supervisor, the Defendant did not file a first report of injury, and therefore the statute of limitations did not begin to run until the first report of injury was filed. Samson v. City of Omaha, Doc 216 No 1452.

2. Defendant sought summary judgment alleging that Plaintiff failed to provide sufficient notice. Plaintiff sustained an accident involving his left leg at work that was witnessed by a coworker, but when questioned, Plaintiff reported that he did not feel any physical injury. Within two weeks, Plaintiff informed his supervisor that he was experiencing pain in his left leg, but denied it was due to his work accident. The Court found that under the framework set forth in Scott v. Pepsi Cola Co., 249 Neb. 60, 541 N.W.2d 49 (1995), the Plaintiff was not required to provide an opinion as to the causal connection between employment and the injury and the Plaintiff did provide Defendant with enough information that would compel a reasonable employer to investigate further. Therefore, there was an issue of fact sufficient to defeat the motion for summary judgment. Martinez v. Tyson Fresh Meats, Inc., Doc 216 No 1368.

3. Plaintiff sought summary judgment on the essential issues of compensability,

temporary total disability, average weekly wage, and penalties. The Court found that Plaintiff was entitled to summary judgment on the essential issues of compensability, but denied the request for penalties because Plaintiff did not produce evidence sufficient to entitle him to judgment as a matter of law on the Plaintiff’s average weekly wage. Therefore, the Court was unable to assess a penalty. Martinez v. CMR Construction, Doc 215 No 1813.

4. Defendant sought summary judgment on the issue of whether Plaintiff’s injury

arose out of and in the course of her employment with Defendant. Plaintiff was injured on a company retreat. Defendant alleged that attendance at the company retreat was not mandatory, and therefore, Plaintiff’s injuries were not compensable. Plaintiff’s affidavits establish that she believed she “really had to attend” the retreat. The Court found that Plaintiff’s testimony was sufficient to establish a genuine issue of material fact. Neumeister v. QCS, Inc., Doc. 215 No. 1342

VII. Relevant Statutes and Rules A party seeking to recover in district court upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after the expiration of thirty days from the service of process on the opposing party or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in his or her favor upon all or any part thereof. Neb. Rev. Stat. 25-1330 A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory judgment is sought may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof. Neb. Rev. Stat. 25-1331 (1) The motion shall be served at least ten days before the time fixed for the hearing. The adverse party prior to the day of hearing may serve opposing affidavits. The judgment sought shall be rendered forthwith if the pleadings and the evidence admitted at the hearing show that there is no genuine dispute as to any material fact and that the moving party is entitled to a judgment as a matter of law. The evidence that may be received on a motion for summary judgment includes depositions, answers to interrogatories, admissions, stipulations, and affidavits. A summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is a genuine dispute as to the amount of damages. (2) A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (a) Citing to particular parts of materials in the record, including depositions, answers to interrogatories, admissions, stipulations, affidavits, or other materials; or (b) Showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact. (3) If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by subsection (2) of this section, the court may: (a) Give an opportunity to properly support or address the fact; (b) Consider the fact undisputed for purposes of the motion; (c) Grant summary judgment if the motion and supporting materials, including the facts considered undisputed, show that the movant is entitled to summary judgment; or (d) Issue any other appropriate order. Neb. Rev. Stat. 25-1332 If on motion under sections 25-1330 to 25-1336 judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, the court at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating counsel, shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. It shall

thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed established, and the trial shall be conducted accordingly. Neb. Rev. Stat. 25-1333 Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith. The court may permit affidavits to be supplemented or opposed by depositions or by further affidavits. Neb. Rev. Stat. 25-1334 Should it appear from the affidavits of a party opposing the motion that he cannot for reasons stated present by affidavit facts essential to justify his opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just. Neb. Rev. Stat. 25-1335 Should it appear to the satisfaction of the court at any time that any of the affidavits presented pursuant to sections 25-1330 to 25-1336 are presented in bad faith or solely for the purpose of delay, the court shall forthwith order the party employing them to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused him to incur, including reasonable attorney's fees, and any offending party or attorney may be adjudged guilty of contempt. Neb. Rev. Stat. 25-1336 (1) The Nebraska Workers' Compensation Court or any judge thereof may rule upon any motion addressed to the court by any party to a suit or proceeding, including, but not limited to, motions for summary judgment or other motions for judgment on the pleadings but not including motions for new trial. Several objects may be included in the same motion, if they all grow out of or are connected with the action or proceeding in which it is made. (2) Parties to a dispute which might be the subject of an action under the Nebraska Workers' Compensation Act may file a motion for an order regarding the dispute without first filing a petition. (3) If notice of a motion is required, the notice shall be in writing and shall state: (a) The names of the parties to the action, proceeding, or dispute in which it is to be made; (b) the name of the judge before whom it is to be made; (c) the time and place of hearing; and (d) the nature and terms of the order or orders to be applied for. Notice shall be served a reasonable time before the hearing as provided in the rules of the compensation court. Neb. Rev. Stat. 48-162.03

B. Every pleading subsequent to the petition, every written motion, every document relating to discovery or disclosure, and every written notice, appearance, designation of record on appeal, and similar document shall be served upon each of the parties by the initiating party. Except as provided in Rule 3,E, such party shall file proof of service with the court. Service and proof of service shall be made as follows: 1. Service upon an attorney or upon a party not represented by an attorney shall be made by: a. delivering the document to the person to be served; b. mailing it to the person to be served by first-class mail at the address designated pursuant to Rule 3,G, or if none is so designated, to the last-known address of the person; c. leaving it at the person's office with the person's clerk or other person in charge thereof; or, if the office is closed or the person to be served has no office, leaving it at the person's dwelling house or usual place of abode with some person of suitable age and discretion then residing therein; d. transmitting it by facsimile to the person, if the person has designated a fax number pursuant to Rule 3,G; e. sending it to the person by electronic means if the person being served has designated an e-mail address pursuant to Rule 3,G; or f. delivering it by electronic or other means consented to in writing by the party being served. 2. Proof of service may be made by certificate of the attorney causing the service to be made or by certificate of the party not represented by an attorney. A certificate of service shall state the manner in which service was made on each person served. 3. Service by mail is complete upon mailing. Service by facsimile or electronic means is complete upon transmission, but it is not effective if the person attempting to make service learns that the attempted service did not reach the person to be served. 4. Any requirement that a document or notice be written or in writing is satisfied if the document or notice is served by electronic means pursuant to Rule 3,B,1. 5. Whenever a party has the right or is required to take some action within a prescribed period after the service of a notice or other document upon the party and the notice or document is served under Rule 3,B,1,b,d,e, or f, three days shall be added to the prescribed period. NE R WORK COMP CT Rule 3(B)

A. Medical and Vocational Rehabilitation. The Nebraska Workers' Compensation Court is not bound by the usual common law or statutory rules of evidence; and accordingly, with respect to medical evidence on hearings before a judge of said court, written reports by a physician or surgeon duly signed by him, her or them and itemized bills may, at the discretion of the court, be received in evidence in lieu of or in addition to the personal testimony of such physician or surgeon; with respect to evidence produced by vocational rehabilitation experts, physical therapists, and psychologists on hearings before a judge of said court, written reports by a vocational rehabilitation expert,

physical therapist, or psychologist duly signed by him, her or them and itemized bills may, at the discretion of the court, be received in evidence in lieu of or in addition to the personal testimony of such vocational rehabilitation expert, physical therapist, or psychologist. A sworn statement or deposition transcribed by a person authorized to take depositions is a signed, written report for purposes of this rule. A signed narrative report by a physician or surgeon, vocational rehabilitation expert, or psychologist setting forth the history, diagnosis, findings and conclusions of the physician or surgeon, vocational rehabilitation expert, or psychologist and which is relevant to the case shall be considered evidence on which a reasonably prudent person is accustomed to rely in the conduct of serious affairs. The Nebraska Workers' Compensation Court recognizes that such narrative reports are used daily by the insurance industry, attorneys, physicians and surgeons and other practitioners, and by the court itself in decision making concerning injuries under the jurisdiction of the court. Any party against whom the report may be used shall have the right, at the party's own initial expense, of cross examination of the physician or surgeon, vocational rehabilitation expert, or psychologist either by deposition or by arranging the appearance of the physician or surgeon, vocational rehabilitation expert, or psychologist at the hearing. Nothing in this rule shall prevent deposition or live testimony of the physician or surgeon, vocational rehabilitation expert, or psychologist. Unless exceptional cause is shown and extremely unusual circumstances exist, all evidence shall be submitted at the time of hearing. If the original of a deposition is not in the possession of a party who intends to offer it in evidence at a hearing, that party shall give notice to the party in possession of it that the deposition will be needed at the hearing. Upon receiving such notice, the party in possession of the deposition shall either make it available to the party who intends to offer it or produce it at the hearing. NE R WORK COMP CT Rule 10

IN THE NEBRASKA WORKERS’ COMPENSATION COURT

PLAINTIFF,

Plaintiff,

v.

DEFENDANT,

Defendant.

DOC. ____ NO. ____

MOTION FOR SUMMARY JUDGMENT

Plaintiff moves this Court for an Order granting Summary Judgment pursuant to

Neb. Rev. Stat. §48-162.03 on the basis that there is no genuine issue as to any material

fact and the Plaintiff is entitled to judgement as a matter of law on the following issues:

1. That the Nebraska Worker’s Compensation Court has subject matter over this

case.

2. That the Nebraska Worker’s Compensation Court has personal jurisdiction

over the parties.

3. That venue is proper in ___________, County, Nebraska.

4. That Plaintiff was an employee of Defendant ___________.

5. That Plaintiff suffered an “accident” on _______ as defined in Neb. Rev. Stat.

§48-151(2)

6. That Plaintiff suffered an “injury” from such accident as defined in Neb. Rev.

Stat. §48-151(4).

7. That Plaintiff properly notified Defendant of the accident pursuant to Neb.

Rev. Stat. §48-133.

8. That Plaintiff’s average weekly wage for purposes of calculating temporary

disability is $______ per week with a corresponding benefit rate of $_____.

9. That Plaintiff’s average weekly wage for purposes of calculating permanent


10. That Plaintiff’s injury arose out of Plaintiff’s employment with Defendant.

11. That Plaintiff’s accident occurred in the course of Plaintiff’s employment with

Defendant.

12. That Plaintiff’s accident caused Plaintiff’s injury to his/her __________.

13. That all medical treatment Plaintiff sought after ________ to present was

reasonable and necessary to diagnose and treat the ________ injury.

14. That all medical bills that have been presented to Defendant for payment in

connection with the __________ accident are fair and reasonable.

15. That Plaintiff reached maximum medical improvement for his right shoulder

on ____________.

16. That Plaintiff’s injury has caused a loss of earning capacity of ______ assessed

by ______________.

17. That Plaintiff provided the loss of earning capacity report to Defendant on

__________.

18. That there is no reasonable controversy as to Plaintiff’s entitlement to benefits

under the Nebraska Worker’s Compensation Act, Defendant has failed or

refused to provide those benefits, and it has been over 30 days from Plaintiff’s

notice of disability and notice of responsibility to pay those benefits. As a result

of Defendant’s delay Plaintiff is entitled to penalties, attorney’s fees, and

interest pursuant to Neb Rev. Stat. §48-125.

Wherefore, Plaintiff respectfully requests this Court hold a hearing, adduce

evidence, hear argument, study briefs to be submitted by the parties, and enter an Order

granting Plaintiff’s Motion for Summary Judgment, in whole or in part, and providing

any further relief the Court deems proper based on its findings

DATED: _______________.

PLAINTIFF, Plaintiff

By: ______________________

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on _____________ a true and correct copy of the foregoing document was served upon all parties of record as follows:

[X] Regular U.S. Mail [ ] Facsimile [ ] Hand Delivery [X] Email

_______________________________________

IN THE NEBRASKA WORKERS' COMPENSATION COURT

PLAINTIFF,

Plaintiff,

v. DEFENDANT,

Defendant.

DOC. ____ NO. _____

PROPOSED ORDER

This matter is before the Court upon the Plaintiff’s Motion for Summary Judgment.

The Court, having reviewed the file, the submissions of the Parties, heard arguments of

counsel, and being fully advised in the premises, hereby finds that there is no genuine

issue of material fact with respect to Plaintiff’s Motion and finds that Plaintiff’s Motion

should be, and hereby is, Granted/Partially granted.

The Court finds that there is no genuine issue of material fact as to the following:

1. That the Nebraska Worker’s Compensation Court has subject matter over this

case.

2. That the Nebraska Worker’s Compensation Court has personal jurisdiction

over the parties.

3. That venue is proper in ___________, County, Nebraska.

4. That Plaintiff was an employee of Defendant ___________.

5. That Plaintiff suffered an “accident” on _______ as defined in Neb. Rev. Stat.

§48-151(2)

6. That Plaintiff suffered an “injury” from such accident as defined in Neb. Rev.

Stat. §48-151(4).

7. That Plaintiff properly notified Defendant of the accident pursuant to Neb.

Rev. Stat. §48-133.

8. That Plaintiff’s average weekly wage for purposes of calculating temporary


9. That Plaintiff’s average weekly wage for purposes of calculating permanent


10. That Plaintiff’s injury arose out of Plaintiff’s employment with Defendant.

11. That Plaintiff’s accident occurred in the course of Plaintiff’s employment with

Defendant.

12. That Plaintiff’s accident caused Plaintiff’s injury to his/her __________.

13. That all medical treatment Plaintiff sought after ________ to present was

reasonable and necessary to diagnose and treat the ________ injury.

14. That all medical bills that have been presented to Defendant for payment in

connection with the __________ accident are fair and reasonable.

15. That Plaintiff reached maximum medical improvement for his right shoulder

on ____________.

16. That Plaintiff’s injury has caused a loss of earning capacity of ______ assessed

by ______________.

17. That Plaintiff provided the loss of earning capacity report to Defendant on

__________.

18. That there is no reasonable controversy as to Plaintiff’s entitlement to benefits

under the Nebraska Workers’ Compensation Act, Defendant has failed or

refused to provide those benefits, and it has been over 30 days from Plaintiff’s

notice of disability and notice of responsibility to pay those benefits. As a result

Plaintiff is entitled to penalties in the amount of $_________, attorney’s fees in

the amount of $___________, and interest pursuant to §48-125 in the amount of

$_________.

IT IS SO ORDERED.

Dated this _____ day of _______________, 2017.

____________________________________ JUDGE OF THE COURT

CERTIFICATE OF SERVICE

The undersigned hereby certifies that a true and correct copy of the foregoing Order was sent by ordinary United States mail, first class postage prepaid, on this ______ day of _______________, 2017, addressed as shown below to the following:

__________________________________

Court Developments in the Nebraska Workers’

Compensation Court Erin Fox, J.D.

Nebraska Workers’ Compensation Court


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Court Developments and Practice TipsCourt updates and some helpful best practices from the clerk’s office

What’s new at the Workers’ Compensation Court• Mail Delay– tips on dealing with snail (literally) mail

• http://dtsearch.wcc.ne.gov/• DT Search has a two-day delay between entry of a decision and availability on

the website, but that seems to be faster than receiving decisions via USPS.• Example: you tried a case in front of Judge Coe on August 15, 2017

• Search “Coe” to pull up his cases in reverse date order

• “F” Opinions are final orders (trial decisions). They can be basic dismissals without prejudice too, just sort through them until you find one that’s a substantive decision.

• Check the trial date of that case, and compare it to your date. You should have an idea of how long you’ll be waiting.

• Have your staff check for cases that have been submitted by searching decisions by parties’ names.

Releases

• §48-139(4): A release filed with the compensation court in accordance with subsection (3) of this section shall be final and conclusive as to all rights waived in the release unless procured by fraud. Amounts to be paid by the employer to the employee pursuant to such release shall be paid within thirty days of filing the release with the compensation court. Fifty percent shall be added for payments owed to the employee if made after thirty days after the date the release is filed with the compensation court. Upon making payment owed by the employer as set forth in the release, such release shall be a full and complete discharge from further liability for the employer on account of the injury, including future medical, surgical, or hospital expenses, unless such expenses are specifically excluded from the release, and the court shall enter an order of dismissal with prejudice as to all rights waived in the release.

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Releases

• Neb. Work. Comp. Ct. R. 47,J provides:

• For cases in which an order of dismissal is required pursuant to section 48-139(4), upon making payment owed by the employer as set forth in the release, the parties shall file a receipt, satisfaction, or joint stipulation for dismissal setting forth the amount(s) received by the employee from the employer. The parties shall also submit a proposed order of dismissal to be signed by the judge together with certificate of service of mailing to be signed by the clerk of the court via e-mail attachment sent to [email protected] or via e-filing. The e-mail attachment shall be in either editable Microsoft Word format (*.doc or *.docx) or Rich-Text Format (*.RTF) file formats. The subject line of the e-mail shall include the case name and number.

Dragon v. Cheesecake FactorySometimes amending just ain’t enough.

Releases and Penalties

• The Legislature provided that certain settlements are exempt from Court review and amended Neb. Rev. Stat. §48-139 to revise the Act accordingly.

• Holdsworth v. Greenwood Farmers Cooperative, 286 Neb. 49, 835 N.W.2d 30, (2013)

• Held that the Court did have jurisdiction to hear the employee’s claim for penalties for settlement paid more than 30 days after the release was filed. Jurisdiction relates to the Court’s authority to hear the case, which authority cannot be removed by the agreement of the parties.

• Held that an employee waives his or her right to ask for penalties when he or she files a release with the waivers required by Neb. Rev. Stat. §48-139 because penalties under Neb. Rev. Stat. §48-125 are among the rights available to employees under the Act.

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• 2014 Amendments• Clear from the legislative history that this amendment was specifically to address

Holdsworth and provide for a 50% penalty when payments in cases involving settlement by release were made more than 30 days after the release was filed with the Court.

• The effort may not have been successful. Dragon v. The Cheesecake Factory, Doc. 217, No. 0221, Judge Fridrich reasoned that the waiver language discussed in Holdsworth was not removed from the statute, and the rationale of that case still applies to bar a claimant from seeking a penalty for payments made pursuant to a release of liability that are more than 30 days after the release is filed.• Dragon was appealed, so we’ll wait with baited fiery breath to find out if the

2014 effort was sufficient to accomplish what was intended.


• •In your materials there is the slip law from LB961 showing the 2014 changes to Neb. Rev. Stat. §48-139. It added a penalty directly into Neb. Rev. Stat. §48-139.

• The amendments added a requirement that the Court dismiss the action with prejudice, and Rule 47,J provides the mechanism to accomplish that action.

• Requires a “release, satisfaction, or joint stipulation to dismiss.” The rationale for this requirement is that the Court must have some indication payment was made, owing to the language: “Upon making payment . . . The court shall enter.”

• The release, satisfaction, or joint stipulation should indicate that the employee received the funds.

• Amount in the stipulation is discretionary, but it should be included in the space on the Court’s release form.

Appeals to Nebraska Court of Appeals

Neb. Rev. Stat. §§48-182 and 48-185Follow Nebraska Appellate Rules:

https://supremecourt.nebraska.gov/supreme-court-rules/chapter-2-appeals/article-1-nebraska-court-rules-appellate-practice

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Tips for Appeal Documents

Things to remember when filing appeal documents with the Clerk’s office:• Per NWCC Rule 2,D,2 appeals can not be submitted via the court’s

eFiling system.• $75.00 cash deposit made payable to the NWCC (Neb. Rev. Stat. §25-

1914) and $26.00 court fees made payable to the Clerk of the Nebraska Supreme Court. (Neb. Rev. Stat. §§24-703, 33-107.01, 33-107.03, 33-154, 33-155, 33-156, 47-633)• Fees not required upon filing of the Notice of Appeal; however, greatly

appreciated. Clerk has two days after receiving appeal to certify and file the appeal with the NCOA.

• Request for Bill of Exceptions must be specific with hearing date(s) being requested and what portions of the record and/or exhibits should be included. (See Neb. Ct. R. App. §2-105(B)(1)(b))


• Neb. Ct. R. App. §2-104(A)(1), which provides appellant files a praecipe directing the clerk to prepare a transcript, which shall contain:• The pleadings upon which the case was tried, as designated by

the appellant; (emphasis added)• TIP: Requesting “All pleadings on file…” is not sufficient.• TIP: Written closing arguments, briefs on motions,

administrative filings, etc. are not part of the official record and cannot be included in a transcript of pleadings.

• The judgment, decree, or final order sought to be reversed, vacated, or modified, and the lower court's memorandum opinion, if any; and


• Neb. Ct. R. App. §2-104(A)(1), which provides appellant files a praecipe directing the clerk to prepare a transcript, which shall contain:• Pleadings and judgment (prior slide); and• A copy of the supersedeas bond, if any, given in the district court,

or, if none has been given, a recital of the fact that a bond for costs was given and approved in the district court, or a deposit made as required by Neb. Rev. Stat. §25-1914.

• In cases where an application to proceed in forma pauperis has been filed, a copy of the order of the district court granting or denying such.

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• Neb. Ct. R. App. §2-104(A)(3) states:• “...The clerk of the district court may not include, without specific written

request, a copy of any document not required under this rule.” (emphasis added)

• “The notice of appeal, praecipes for preparation of transcripts and bill of exceptions, and poverty affidavits shall not be included in the transcript, since they are previously certified and sent to this court.” (emphasis added)

• Neb. Ct. R. App. §2-104(D) states, “If a case has been appealed previously and a transcript filed in the appellate court in the earlier case, the transcript in the new appeal should contain only pleadings filed after the issuance of the mandate of this court in the prior case.” (emphasis added)

Video-Conference Trials

Neb. Rev. Stat. §48-177(3) provides authority for the NWCC to hold trials via video-conference.

NWCC has courtroom in Lincoln equipped with video conference equipment.

Generally, the court prefers to have a stipulation by the parties on file prior to the video trial.

NWCC utilizes Nebraska Video Conference Network (NVCN) to assist with scheduling and technical arrangements for a video trial. NVCN has access to State Voc Rehab sites across the state of Nebraska that are equipped with video-conference equipment that is compatible with NWCC equipment.

Video-Conference Trials

Clerk’s Office requires assistance from counsel to arrange a video trial.• If litigant is outside of Nebraska, assist with location where litigant will

appear.• If litigant will appear on personal device (i.e. laptop, tablet), assist with

facilitating setup and testing of connection. NVCN facilitates guest Jabber accounts and the testing prior to trial.

• NWCC can likely accommodate Skype, Google Hangouts, etc. type of video-conference with counsel/litigant assistance.

• Please give court as much notice as possible to make VC arrangements and leave time for testing and/or troubleshooting.

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QUESTIONS?

LB 961 LB 961

this state who shall be working for a governmental body, or agency as definedin section 29-2277, pursuant to any condition of probation, or communityservice as defined in section 29-2277, for injuries resulting in disability ordeath received in the performance of his or her duties as a member of suchmilitary forces, reserve force, department, agency, organization, or team, orservice, or pursuant to an order of any court, the wages of such a memberor person shall be taken to be those received by him or her from his or herregular employer, and he or she shall receive such proportion thereof as he orshe is entitled to under the provisions of section 48-121.

(b) If such a member or person under subdivision (1)(a) of thissection is not regularly employed by some other person, for the purpose ofsuch determination, it shall be deemed and assumed that he or she is receivingincome from his or her business or from other employment equivalent to wagesin an amount one and one-half times the maximum compensation rate for totaldisability.weekly income benefit specified in section 48-121.01.

(c) If the wages received for the performance of duties as a memberof such military forces, reserve force, department, agency, organization, orteam, or service exceed the wages received from a regular employer, suchmember shall be entitled to a rate of compensation based upon wages receivedas a member of such military forces, reserve force, department, agency,organization, or team. , or service.

(2) In determining the compensation rate to be paid any memberof a volunteer fire department in any rural or suburban fire protectiondistrict, city, village, or nonprofit corporation or any member of a volunteeremergency medical service, which fire department or emergency medical serviceis organized under the laws of the State of Nebraska, for injuries resultingin disability or death received in the performance of his or her duties asa member of such fire department or emergency medical service, it shall bedeemed and assumed that his or her wages are in an amount one and one-halftimes the maximum weekly income benefit specified in section 48-121.01 or thewages received by such member from his or her regular employment, whicheveris greater. Any member of such volunteer fire department or volunteeremergency medical service shall not lose his or her volunteer status under theNebraska Workers’ Compensation Act if such volunteer receives reimbursementfor expenses, reasonable benefits, or a nominal fee, a nominal per call fee,a nominal per shift fee, or combination thereof. It shall be conclusivelypresumed that a fee is nominal if the fee does not exceed twenty percent ofthe amount that otherwise would be required to hire a permanent employee forthe same services.

Sec. 11. Section 48-139, Reissue Revised Statutes of Nebraska, isamended to read:

48-139 (1)(a) Whenever an injured employee or his or her dependentsand the employer agree that the amounts of compensation due as periodicpayments for death, permanent disability, or claimed permanent disabilityunder the Nebraska Workers’ Compensation Act shall be commuted to one or morelump-sum payments, such settlement shall be submitted to the Nebraska Workers’Compensation Court for approval as provided in subsection (2) of this sectionif:

(i) The employee is not represented by counsel;(ii) The employee, at the time the settlement is executed, is

eligible for medicare, is a medicare beneficiary, or has a reasonableexpectation of becoming eligible for medicare within thirty months after thedate the settlement is executed;

(iii) Medical, surgical, or hospital expenses incurred for treatmentof the injury have been paid by medicaid and medicaid will not be reimbursedas part of the settlement;

(iv) Medical, surgical, or hospital expenses incurred for treatmentof the injury will not be fully paid as part of the settlement; or

(v) The settlement seeks to commute amounts of compensation due todependents of the employee.

(b) If such lump-sum settlement is not required to be submittedfor approval by the compensation court, a release shall be filed with thecompensation court as provided in subsection (3) of this section. Nothing inthis section shall be construed to increase the compensation court’s duties orauthority with respect to the approval of lump-sum settlements under the act.

(2)(a) An application for an order approving a lump-sum settlement,signed and verified by both parties, shall be filed with the clerk of thecompensation court and shall be entitled the same as an action by suchemployee or dependents against such employer. The application shall containa concise statement of the terms of the settlement or agreement sought tobe approved with a brief statement of the facts concerning the injury, thenature thereof, the wages received by the injured employee prior thereto, the

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LB 961 LB 961

nature of the employment, and such other matters as may be required by thecompensation court. The application may provide for payment of future medical,surgical, or hospital expenses incurred by the employee. The compensationcourt may hold a hearing on the application at a time and place selected bythe compensation court, and proof may be adduced and witnesses subpoenaed andexamined the same as in an action in equity.

(b) If the compensation court finds such lump-sum settlement ismade in conformity with the compensation schedule and for the best interestsof the employee or his or her dependents under all the circumstances, thecompensation court shall make an order approving the same. If such settlementis not approved, the compensation court may dismiss the application at thecost of the employer or continue the hearing, in the discretion of thecompensation court.

(c) Every such lump-sum settlement approved by order of thecompensation court shall be final and conclusive unless procured by fraud.Upon paying the amount approved by the compensation court, the employer (i)shall be discharged from further liability on account of the injury or death,other than liability for the payment of future medical, surgical, or hospitalexpenses if such liability is approved by the compensation court on theapplication of the parties, and (ii) shall be entitled to a duly executedrelease. Upon filing the release, the liability of the employer under anyagreement, award, finding, or decree shall be discharged of record.

(3) If such lump-sum settlement is not required to be submittedfor approval by the compensation court, a release shall be filed with thecompensation court in accordance with this subsection that is signed andverified by the employee and the employee’s attorney. Such release shall be afull and complete discharge from further liability for the employer on accountof the injury, including future medical, surgical, or hospital expenses,unless such expenses are specifically excluded from the release. The releaseshall be made on a form approved by the compensation court and shall contain astatement signed and verified by the employee that:

(a) The employee understands and waives all rights under theNebraska Workers’ Compensation Act, including, but not limited to:

(i) The right to receive weekly disability benefits, both temporaryand permanent;

(ii) The right to receive vocational rehabilitation services;(iii) The right to receive future medical, surgical, and hospital

services as provided in section 48-120, unless such services are specificallyexcluded from the release; and

(iv) The right to ask a judge of the compensation court to decidethe parties’ rights and obligations;

(b) The employee is not eligible for medicare, is not a currentmedicare beneficiary, and does not have a reasonable expectation of becomingeligible for medicare within thirty months after the date the settlement isexecuted;

(c) There are no medical, surgical, or hospital expenses incurredfor treatment of the injury which have been paid by medicaid and notreimbursed to medicaid by the employer as part of the settlement; and

(d) There are no medical, surgical, or hospital expenses incurredfor treatment of the injury that will remain unpaid after the settlement.

(4) A release filed with the compensation court in accordance withsubsection (3) of this section shall be final and conclusive as to all rightswaived in the release unless procured by fraud. Amounts to be paid by theemployer to the employee pursuant to such release shall be paid within thirtydays of filing the release with the compensation court. Fifty percent shallbe added for payments owed to the employee if made after thirty days afterthe date the release is filed with the compensation court. Upon making paymentowed by the employer as set forth in the release, such release shall be a fulland complete discharge from further liability for the employer on account ofthe injury, including future medical, surgical, or hospital expenses, unlesssuch expenses are specifically excluded from the release, and the court shallenter an order of dismissal with prejudice as to all rights waived in therelease.

(4) (5) The fees of the clerk of the compensation court for filing,docketing, and indexing an application for an order approving a lump-sumsettlement or filing a release as provided in this section shall be fifteendollars. The fees shall be remitted by the clerk to the State Treasurer forcredit to the Compensation Court Cash Fund.

Sec. 12. Section 48-601, Reissue Revised Statutes of Nebraska, isamended to read:

48-601 Sections 48-601 to 48-671 and sections 13 to 24 of this actshall be known and may be cited as the Employment Security Law.

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“Yes I Can…No I Can’t”: The Court’s Positions on Judicial

Authority in Light of Ancillary and Limited Jurisdiction

Paul Barta, J.D. Baylor, Enven, Curtiss, Grimit & Witt LLP


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“Yes I Can . . . No I Can’t”: The Court’s Positions on Judicial Authority in Light of Ancillary and

Limited Jurisdiction

PAUL BARTAERIC SUTTON

BAYLOR EVNEN2017

OMAHA OFFICE

619 NORTH 90TH STREET

OMAHA, NE 68114

PHONE 402.934.5468

LINCOLN MAIN OFFICE

WELLS FARGO CENTER

1248 O STREET SUITE 600

LINCOLN, NE 68508

PHONE 402.475.1075

FAX 402.475.9515

SYRACUSE OFFICE

920 12TH STREET

SYRACUSE, NE 68446

PHONE 402.269.3200

Ancillary Jurisdiction in the Nebraska Workers’ Compensation Court

Current statutory authority for ancillary jurisdiction of WCC in Neb. Rev. Stat. § 48-161:

• “All disputed claims for workers' compensation shall be submitted to the Nebraska Workers' Compensation Court for a finding, award, order, or judgment. Such compensation court shall have jurisdiction to decide any issue ancillary to the resolution of an employee's right to workers' compensation benefits, except that jurisdiction with respect to income withholding pursuant to the Income Withholding for Child Support Act shall be as provided in such act, jurisdiction with respect to garnishment for support shall be as provided in sections 25-1009 to 25-1056 and 43-512.09, and jurisdiction with respect to administrative attachment and bank matching shall be as provided in sections 43-3328 to 43-3339.”

– Where did this section originate?

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Brief History of Ancillary Jurisdiction in the Nebraska WCC

Genesis of the current statutory language:

• Thomas v. Omega Re-Bar, Inc., 234 Neb. 449 (1990)– Employer appealed WCC panel finding that employer had no insurance to

cover job-related injuries of employees.

– Omega Re-Bar appealed the decision of the WCC panel finding that Omega had no insurance to cover job-related injuries suffered by one of its employees. Essentially, the WCC panel found jurisdiction existed to make this insurance coverage determination.

– NE Supreme held that the WCC had no jurisdiction to determine workers’ compensation insurance coverage disputes.

– Nebraska Supreme Court concluded that the WCC lacked jurisdiction to resolve the insurance coverage dispute because there was no express grant of statutory authority for such jurisdiction.

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• NE Supreme recited traditional “WCC is a tribunal of limited and special jurisdiction and has only such authority as has been conferred on it by statute.”

• Important language:

– “Each of the statutes upon which Omega relies shares the same infirmity. None of them explicitly provide the compensation court with subject matter jurisdiction to hear insurance coverage disputes…Since there is no express grant of statutory authority, we hold that the Nebraska Workers’ Compensation Court does not possess subject matter jurisdiction to resolve insurance coverage disputes.” [453]

– In other words: without express grant of statutory authority, WCC lacks power to act.

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• Months after Thomas, Legislature passes LB 313, which includes amendment to § 48-161. The amendment added the following language:

• “Such compensation court shall have jurisdiction to decide any issue ancillary to the resolution of an employee's right to workers' compensation benefits.”

– Express purpose of LB 313 was to overturn Thomas v. Omega Re-Bar

– Sen. Coordsen: “This is the bill to address a problem that was brought to light by a Nebraska Supreme Court decision of, I believe the date was February 16, that had an impact on the operations of the Workers’ Compensation Court…”

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• Since LB 313’s changes to § 48-161 :

– Ancillary jurisdiction defined by interpretation of LB 313’s language

– There have been no major amendments to § 48-161 since 1990

– Limits of ancillary jurisdiction defined by the courts because of vague grant of statutory authority.

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What Does “Ancillary” Actually Mean?

Garnishment• ITT Hartford v. Rodriguez, 249 Neb. 445 (1996)

– Garnishment power– Employee brought garnishment action against employer to

recover benefits allegedly due and owing him under workers' compensation award in District Court.

– District Court concluded that it lacked subject matter jurisdiction and that jurisdiction was exclusive to WCC.

– Nebraska Supreme Court concluded that, because a garnishment proceeding to enforce an award of the compensation court is separate and distinct from the underlying workers' compensation case, it is not encompassed by ancillary jurisdiction provisions of § 48–161.

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Settlement

• Curtice v. Baldwin Filters Co., 4 Neb.App. 351 (1996)

– Injured worker sought specific performance of oral (lump sum) settlement agreement for her workers' compensation claim in NE District Court.

– District Court sustained a demurrer for lack of jurisdiction and because petition did not state cause of action. Injured worker appealed.

– Court of Appeals found that Plaintiff had a remedy under the WCA in WCC because WCC could use ancillary jurisdiction to determine validity of settlement agreement. Therefore, injured worker could not bring equitable action for specific performance in District Court.

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Concurrent Jurisdiction• Schweitzer v. American Nat. Red Cross, 256 Neb. 350 (1999)

(Nebraska Supreme Court)– Emergency health services worker brought action in District Court

alleging she was injured while working as defendant's employee when she slipped on stairs assisting a patron who was having a seizure but action was based on an unsafe worksite theory as there was no applicable workers’ compensation policy

– District Court granted defendants’ motion for summary judgment, finding WCC had exclusive jurisdiction over Plaintiff’s claims as she acknowledged being an employee. Plaintiff appealed.

– Supreme Court found that while § 48-161 provides the WCC with jurisdiction to decide insurance coverage issues, it does not provide exclusive jurisdiction to decide such issues.

– Therefore, there was a dispute of material fact (whether there was workers’ compensation insurance) and District Court should not have granted summary judgment.

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Insurer vs. Insurer Reimbursement

• Midwest PMS v. Olsen, 279 Neb. 492 (2010) (Nebraska Supreme Court)– After workers’ compensation plaintiff settled, employer’s former

workers’ compensation carrier filed a petition in WCC against subsequent compensation carrier, seeking reimbursement for benefits it has paid.

– Carrier's subrogation claim was ancillary to the Workers' Compensation Court's exercise of jurisdiction over plaintiff's lump-sum settlement with his employer, and thus WCC had jurisdiction to consider the merits of subrogation claim.

– Second insurer argued that request in the WCC was improper as there was no underlying remaining Plaintiff action.

– Also, the final resolution of an employee's right to workers' compensation benefits does not preclude an issue from being ancillary to the resolution of the employee's right to benefits within the meaning of provision of Workers' Compensation Act granting Workers' Compensation Court jurisdiction.

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Contempt & Enforcement of Award• Burnham v. Pacesetter Corp., 280 Neb. 707 (2010)

– Plaintiff filed two motions in WCC: one to enforce compensation award and one to find workers’ compensation insurer in contempt

– Supreme Court holds that neither § 48-161 nor any other provision of the WCA give the WCC authority to issue contempt citations AND WCC lacks authority to enforce collection of award

– Court notes that main purpose behind giving WCC ancillary jurisdiction in § 48-161 was to prevent a delay in payment of benefits. The power to issue contempt orders has traditionally been reserved for district court.

– Court notes that Neb.Rev.Stat. § 48–188 gave Burnham a remedy (filing his WCC award with the district court, thus giving it the same effect as a District Court judgment)

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Attorney’s Fees Related to Subrogation

• Heesch v. Swimtastic Swim School, 20 Neb.App. 260 (2012)

– Can the Nebraska Workers' Compensation Court compel the Plaintiff's private health insurer, which was awarded its subrogation interest for payments it made on the Plaintiff's behalf, to pay an attorney fee to the Plaintiff's attorney?

– No. WCC lacked jurisdiction to grant an award of attorney fees to injured worker's counsel for enforcing the subrogation rights of worker's private insurer.

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• Observations and thoughts from above cases:

– Ancillary jurisdiction has not strayed far from insurance coverage disputes, e.g. it hasn’t been really stretched to encompass other “ancillary” issues.

– Ancillary jurisdiction does not grant powers absent from statutory framework, i.e. the power to issue a contempt citation.

– Ancillary jurisdiction is a product of a desire for efficiency, not a desire to drastically expand jurisdiction and powers of the WCC

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A Court of “Limited Jurisdiction” With Ancillary Jurisdiction?

Ubiquitous phrase (with slight variations) “The Workmen’s Compensation Court is a tribunal of limited and special jurisdiction and has only such authority as has been conferred on it by statute.” Smith v. Freemont Contract Carriers, 218 Neb. 652 (1984) (citing 81 Am.Jur.2d Workmen’s Compensation 80 (1979)).

– Exactly what authority is provided by statute and how have statutes amended this limited jurisdiction?

– How do judges square this language with the vague language of ancillary jurisdiction?

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Default Judgements

• Cruz-Morales v. Swift Beef Co., 275 Neb. 407 (2008)– Plaintiff filed an action against her employer in WCC. Employer failed

to answer. Plaintiff moved for a default judgment. WCC entered a default judgment, and employer appealed on the basis that the relief exceeded the statutory authority of the Court.

– Nebraska Supreme Court held that WCC had authority to rule on motions for default judgment.

– While it is a tribunal of limited and special jurisdiction, § 48-162.03(1) gives the compensation court authority to rule upon “any motion addressed to the court by any part to a suit or proceeding, including, but not limited to, motions for summary judgment or other motions for judgment on the pleadings but not including motions for new trial or motions for reconsideration.”• Motion for default judgment qualifies under § 48-162.03(1)

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Legislature adopted Neb.Rev.St. § 48-162.03 in 1997, statutes describes power of WCC to rule on various types of motions:

• (1) The Nebraska Workers' Compensation Court or any judge thereof may rule upon any motion addressed to the court by any party to a suit or proceeding, including, but not limited to, motions for summary judgment or other motions for judgment on the pleadings but not including motions for new trial. Several objects may be included in the same motion, if they all grow out of or are connected with the action or proceeding in which it is made.

• (2) Parties to a dispute which might be the subject of an action under the Nebraska Workers' Compensation Act may file a motion for an order regarding the dispute without first filing a petition.

• (3) If notice of a motion is required, the notice shall be in writing and shall state: (a) The names of the parties to the action, proceeding, or dispute in which it is to be made; (b) the name of the judge before whom it is to be made; (c) the time and place of hearing; and (d) the nature and terms of the order or orders to be applied for. Notice shall be served a reasonable time before the hearing as provided in the rules of the compensation court.

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Fee Disputes Between Attorney & Client

• Foster v. Bryan LGH Medical Center East, 272 Neb. 918 (2007)

– Attorney discharged by workers' compensation Plaintiff before trial. Attorney perfects attorney’s lien in WCC pursuant to § 48-108.

– Trial occurs, Plaintiff receives benefits, attorney files motion to establish amount of lien, WCC determined that attorney had been paid all he was entitled to and declined to award him further attorney fees or costs. Attorney appealed.

– The Court of Appeals dismissed finding WCC did not have jurisdiction to decide fee dispute, and appeal was taken to Nebraska Supreme Court.

– NE Supreme reversed and held that WCC did have jurisdiction to determine fee dispute arising out of attorney’s lien perfected under §48-108.

– Can a defense attorney do this?

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• Foster v. Bryan LGH Medical Center East, 272 Neb. 918 (2007) cont’d

– Supreme Court reads power into the statute, citing the “purpose” of the statute rather than the text:

• “The statute's language does not expressly require that for the compensation court to have the authority to enforce the lien, the attorney seeking enforcement be the plaintiff's current attorney. Rather, the purpose of the statute is to provide a general mechanism by which an attorney, who has represented a plaintiff in a workers' compensation action, may secure a lien on the plaintiff's award to ensure that the attorney receives his or her fees.”

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Modification of Award• Crabb v. Bishop Clarkson Memorial Hospital, 256 Neb. 636 (1999)

– WCC denied worker’s claim for benefits for hepatitis C allegedly resulting from needle-stick injury, Plaintiff petitioned for review, alleging prior ruling was tainted by fraud and requested modification of Award. WCC granted employer's motion to dismiss, review panel reversed. On remand, the trial court upheld its prior order of dismissal, review panel affirmed.

– Plaintiff appealed, arguing that WCC and panel erred by failing to set aside prior order of dismissal.

– While courts of general jurisdiction has inherent power to vacate or modify, statutorily created courts of limited and special jurisdiction (like WCC) do not have such authority.

– WCC empowered to modify an award only by those means specifically delineated in the act, request to vacate prior ruling almost 8 months after ruling had become final did not fall within grounds for modifying or vacating provided in § 48-170 and § 48-180, therefore, not authorized by statute

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• Corretjer v. Principal Life Insurance Co., 2016 WL 6081438 (Court of Appeals)

– WCC may impose discovery sanctions because the WCC has adopted discovery rules found in Neb. Ct. R. Disc. §§ 6-301 to 6-337

– These rules permit the court to sanction noncompliance with a discovery order by methods including dismissal of the action.

– No specific statutory authorization for discovery sanctions, however, WCC is empowered to “adopt and promulgate all reasonable rules and regulations necessary for carrying out the intent and purpose” of the WCA under § 48-163

– WC adopted Rules of Discovery and therefore had ability to issue discovery sanctions

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Contempt of Court

• Hofferber v. Hasting Utilities, 282 Neb. 215, 803 N.W.2d (2011)– Plaintiff fails to avail himself of medical treatment and violates order to

refrain from abusive conduct– WCC: “t]he remedy given to this Court for contempt and for

unreasonably refusing to cooperate by [Hofferber] is to terminate benefits and dismiss [Hofferber's] petition.”

– WCC Panel finds that WCC may not dismiss with prejudice to punish contemptuous behavior

– NE Supreme: “the compensation court is not authorized to dismiss a petition as a sanction for a party's conduct either because an injured worker failed to cooperate with treatment or rehabilitation or as an exercise of contempt authority.”• § 25–2121 permits a court of record to punish contempt “by fine

and imprisonment” but the power to dismiss an action is derived from inherent contempt authority, which the WCC lacks.

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Counterclaims/Pleading

• Interiano-Lopez v. Tyson Fresh Meats, Inc., 294 Neb. 586 (2016)

– Defendant filed counterclaim with answer, alleging that Plaintiff’s problems were caused by preexisting condition.

– Counterclaim not functional equivalent of a petition because no statutory procedure in WCA for Plaintiff to answer counterclaim.

– Nebraska Supreme Court holds that no WC statute authorizes a counterclaim. Therefore, counterclaims are not permitted in WCC.

– Court would not judicially expand the basic pleading structure enacted by the Legislature.

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Trial Level Decisions Regarding Ancillary and Limited Jurisdiction

• Doremus v. St. Paul Fire & Marine Insurance, 1995 WL 17135554 (Neb.Work.Comp.Ct.)– Plaintiff made claim for portion or all of escrowed subrogation amount

under Shelter Insurance Company v. Frohlich, 243 Neb. 111, 498 N.W.2d 74 (1993)

– Ancillary jurisdiction does not grant court subject mater jurisdiction to resolve questions of: pain and suffering, past and future loss of income, economic loss of use of property, mental anguish, a division of attorneys fees for prosecution of the third party claim, and expenses or whether or not a full and complete recovery has been made

– WCC is “tribunal of limited and special jurisdiction and has only such authority as has been conferred upon it by statute.”

– WCC says it has statutory authority to find right of subrogation exists (§ 48-118) but all other subrogation issues are for the trial court, in this case, NE district court

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• Ramos v. Carols Construction Co., 2005 WL 1539214 (Neb.Work.Comp.Ct.) (Judge Coe)

– Parties entered into a joint stipulation and motion to dismiss, the important part of which provided that Defendant would pay Plaintiff’s related medical bills.

– Plaintiff filed motion to set aside stipulated dismissal, alleging that medical bills had not been paid.

– WCC holds no statutory or case law authority that allows court to “set aside” prior order or judgment.

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• Kreutzer v. Cross v. American Family Mutual Insurance Co., 2010 WL 4970936 (Neb.Work.Comp.Ct.) (Judge Hoffert)

– Third party defendants file motions to dismiss third-party Petition in Workers’ Compensation Court alleging breach of contract, bad faith, and an unreasonable failure of an insurer (non-compensation/private health care carrier) to pay medical expenses.

– WCC could not expand ancillary jurisdiction under 48-161 to include such issues because it would involve the court in issues of equity.

– WCC lacks jurisdiction over claims for equitable relief, see Anthony v. Pre-Fab Transit Co., 239 Neb. 404, 476 N.W.2d 559 (1991).

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• Yost v. Davita, Inc. 2015 WL 999375 (Neb.Work.Comp.Ct.) (Judge Fridrich)– Court enters further award.

– After entry of further award, defendant files Motion to Reopen the Evidence or in the Alternative Motion to Modify Further Award Pursuant to § 48-180, § 48-162.03 and § 48-141

– WCC finds that it lacks “specific statutory authority” to re-open record of adjudicated case to receive new evidence

– Also notes that the substance of request was like a motion for new trial, which the court is expressly precluded from considering under § 48-162.03

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• Mitchell v. University of Nebraska at Lincoln and the State of Nebraska, 2004 WL 374028 (Judge Hoffert)

– Petition filed on 1/6/2003 alleging injury in 1996.

– Defendant filed motion for SJ because Plaintiff did not file petition within two years of date of injury.

– Plaintiff argued that the two year statue of limitations under § 48-173 should be tolled based on good faith reliance on a document that erroneously indicated payment within SOL period.

– Judge Hoffert: “The good faith reliance of the plaintiff and his counsel on the erroneous records…while a circumstance which engenders understanding and sympathy, does not serve to create an excuse for the failure to file the petition in a timely fashion. As is often noted, the Nebraska Workers' Compensation Court simply has no equity jurisdiction.”• In other words, no equitable tolling for good faith reliance on faulty

records.

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• Player v. Strong, 2013 WL 6040601 (Neb.Work.Comp.Ct.) (Judge Hoffert)– Plaintiff filed motion seeking an order from WCC granting him

in forma pauperis status

– Judge Hoffert cites familiar language: “the [Compensation] Court has only those powers which have been expressly conferred upon it by the Nebraska Legislature.”

– WCC said it lacked statutory authority to make such a determination, only has power expressly conferred by legislature. No statute granted WCC power to grant IFP status

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• Workers’ Compensation Court Can:

– Determine existence of workers’ compensation insurance (but WCC is not exclusive forum for this determination)

– Impose discovery sanctions

– Rule on motions for default judgment

– Determine attorney’s fee dispute for lien perfected under § 48-108

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• Workers’ Compensation Court Cannot:– Determine in forma pauperis status– Re-open record and receive new evidence after order entered– Decide issues of breach of contract, bad faith, and an unreasonable

failure of an insurer (non-compensation carrier) to pay medical expenses

– Set aside stipulated dismissal– Allow late filing based on equitable tolling – Decide issues of contribution and indemnification between employers

and insurers AFTER underlying compensation claim decided– Allow filing of counterclaim– Use equitable powers to modify award– Issue contempt citation– Enforce collection of award– Use garnishment to enforce award– Award attorney’s fees to injure worker’s counsel for enforcing

subrogation rights of worker’s private insurer

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DISCUSSION

• Is ancillary jurisdiction merely a mechanism to circumvent the limited jurisdiction of a statutorily created court?

• In practice, does the WCC only have those powers expressly conferred or does language of 48-161 allow court to expand its own powers beyond those expressly granted by Legislature/statute? Ex. No express statutory authority to decide insurance coverage disputes, that power is derived from 48-161.

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Lump-Sum Settlement Approval

Issues Brian Dales, J.D.

Nebraska Workers’ Compensation Court


10/27/2017

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Avoiding Common Lump Sum Settlement Approval Issues

Brian DalesStaff AttorneyNebraska Workers’ Compensation Court

[email protected]

Helpful Tools

Rule 47 is a good checklist for the information that should be included in the application.

The court’s website: Settlement Application and Proposed Order Approving LSS forms

can be downloaded at http://www.wcc.ne.gov/legal/settlement_application.aspx.

A Benefit Calculation Worksheet can be downloaded at http://www.wcc.ne.gov/legal/benefit_calculator.aspx.

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Most Common Issues – Medical Expenses

Pointers to Avoid Issues with Medical Expenses:

Even if disputed, provide a list of all medical expenses incurred by employee—prescriptions, mileage, doctor visits, etc.

The list should be an itemized summary; preferably not copies of bills or carrier printout of bills paid.

Include names of providers, amounts paid, payors (WC carrier, employee, health insurer, Medicaid, Medicare, etc.), any outstanding balance, and total of all expenses paid.

Expenses that are clearly unrelated should not be included. Example: the settlement is for a knee injury and a bill describes treatment for the flu or allergies.

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Most Common Issues – Medical ExpensesPointers to Avoid Medical Expense Issues (cont’d):

Verify that any bills awarded by the court are included in the list and have been paid.

If any bills are outstanding, the application should state that they will be paid by the WC carrier/employer, rather than the claimant. See Neb. Rev. Stat. §48-120(8).

Exception: If the total outstanding medical expenses are greater than the settlement amount, the application does not need to specify who will pay those outstanding expenses.

If any reimbursements for payment of medical services will be made as part of a settlement, the application and order should state that they will be paid by the employer/workers’ compensation carrier, rather than the claimant.

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Most Common Issues – Medical ExpensesPointers to Avoid Medical Expense Issues (cont’d):

If any medical expenses were paid by Medicaid, the application should include payments made by Medicaid and state the amount Medicaid is seeking for reimbursement. Also, the application and order should state that the employer/carrier will reimburse Medicaid directly.

If medical expenses will be paid or reimbursed as part of the settlement, the proposed order should state those amounts separately from the indemnity portion of the LSS amount.

If any expenses were or will be paid according to the fee schedule, the fee schedule amounts must be listed in the application.

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Pointers for Settlements that Leave Medical Open: If the application leaves medical liability open, the application must

state, “In the event that a dispute arises, as to payment of a medical expense, the parties may submit the matter to a judge of the compensation court for a determination.”

Note: Past medical liability is closed in an application which leaves future medical liability open, so any issues with past medical expenses should be resolved prior to filing the agreement with the court.

Ensure that it is clear from the order that medical liability is being left open.

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Pointers for Settlements that Leave Medical Open (cont’d): An application leaving medical liability open should leave all medical

liability open for the date(s) of injury at issue.

The application should not propose to close liability for particular expenses or expenses related to particular body parts or injuries related to the date(s) of injury being disposed.

Exception: Liability may be closed for a particular injury or expense if it has been adjudicated and a judge has determined it to be noncompensable.

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Pointers for Subsequent Settlements Closing Medical: In any subsequent settlements closing medical, include a list of

medical expenses incurred since the first application was submitted. If no expenses were incurred in the interim, the application should state the same.

Note: If the second application states that plaintiff or other person/entity paid the medical expenses in the interim, the application should state that defendant will reimburse that payer. See Neb. Rev. Stat. §48-120(8).

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Most Common Issues – Compromises

Pointers to Avoid Issues in Compromise Settlements: Include all information required by Rule 47, even if disputed.

Provide both sides of the evidence—including conflicting impairment ratings/LOE reports.

If affirmative defenses are provided to support a compromise, the application should include a detailed explanation of the defense(s) and any documentation supporting the defense(s), if applicable.

If there was an award or if all evidence indicates claimant is permanently and totally disabled, the settlement amount should cover all benefits due. If not, include information to support a compromise. There’s no “80% rule.”

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Most Common Issues – Compromises

Pointers to Avoid Issues in Compromise Settlements (cont’d): If support for compromise includes a rated age or reduced life

expectancy, provide a rated age report or other documentation which includes the basis for the rated age or reduced life expectancy. The rated age or reduced life expectancy should not be based on the workers’ compensation injury.

If the parties mediated in order to reach an agreement, the settlement application must still contain all of the usual information required. Parties cannot agree to anything in mediation that is contrary to the Act, court rules, or court policies.

A common example is when the parties agree in mediation that the claimant will pay outstanding medical expenses. The court will ask the parties to revise the application to state that defendant will pay the outstanding medical expenses.

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Most Common Issues – Medicare

Pointers to Avoid Medicare Issues: Provide the claimant’s Medicare status: Not a beneficiary, eligible or

current beneficiary, or reasonable expectation of becoming a beneficiary and the date of expected Medicare eligibility.

When necessary, obtain CMS approval prior to submitting the application and provide a copy of the CMS approval letter. Refer to the court’s MSA guidelines to determine whether the application needs to address Medicare’s interests and whether CMS review is necessary. See the court’s MSA guidelines at http://www.wcc.ne.gov/legal/medicare_set-aside_lss_guidelines.pdf.

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Most Common Issues – Medicare Pointers to Avoid Medicare Issues (cont’d): The $25,000 and $250,000 total settlement amount (TSA) CMS

review thresholds includes any money paid for release of liability.

The CMS MSA Reference Guide on the CMS website has a list (not all-inclusive) of several types of payments included in the total settlement amount. See 10.5.3 of the Reference Guide downloadable at https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/WCMSA-Overview.html.

If the claimant is a current Medicare beneficiary when the settlement application is executed, the application must state whether a conditional payment investigation through the Centers for Medicare and Medicaid Services has been completed, and include the specific conditional payment reimbursement language required by Rule 47 (B)(12).

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Most Common Issues – Annuities To Avoid Issues with Annuities, Include: The terms of the annuity/structured settlement.

The name of the annuity carrier from which the annuity was purchased.

The cost to purchase the annuity/structured settlement.

A statement that the workers’ compensation insurer, risk management pool, or self-insured employer shall be responsible for all payments in the application in case the annuity carrier or any entity to which the annuity has been assigned fails to fulfill any of its obligations.

A statement that the owner of the annuity or structured settlement shall be someone other than the employee or other beneficiary, and that the employee or other beneficiary shall have no control over or right to transfer the annuity or structured settlement.

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Most Common Issues – Annuities

Additional Pointers to Avoid Issues with Annuities: Ensure that there are no provisions in the application or attachments

which conflict with the language required by Rule 47(B)(10).

A copy of any annuity/structured settlement agreement is not required and they commonly contain language that conflicts with the language required by Rule 47(B)(10). So they should not be included with the application or should be revised so that they do not conflict with the language required by Rule 47(B)(10).

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Less Common Issues – Medical Reports

Pointers to Avoid Issues with Medical Reports: Ensure that medical documentation intended to be submitted is

attached to applications.

Include at least one medical report signed by an attending physician.

Report(s) should include information such as diagnosis, type of treatment, extent of impairment, restrictions and release from care/maximum medical improvement.

Reports by physical therapists and physician’s assistants providing impairment ratings, restrictions or causation should also be affirmed by a physician.

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Less Common Issues – Member Injuries

Pointers to Avoid Issues Involving Member Injuries: Reports should clearly specify whether impairment ratings are whole

body impairments or are to a particular member.

Permanent benefits should be calculated using an impairment rating which corresponds with the member injury, specifically the site of the residual impairment.

In settlements involving amputations, amputations are calculated separately under §48-121(3) so benefits should be calculated accordingly.

In settlements involving eye injuries, impairment ratings should be based on uncorrected vision and benefits should be calculated accordingly.

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Less Common Issues – Miscellaneous

To Avoid Issues Involving Employee’s salary: Provide the hourly/daily/output rate of wages the employee earned

immediately prior to the accident. Permanent benefits should be calculated using that rate or the AWW, whichever is higher.

To Avoid Issues Involving Temporary Disability: List all the dates of temporary disability the employee incurred,

including the waiting period and any disputed dates. Provide the total dollar amount of temporary disability paid, not just the rate and number of weeks.

If an employee returned to work prior to reaching maximum medical improvement, it may be helpful to include medical documentation indicating when the employee was released to return to work or specifying in the application the date an employee returned to work.

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To Avoid Issues with Permanent Impairment Sustained/Paid: Provide the total dollar amount of permanent disability paid, not just

the number of weeks.

The amount paid in permanent disability benefits should be separate from the settlement amount so there is no confusion between the amount previously paid in permanent benefits and the settlement amount.

One exception to this is in cases where parties agree that an employer/insurance carrier will continue to pay permanent benefits weekly until a settlement is approved and then subtract those payments from the settlement amount. In such cases, ensure that any permanent benefits already paid which will not be subtracted from the settlement amount are listed separately from the settlement amount.

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To Avoid Subrogation Issues: Include the third party settlement amount and any portion of it being

paid to an employer/insurer.

State the extent of the employer’s/insurer’s participation in achieving any third party recovery.

To Avoid Return to Work/Vocational Rehabilitation Issues: Provide the claimant’s current work status, including the date started,

the type of work and the wage, and if the claimant has not returned to work, provide the claimant’s reasons for waiving vocational rehabilitation.

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Death CasesTo Avoid Issues in Death Cases: Provide all beneficiaries’ dates of birth.

Provide proof of conservatorship or other protection of any beneficiaries who are minor children.

Provide the distribution of settlement proceeds between any beneficiaries.

For any children who have turned 19, ensure that they or their representative has signed the application.

When appropriate, state whether the child attended college as a full-time student in an accredited educational institution.

Remember the decedent’s estate. If an application is releasing any workers’ compensation benefits owed to a decedent’s estate, ensure that the application provides the representative of the estate and that the representative of the estate or their representative has signed the application. 20

Procedures for RespondingTo Provide Additional Information and/or Revisions: Provide an amended application or a joint stipulation along with a

revised order and any attachments. There is no filing fee for either document.

Joint stipulations are intended to be used to make minor changes or provide any additional information or attachments not included with the original application. In most instances, joint stipulations can be used to respond. Orders approving the original lump sum settlement and joint stipulation should be included with joint stipulations.

Amended applications are intended to replace the entire original application and attachments. They are intended to be used when more significant changes need to be made to the original application. They should look just like normal applications but should be captioned as amended applications and should include all attachments. Orders approving the amended application should be included with amended applications.

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Procedures for RespondingTo Provide Additional Information and/or Revisions (cont’d): Amended applications can also be used to make minor changes or

provide any additional information not included with the original lump sum settlement if the parties choose to use an amended lump sum settlement rather than a joint stipulation.

Amended applications and joint stipulations can be submitted by sending them to the court or by eFiling them. They can be sent to the court for review before any necessary signatures are obtained or before they are eFiled.

Staff attorneys will inform parties how to respond and can provide any additional guidance necessary.

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