“The one great principle of the English law is, to make business for itself. There is no other principle as distinctly, certainly, and consistently maintained through all its narrow turnings.” Charles Dickens, “Bleak House.”
“The era of procrastination, of half measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences…”Winston Churchill
The Connecticut Supreme Court announced in De’Oliveira v. Liberty Mutual Insurance 273 Conn. 487, 870 A.2d 1066 (Conn. 2005) that it would not countenance any bad faith insurance claims against insurance carriers in the world of workers’ compensation. “We agree with the California Supreme Court that ‘injuries arising out of and in the course of the workers’ compensation claims fall within the scope of the exclusive remedy provisions because this process is tethered to a compensable injury. Indeed every employee who suffers a workplace injury must go through the claims process in order to recover compensation.’” Id. p. 503. Whatever redress the hapless claimant can seek will have to come in the form of the remedies available in Chapter 568 of the Connecticut General Statutes. Only in instances where the conduct is “so egregious that the insurer no longer could be deemed to be acting as an agent of the employer …” can a bad faith claim now be asserted. Id. p. 507
Until that 2005 decision, the superior courts had been divided as to whether or not there was a right to directly prosecute a civil claim against an insurer who engaged in conduct that would constitute undue delay. See Spencer v. Health Direct, Inc., Superior Court, judicial district of New London, Docket No. 544356, 1999 WL 30589 (January 8, 1999) (23 Conn. L. Rptr. 675) (listing decisions on both sides of the issue); see generally Brosnan v. Sacred Heart University, Superior Court judicial district of Fairfield, Docket No. 333544, 1997 WL 678197 (October 21, 1997) (20 Conn. L. Rptr. 509) (discussing at length arguments on both sides of the issue). The sword of Damocles that had been suspended above the heads of claims adjusters by that fine thread of horse hair finally snapped and clanged harmlessly at their feet, arguably emboldening some claim representatives to adjust claims with less than their characteristic alacrity. Now, in the post DeOliveiran era, it is settled law the unscrupulous conduct of a claims adjuster cannot be scrutinized in a civil forum with its more formidable remedies. This author has inquired of the Chairman’s office as to whether statistics are kept regarding the number of undue delay claims brought pre and post DeOliveira. The number of hearings per year calendared per year following the Supreme Court’s 2005 decision in DeOlivera has increased exponentially, as illustrated in this graphic.
2003 278 hearings
2004 267 hearings
2005 392 hearings
2006 473 hearings
2007 432 hearings
2008 772 hearings
As practitioners, we do have a number of arrows within our quiver that we can deploy to deal with cases in which an adjuster has not paid indemnity benefits and/or medical bills in a timely fashion. The scope of the materials today includes a brief review of those statutory remedies, as well as some of the case law which has provided the contours of the landscape evolving in this area.
CGS Sec 31-288(b)(1) provides in relevant part: “Whenever through the fault or neglect of an employer or insurer, the adjustment or payment of compensation due under this chapter is unduly delayed, such employer or insurer may be assessed by the commissioner hearing this claim a civil penalty of not more than one thousand dollars for each such case of delay, to be paid to the claimant.” It further allows for the commissioner to award a civil penalty up to five hundred dollars per hearing for each hearing the completion of which is unreasonably or unduly delayed. Further, C.G.S. §31-300 provides, in relevant part: “In cases where, through the fault or neglect of the employer or insurer…payments of compensation have been unduly delayed…the commissioner may include in the award in the case of undue delay in payments of compensation, interest at 12 per cent per annum and a reasonable attorney’s fee.”
The CRB has held that for a respondent to be penalized for undue delay under this statute, the trial commissioner must determine the action or inaction by the respondent “unduly delayed” benefits due the claimant. The trial commissioner must further find these delays were due to “fault or neglect.” These are factual questions which places the determination within the discretion of the trial commissioner. Kuhar v. Frank Mercede and Sons, Inc. 5250 CRB-7-07-7 (2008). When such a determination is reached the reviewing tribunal must extend “every reasonable presumption in favor of the action.” Daniels v. Alander, 268 Conn. 320, 330 (2004). The extent of that presumption was outlined in Berube v. Tim’s Painting, 5068 CRB-3-06-3 (March 13, 2007).
Further, the CRB and the Appellate Court have affirmed an award of $500.00 for each of 18 instances in which the respondents failed to make payments for benefit amounts which were undisputed, and eight instances in which the respondents unduly delayed payment to the claimant, pursuant to the then-existing version of Sec 31-288b, (at which time the maximum penalty was $500.00 per instance of undue delay). Hummel v. Marten Transport, LTD 5080 CRB-5-06-4 (2007); affirmed, 114 Conn. App. 822, 970 A.2d 834 (2009).
A finding of unreasonable contest is required in order for an award of attorney’s fees. Haugh v. Leake & Nelson, 1421 CRB-2-92-5 (March 15, 1994); C.G.S. §31-300. An attorney’s fee award for unreasonable contest is made when, after hearing the parties’ arguments and reviewing the evidence, the Workers Compensation Commissioner decides that the employer or insurer lacked a reasonable basis upon which to contest the injured workers’ request for benefits. Connecticut Workers’ Compensation After Reforms, Third Edition, Sevarino, 2008, citing Hicking v State of Connecticut/Department of Correction, 5026 CRB-2-05-11 (November 3, 2006)
If the claim continues to be delayed despite your reasonable efforts to rein in the wayward adjuster, then at some point you must request a hearing on undue delay. The nature of the delay can take one or more of many permutations: the claimant hasn’t received his weekly check because he’s fallen off repetitive pay; medical bills haven’t been paid; mileage hasn’t been reimbursed; a medical procedure hasn’t been approved, despite the fact that there is no respondent’s exam to contradict the treating physician’s recommended procedure. It is difficult to articulate a hard and fast rule as to when an employer or a carrier has irrevocably crossed over the line into the netherworld of the undue delay. Personally, I like to allow three strikes, but often the financial or health exigencies of the claimant dictate the speed with which I must file an undue claim. One can allow significantly more latitude in an adjuster’s failure to pay outstanding medical bills than in his/her failure to approve a three level lumbar fusion.
A strategical decision is whether you need to call the claims examiner as a witness. If so, how do you get the adjuster to testify in a deposition or at trial? There are at least two schools of thought in this regard. The first school of thought is that less is more. If the issue is failure to make timely indemnity payments you should be able to prove your case with a print out of the payment history from the adjuster. In that instance, just multiply the number of late checks, or unpaid medical bills, non-reimbursed mileage, etc times $1,000.00. In that scenario, the fault or neglect in the undue delay is so obvious as to speak for itself, res ipsa loquitur. In addition, if there were some reasonable explanation for the delay, presumably the respondent would have the claims representative testify. The trial commissioner may draw an adverse inference by the claims adjuster’s failure to testify. The Secondino rule, requiring an adverse inference as to the party failing to call a witness within the party’s power to call, and a witness who would naturally have been called to testify, has been legislatively overruled by CGS§52-216c which states: “No court in the trial of a civil action may instruct the jury that an inference unfavorable to any party’s cause maybe drawn from the failure of any party to call a witness at such trial. However, counsel for any party to the action shall be entitled to argue to the trier of fact during closing arguments … that the jury should draw an adverse inference from another party’s failure to call a witness who has been proven to be available to testify.” Therefore, it is clearly proper to argue to a commissioner that a witness’s failure to appear before the tribunal deserves an adverse inference.
On the other hand, delving into the life of an adjuster in a deposition to be used at trial can be quite enlightening. Recently, I took an adjuster’s deposition in a case in which she candidly testified that she had no system for calendaring when a claimant was about to fall off of repetitive pay. She would pre-program the claimant for 2 months at a time, then unless she happened to be in a particular file to set the reserves, there would be no way for her to know the repetitive pay was about to end, other than when she got the call from my office. She conceded that there were several instances of undue delay in this case. The downside to taking the deposition is that it can be expensive, and I’m not aware of any mechanism to recoup this expense.
Is the Respondent liable under 31-288b for every TT or TP check that is mailed late? There is certainly a good argument to be made that every such late check is subject to a penalty. The Respondent should not be held accountable for the vagaries of the US mail if a check is sent out in a timely fashion. But if a claimant falls off repetitive pay, the reality is that because of the mind-numbing complexity of ordering and mailing a check, the claimant is almost guaranteed that he will not receive his check for more than a week.