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Injured Worker Awarded Extra for Insurance Company Mishandling

Vermont Workers Compensation


07-98WC. Berno v. Stripping Unlimited, Inc

February 6, 1998

State File No. B-02901

By: Margaret A. Mangan

Hearing Officer

For: Steve Janson


Opinion No. 07-98WC

Randolph O. Berno, Claimant,


Stripping Unlimited, Inc. and Farm Family Mutual Ins. Co., Defendant.

Submitted on medical records and claimant’s brief.

Record closed on September 11, 1997.

APPEARANCES: Attorney Joseph C. Galanes for the claimant

Attorney Charles N. Hurt, Jr. for the defendant

By agreement of the parties, this case was to be submitted on medical records and the attorneys’ legal briefs. Defense counsel did not submit a brief nor did he ask for an extension of the filing deadline.


1. Permanent Partial Disability Benefits under 21 V.S.A. §648.

2. Attorney fees and costs under 21 V.S.A. §678(a).

3. Interest at the legal rate of 12% from July 26, 1988 to the date defendant makes payment of all benefits due and owing. FINDINGS OF FACT:

1. On April 18, 1988 the claimant suffered a personal injury when he was driving a truck on the job in his business.

2. At all times relevant to this action, claimant was the owner and an employee of Stripping Unlimited, Inc., and defendant was his employer within the meaning of the Workers’ Compensation Act.

3. On May 10, 1988, Dr. Nancy Binter performed spinal surgery, a hemilaminotomy and discectomy to remove the extruded disk from claimant’s right L5-S1 interspace. Claimant did very well postoperatively. He recovered without any indication of residual pain or rigidity.

4. Farm Family Mutual Insurance Company was the workers’ compensation insurance carrier for Stripping Unlimited, Inc. on the date of the accident.

5. Claimant’s average weekly wage for the twelve weeks before the accident was 0. His effective compensation rate at the time of injury was 0.

6. On August 8, 1988, defendant employer filed a First Report of Injury.

7. Farm Family Mutual Insurance Company initially denied claimant’s claim that he suffered a work-related injury. As a result, claimant filed a Notice of Hearing on September 6, 1988.

8. In an Agreement for Temporary Total Disability Compensation (Form 21) approved by the Department on February 13, 1989, the parties agreed that claimant herniated a disk while working on April 18, 1988.

9. Farm Family Mutual Insurance paid all medical benefits and temporary total disability benefits owed claimant.

10. Claimant received ten weeks of temporary total disability benefits. His temporary benefits were for the period from the date of injury through June 26, 1988.

11. Farm Family Mutual Insurance never had claimant evaluated for permanency and never paid any permanency benefits although it had full knowledge of all of the facts and circumstances of claimant’s medical condition and the surgical procedure performed.

12. On February 4, 1997, claimant’s counsel requested that Dr. Marcy Jones review claimant’s medical records. Claimant’s counsel asked Dr. Jones: (1) whether claimant had any permanent injury as a result of his work-accident; and, if so (2) what degree of permanency, as defined by the AMA guidelines, he has because of the job injury.

13. In a written report dated February 14, 1997, Dr. Jones opined, based on his review of the relevant medical records, including those of treating physicians Dr. John Peterson and Dr. Nancy Binter, that claimant suffered a permanent impairment which is 8% whole person, or 13.5% of his spine, as a result of his 1988 work injury.

14. Defendant has not offered any expert opinion to challenge the permanency evaluation of Dr. Jones.

15. Farm Family Mutual Insurance Company refuses to pay any permanent partial disability.

16. The claimant’s attorneys have incurred 4.35 in reasonable and necessary costs. Claimant’s attorney submitted a copy of a contingency fee agreement and an affidavit clearly itemizing the expenses.


1. Vermont’s Workers’ Compensation Act is remedial in nature and should be liberally construed in favor of the injured worker to accomplish its humane purpose. Montgomery v. Brinver Corp., 142 Vt. 461 (1983). No injured employee should be excluded from coverage under the Workers’ Compensation Act unless the law clearly intends such exclusion or termination of benefits. Id.

2. In workers’ compensation cases, the claimant has the initial burden of establishing the facts essential to the rights asserted. Goodwin v. Fairbanks, Morse and Company, 123 Vt. 161 (1962). The claimant must establish by sufficient competent evidence the character and extent of the injury or disability, and the causal connection between the injury and the employment. Rothfarb v. Camp Awanee, Inc., 116 Vt. 172 (1949); Egbert v. The Book Press, 144 Vt. 367 (1984).

3. Defendant has not offered any evidence disputing the fact that claimant suffered a work-related injury on April 18, 1988; that he has a permanent impairment of 13.5% of the spine as a result of that injury; and that he is entitled to receive 44.55 weeks of permanent partial disability benefits at a rate of 0 per week.

4. Defendant had an affirmative obligation to investigate whether or not claimant suffered any permanent impairment as a result of his work related injury. Heaney v. Southwestern Vermont Medical Center, Op. No. 22-96WC (Apr. 29, 1996). It failed to carry out its obligation and refuses to negotiate this claim in good faith.

5. In Heaney, a dispute arose between two workers’ compensation insurers. Ms. Heaney suffered a work injury to her back in 1977 that necessitated surgical removal of a damaged disk. The first workers’ compensation insurer failed to pay any permanency, failed to advise the claimant of her entitlement to permanency, and failed to request any report reflecting a permanency evaluation. In 1991, the claimant once again injured her back at work. She underwent a second operation and was assigned a permanency of 29.5% by her treating physician. The second insurer paid the resulting permanency and sought reimbursement in the amount of 10% from the first insurer who denied any responsibility.

6. The Commissioner held that the first insurer was responsible for ensuring that all appropriate compensation was paid, and its failure to do so at the time the permanency was due barred it from arguing about the inadequacy of the evidence of its obligation. Id. See also, Goslant v. Cody Chevrolet, Op. No. 41-95WC.

7. It does not matter that there was no second injury in this case. “Had there been no second injury, had it only been that the claimant had, rather late in the day, discovered the improper adjusting of her claim, the result should not and would not be different.” Heaney, supra.

8. The Heany case was clear because the insurer, by handling the claim, had assumed all the obligations inherent in the workers’ compensation system. “Included in those obligations was the need to determine expeditiously the permanent impairment attributable to the claimant’s work injury, whether by inquiring of her own physician or obtaining the services of its own physician to evaluate the claimant. Its failure to do its job at the appropriate time neither allows it to cry foul now when the treating doctor gives his opinion nor relieves it of its duty to pay the amount owed to the claimant [19 years earlier] at the time of the original surgery.” Id.

9. This case is no different. Defendant insurer acknowledged that claimant’s injury was compensable in the fall of 1988. It signed a Form 21 admitting that claimant’s injury was compensable on December 1, 1988 – nearly half a year after claimant’s surgery.

10. Defendant had the legal right to request and obtain all relevant medical records and ask that claimant submit to an independent medical evaluation. It must be presumed that the insurer had full knowledge of all of the facts and circumstances of the case when it executed the Form 21.

11. Farm Family Mutual Insurance Company failed to pay any permanency, failed to advise the claimant of his entitlement to permanency, and failed to request any report reflecting a permanency evaluation.

12. It is reasonable to infer from the evidence presented that defendant insurer attempted to take advantage of an injured worker unrepresented by counsel.

13. The AMA Guides to Permanent Impairment 3rd edition, in effect at the time this claimant was injured, like the current edition, presumes that herniated disc surgery results in some degree of permanent partial disability. Claimant is entitled to the permanency benefits owed him. We assume that claimant reached a medical end result a year after his surgery.

14. The mere passage of time cannot discharge Farm Family’s obligation to claimant who never entered into a final settlement agreement with Farm Family. Claimant has no information that Farm Family investigated whether claimant suffered any permanent impairment. The only agreement of record is an agreement to pay temporary disability during his disability (Form 21).

15. Because this is not a review of an award, the six year limitation of 21 V.S.A. §668 does not apply. Nor does the prohibition against reopening a settled case apply, see Bousquet v. Howe Scale Company, 96 Vt. 364 (1923), because this case had never been settled. The Form 21 establishes the claimant’s entitlement to compensation during the period of temporary total disability, nothing more. Gilbeau v. CEPCO, Inc., Op. No. 24-95WC (May 23, 1995); it cannot be regarded as a final settlement agreement.

16. Claimant is entitled to an award of 44.55 weeks of permanent partial disability benefits paid at the rate of 0 per week.

17. Defendant agreed to submit this case to the Department on briefs. It specifically waived its right to present evidence beyond that contained in the medical records and the department’s file.

18. Claimant is entitled to an award of interest at the statutory rate of 12% starting with the date he reached a medical end result (May 10, 1989) and running to the date of payment. Marsigli Estate v. Granite City Auto Sales; 124 Vt. 467 (1965) (Marsigli II); Thivierge v. Groleau, Op. No. 67-94WC (Apr. 20, 1995)

19. Pursuant to 21 V.S.A. §678, claimant’s entitlement to reasonable and necessary costs is a matter of law; his right to attorney’s fees is a matter of discretion. Morrisseau v. Legac, 123 Vt. 70 (1962). The claimant, having prevailed in this case because of his attorney’s efforts, is awarded attorneys’ fees in the amount of 20% of the value of the recovery obtained not to exceed ,000 and 4.35 in costs.


Based on these Findings of Fact and Conclusions of Law, defendant is ordered to pay:

1. 44.55 weeks of permanent partial disability benefits pursuant to 21 V.S.A. §648;

2. Attorney’s fees of 20% of the total award, not to exceed ,000 and 4.35 in costs;

3. Interest on the permanent partial disability award at the rate of 12% from May 10, 1989 to the date of payment by defendant.

Dated at Montpelier, Vermont, this __6th___ day of February, 1998. Steve Janson



Areas Served: Galanes Law serves clients in Vermont cities such as Bristol, Norwich, Brandon, Barre, Bennington, White River Junction, Castleton, Ludlow, Montpelier, Manchester, Middlebury, Brattleboro, Hartford, throughout Windham County, Windsor County and Orange County; and Hanover, Lebanon and Grafton County in New Hampshire.

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