Tom J. Vanden Heuvel Applicant
James Calmes & Sons Employer
United Fire & Cas. Co. Insurer
No. 2018-000284
Wisconsin Workers Compensation
State of Wisconsin Labor and Industry Review Commission
February 18, 2021
Atty.
Tony W. Welhouse
Atty.
Kurt R. Anderson.
WORKER’S
COMPENSATION DECISION 1
Michael H. Gillick, Chairperson.
Order
The commission modifies (rewrites) and affirms the decision
of the administrative law judge. Accordingly, the commission
dismisses the applicant’s claim for the bad faith
penalty against the respondent for filing the petition for
review of the September 6, 2018, administrative law judge
decision. Jurisdiction remains reserved for all other claims
the applicant may make, consistent with the
commission’s July 26, 2019, interlocutory order in this
matter, as modified on August 15, 2019.
By the
Commission:
David
B. Falstad, Commissioner, Georgia E. Maxwell,
Commissioner.
Procedural
Posture
On July
26, 2019, the commission issued a decision, finding that the
applicant sustained a work injury in the course of his
employment and awarding benefits. The commission also found
that the respondent’s failure to pay benefits was an
act of bad faith, and the commission affirmed Administrative
Law Judge Roy Sass’s decision and assessment of the
maximum bad faith penalty of $30,000. The respondent did not
appeal the commission’s decision and paid the benefits
due and penalty assessment. In November of 2019, the
applicant filed a hearing application alleging that the
respondent had acted in bad faith when it petitioned for
commission review of Judge Sass’s decision.[2] There was no
hearing on this second bad faith issue, and the matter was
decided on briefs by Administrative Law Judge Edward W.J.
Falkner in a decision dated June 25, 2020. Judge Falkner
dismissed the application for the additional bad faith claim,
and the applicant has appealed.
The
commission has considered the petition and the positions of
the parties. Based on its review, the commission modifies
(rewrites) and affirms the decision of the administrative law
judge, and makes the following:
FINDINGS
OF FACT AND CONCLUSIONS OF LAW
1.
Multiple bad faith claims may be filed in a single
worker’s compensation case, including, in rare
circumstances, for filing a petition for commission review.
However, where a respondent is continuing to deny liability
on a claim and has presented some relevant evidence at a
hearing, and files a timely petition for review of an
administrative law judge’s decision that awards or
denies compensation, the commission will not find the act of
filing a petition for review itself to be an act of bad
faith, absent extraordinary circumstances and clear and
convincing evidence that the petition was intentionally filed
solely for malicious purposes. Within a single claim with an
ongoing denial of benefits, continuous appeals may be a
factor to consider in determining the amount of the
award, but a petition for review would not ordinarily
constitute a discrete event or occurrence of nonpayment that
would subject a respondent to an additional bad faith claim.
Nevertheless, there are circumstances in an ongoing claim
where the filing of a petition for commission review could
abuse the review process, so the commission does not preclude
the possibility of a bad faith claim for filing a petition
for commission review under any and all circumstances.
2. The
respondent did not act in bad faith when it petitioned for
commission review of Judge Sass’s September 6, 2018,
decision.
MEMORANDUM
OPINION
The
Commission’s July 26, 2019, Decision
The
commission’s July 2019 decision is available on the
commission’s website.[3] Briefly, the applicant worked as a project
manager in construction for the employer. He was injured when
he fell off a 10-foot ladder when he was attempting to use a
nail gun to affix a shadowbox to a wall with a coworker. The
applicant sustained rib, ulnar, and thoracic compression
fractures that required him to undergo surgery. The
respondent denied that the applicant sustained the injuries
in the course of his employment and asserted that the
applicant self-inflicted his injuries.
The
respondent’s evidence that the applicant self-inflicted
his injuries was that the applicant was upset at the time of
the incident and may have suspected that he was going to be
fired, and that someone who was on the worksite may have
heard him say “watch this” before the time of his
injury. The witness who testified that the applicant may have
said “watch this” was not certain that this was
what the applicant had said because it was not directed
towards the witness, and that witness was not where the
actual fall happened. The commission credited the applicant
that he did not say, “watch this,” and noted:
“The applicant could have said something else, to
someone else, about anything else. That is no proof that the
applicant self-inflicted his injuries.”[4] The commission noted that
even if the applicant did say, “watch this,” it
would be speculative to presume that he intended to announce
that he was going to hurt himself rather than for any other
purpose, such as an instructive signal to his coworker.
Similarly, the commission found that even if the applicant
was upset, it would be speculative to find, based on the fact
that he was upset, that he fell off the ladder to hurt
himself. The commission noted that there could be several
reasons the applicant could have fallen if he was upset that
were not to self-inflict injuries. As a result, the
commission concluded that there was “no
non-speculative, substantial and credible evidence to support
a finding that the applicant self-inflicted his
injuries”; and, therefore, the commission found that
the applicant sustained a work injury when he fell from the
ladder.
The
commission next turned to the bad faith claim and determined
that a reasonable insurer would not deny a claim for someone
falling off a ladder at work based solely on a hunch that the
applicant might have known about and been upset about
potentially losing his job and might have said something like
“watch this” to someone. The commission concluded
that a finding that the applicant self-inflicted his injuries
was not a reasonable interpretation of the evidence and the
insurer had no reasonable basis to deny the claim. Since the
respondent relied on such speculative evidence, the
commission found that the respondent recklessly disregarded
that there was no reasonable basis for denying benefits, and
the commission affirmed the award of the maximum bad faith
penalty.
The
Parties’ Arguments
The
applicant alleges that it was bad faith for the respondent
even to petition the commission to review Judge Sass’s
decision because there was no evidence to support its defense
that the applicant self-inflicted his injuries. The applicant
argues that Wis. Stat. § 102.18(1)(bp) provides that an
employer or insurer may be penalized for each event
or occurrence of malice or bad faith, and the language of the
statute contemplates that more than one event or occurrence
of malice of bad faith may happen in a case. The applicant
asserts that the act of filing the petition for commission
review of the initial decision, when there was no credible
and substantial evidence that the applicant’s injury
was self-inflicted, was a second event or occurrence of bad
faith that subjects the respondent to an additional bad faith
penalty under the statute. He argues that the filing of the
petition was a different, discrete event from the initial bad
faith denial of benefits, which denied the applicant’s
claim once again.
According
to the applicant, parties have a right to file a petition
with the commission, but that does not mean that the
rationales for filing a petition could never be an event or
occurrence of bad faith. Since the respondent’s case
was not fairly debatable when they made their initial denial,
the applicant argues that it was not fairly debatable again
when they acted to deny the case by filing the petition for
review with the commission. Just because the commission
reviews a case de novo¸ the applicant argues,
this does not mean that a petition is not a separate event or
occurrence. The applicant characterizes the
respondent’s position as being that once a party
commits malice or bad faith, the party becomes immune from
further penalties; and the applicant argues that this is
ludicrous and would thwart the statute’s underlying
purpose to effect prompt payment of employee awards.
According to the...
