Case Title: Earheart v. Central Transport

Citation: 

Docket Number: M2023-00384-SC-WCM-WC

State: tennessee

Court: Tennessee Supreme Court

Date: 2023-11-22T00:00:00Z

Document:
FILED

 

IN THE SUPREME COURT OF TENNESSEE —
AT NASHVILLE a

 

 

JOHN EARHEART v. CENTRAL TRANSPORT ET AL.

Workers’ Compensation Appeals Board
No. 2019-06-1297

No, M2023-00384-SC-WCM-WC

 

JUDGMENT ORDER

‘This case is before the Court upon the motion for review filed by Central
‘Transport and Cherokee Insurance Company pursuant to Tennessee Code Annotated
section $0-6-225(e)(SAYii), the entire record, including the order of referral to the
Special Workers’ Compensation Appeals Panel, and the Panel's Opinion setting forth its
findings of fact and conclusions of law.

 

It appears to the Court that the motion for review is not well taken and is,
therefore, denied. The Panel’s findings of fact and conclusions of law, which are
incorporated by reference, are adopted and affirmed. ‘The decision of the Panel is made
the judgment of the Court,

Costs are assessed to Central Transport and Cherokee Insurance Company, for
which execution may issue if necessary.

It is so ORDERED.

PER CURIAM

HoLLy Kirby, CJ., not participating.
 

FILED
Nov 22 2023

Clerk a ie appetate Coots
Recdey |

 

 

IN THE SUPREME COURT OF TENNESSEE
‘SPECIAL WORKERS’ COMPENSATION APPEALS PANEL
AT NASHVILLE
Assigned on Briefs July 25, 2023

JOHN EARHEART, JR. v. CENTRAL TRANSPORT, ET AL,
Appeal from the Workers’ Compensation Appeals Board

Court of Workers’ Compensation Claims
‘No. 2019-06-1297 Kenneth M. Switzer, Judge

 

No, M2023-00384-SC-R3-WC ~ MAILED August 28, 2023

 

John Earheart, Jr. (“Employee”) filed a workers’ compensation claim against Cental
‘Transport (“Employer”) for temporary disability benefits. After initially denying the claim,
‘Employer ultimately agreed to pay the requested benefits on the day before the scheduled
expedited hearing. Following a compensation hearing, the Court of Workers’
Compensation Claims (“rial court") ordered Employer to pay Employee's attorney's fees
and costs under Tennessee Code Annotated section $0-6-226(8)(1)(B). The Workers’
Compensation Appeals Board (“Appeals Board”) affirmed. Employer appealed. The
appeal has been referred to the Special Workers" Compensation Appeals Pane! for
hearing and a report of findings of fact and conclusions of law pursuant to Tennessee
Supreme Court Rule SI. We affirm the judgment of the Appeals Board and adopt its
opinion as set forth in the attached Appendix.

  

‘Tenn, Code Ann. § $0-6-217(a)(2)(B) (Supp. 2021) Appeal as of Right;
Decision of the Workers’ Compensation Appeals Board Affirmed

DON R. ASH, SR. J, delivered the opinion ofthe court, in which HOLLY Kiray, J, and W.
‘MARK WARD, SR. J, joined.

Richard R, Clark, Jr, and Emily M. White, Nashville, Tennessee, for the appellants, Central
‘Transport and Cherokee Insurance Company.

D. Andrew Saulters, Nashville, Tennessee, forthe appellee, John Earheart, J.

 
OPINION

(On August 15, 2016, Employee injured his right hip while working as a delivery
river for Employer. His authorized treating physician, Dr. Thomas Byrd, performed
surgery in April 2017 to repair a torn labrum in his right hip. Following the hip surgery,
he began experiencing lower back pain radiating down his leg to his heel. After Dr. Byrd
released him to restricted work in March 2018, he performed clerical tasks at Employer's
Nashville terminal. In July 2018, Employer assigned him to light-duty work at Fifty
Forward, a seaior center. He continued to work at Fifty Forward until Employer terminated,
his employment in December 2018,

   

In July 2019, Employee filed a petition for benefit determination secking additional
‘medical treatment. After an expedited hearing in October 2020, the trial court ordered
Employer to provide separate panels of specialists to treat Employee's hip and back and
referred the case to the Compliance Program of the Bureau of Workers’ Compensation for
‘consideration of penalties. Employer did not appeal this order,

In January 2021, Employee filed another petition for benefit determination seeking
temporary disability benefits from when he was terminated in December 2018 to when he
obiained new employment in August 2019. Around the time of this filing, several
depositions were taken in Employee's federal case against Employer for retaliatory
discharge. An expedited hearing to address Employee's request for temporary disability
benefits was scieduled for May 13, 2021. An order entered by the tril court on May 17,
2021, memorialized several agreements: (1) on the day before the hearing, Employer
agreed to pay the requested temporary disability benefits in the amount of $22,023.36; 2)
at the bearing, Employer agreed to pay the requested twenty-five percent penalty inthe
amount of $5,505.84; (3) Employee's attomey agreed to reserve until the compensation
hearing his request for attomeys" fees; and (4) in light of these agreements, an expedited
heating did not take place.

[At the compensation hearing held on September 6, 2022, the only issue was
Employee's entitlement to attorneys’ fees and costs under Tennessee Code Annotated
section $0-6-226(d)(1)(B) for Employer's alleged wrongful failure to timely pay temporary
disability benefits. The trial court ordered Employer to pay $50,505.50 in attorneys’ fees
‘and costs to Employee's attomey. Employer appealed. The Appeals Board affirmed and
certified as final the trial court's order.
In this appeal, the sole issue is whether the tral court erred in ordering Employer to
pay Employee's attorneys’ fees and costs under section 50-6-226(d)(1)(B). Upon due
consideration, we affirm the judgment of the Appeals Board and adopt its opinion as set
forth in the attached Appendix. Employee has requested that we deem this appeal
frivolous. We decline to do so.

Conclusion
‘The decision of the Workers’ Compensation Appeals Board is affirmed. Costs of

this appeal are taxed to Central Transport and Cherokee Insurance Company, for which
execution may issue

DONR ASH, SENIOR JUDGE

APPENDIX

(OPINION OF THE WORKERS’ COMPENSATION
APPEALS BOARD)

Factual and Procedur

 

ickground,

John A. Earhart, J, (“Employee”) began working for Vitran Express in 2011 as a
truck driver. That company was eventually acquired by Central Transport (“Employer”),
‘and Employee continued to work there in the same capacity. On August 15, 2016,
Employee was making a delivery in the course and scope of his employment when he
slipped and fell on his right leg. Employer provided a panel, and Employee selected Dr.
‘Thomas Byrd, who diagnosed a torn labrum. Dr. Byrd performed surgery in April of 2017
‘and took Employee completely out of work, during which time he received temporary total
disability benefits.

In March 2018, Dr, Byrd released Employee to restricted work, At that time,
Employer returned Employee to work in the office at the terminal. In June 2018, Employee
had a follow-up visit with Dr, Byrd, at which time he complained of radiating pain from
his back to his right heel. Dr. Byrd recommended Employee see a neurologist. Employer

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did not provide a panel and did not schedule a return appointment with Dr. Byrd after that
June appointment.

In July 2018, Employer removed Employee from his light duty work in the terminal
office and assigned him to work at Fifty Forward, a not-for-profit senior center. Employer
then scheduled a medical examination with Dr. Malcom Baxter. Dr. Baxter saw Employee
‘on October 25, 2018, and, at that time, opined that Employee’s back and heel pain were
“more likely than not greater than 51% due to the injury and subsequent surgery.” Dr.
Baxter also recommended a lumbar MRI, and, despite these recommendations, placed
Employee at maximum medical improvement.’ Based on this report, the workers’
compensation adjuster, Mike Gehringer, contacted Employee on December 18, 2018, and
advised him that he had been released at maximum medical improvement and to report to
Employer for work. According to our review of the technical record, there was no route
‘or assignment available to Employee at his local terminal on that date; moreover, it appears
Employer did not receive written confirmation that Employee's restrictions were lifted. As
such, Employee took three days of approved personal leave in order to allow more time for
Employer to resolve the issues regarding his return to work,

Following his leave and the Christmas holiday, Employee retuned to work on
December 26, 2018. He was unable to clock in because he had not been returned to “active
duty” within the computer system used by Employer. Employee left work, and, a few days
later, received correspondence from Employer stating he had been terminated for three
days of “no call/no show" beginning December 13, 2018. Employee testified and
timecards established that Employee worked at Fifty Forward on December 13, 14, 17, and
18, 2018,

 

Following his termination, Employee sought medical treatment on his own and filed
4 petition for benefit determination for medical treatment in July 20192 Employee

 

"The scope and purpose of the medical sppointment wih Dr Baxter was disputed bythe partes. Employer
aseried this examination was proper pursuant to Tennessee Code Annotated section 50-6-204(0X1).
[Employee asserted thatthe medical examination was an “llega atempt 10 have a physician place the
employee at maximum medical improvement, allegedly in contravention of Tennessee Code Annotated
‘section 0-6-234(6), which states thatthe determination of maximum medical improvement will be made
“bythe physician selected in accordance with §$0-6-208."

2 Employer offered no explanation regarding why Employee received no futher authorized meal
‘weatment following his termination.
requested another appointment with Dr, Byrd and a panel for treatment of his back
‘complaints, Although Employer offered a panel from which Employee selected a doctor,
fan appointment was never scheduled. Meanwhile, Dr. Byrd placed him at maximum
‘medical improvement on December 9, 2019 for his hip injury, although he did not see him
con that date, Thereafter, Employee requested a decision be made on the record regarding
his pending petition for medical benefits. On October 21, 2020, the trial court ordered
Employer to provide panels of specialists for both the hip and back and referred the case
to the Bureau's Compliance Program for consideration of penalties. That order was not
appealed.

Following the issuance of the tril court's order, Employer provided medical panels,
from which Employee selected Dr. Richard Matthews for treatment of his back. Employee
was authorized to return to Dr, Byrd for continued treatment of his hip. On January 21,
2021, Employee filed another petition for benefit determination seeking the payment of
‘temporary disability benefits from December 18, 2018, to August 3, 2019, the date on
which he obtained new employment. By that time, several depositions had been conducted
and more were scheduled in a pending federal case Employee had filed for retaliatory
discharge. These included depositions of the adjuster for the claim, Michael Gehringer;
Employer's corporate representative, Dean Kuska, as well as four other employees; and
Dr. Byrd, who was deposed twice on video. The trial court set a hearing to address
Employee's request for temporary disability benefits, but the day prior to the hearing,
Employer agreed to pay the requested benefits. The parties announced the agreement in
court the following day, and Employer also agreed to pay the requested twenty-five percent
penalty. The issue of attomeys’ fees under Tennessee Code Annotated section 50-6-
26(d)(1) was reserved for the compensation hearing. The trial court issued an order
‘memorializing the parties’ agreement, with the order specifically stating that Employee's

swryer agreed to reserve his request for attorneys’ fees for the compensation hearing. In
tof these agreements, an evidentiary hearing did not take place.”

 

  

Ultimately, Employee was released by both physicians with an anatomical
‘impairment rating to the body as @ whole of 2% for his hip from Dr. Byrd and 2% for his
back from Dr. Matthews, The partes agreed to the impairment ratings but disputed
‘whether Employee was entitled to increased benefits under Tennessee Code Annotated
section 50-6-207(3)(B), as well asthe reserved issues of attomeys’ fees, On the morning
of the compensation hearing, Employer agreed to pay the increased benefits, and thus the
only issue that remained for trial was whether Employee's attorney was entitled to fees and
costs.
At the compensation hearing, Employee testified to the sequence of events leading
1 his termination. Employee presented the deposition of Dr. Byrd for the purpose of
showing that work restrictions were still in place as of the time of his termination in
December 2018, as well as to show that those restrictions were sent to Mr. Gebringer.
Employee also filed the other depositions taken in the wrongful termination case as further
‘evidence of the timing and circumstances of the termination.” Employee's counsel sought
$50,505.50 in attorneys’ fees and costs, supported by his affidavit and timekeeping records,
‘as well as invoices for his costs, Employer offered no proof at the hearing regarding the
substance of Employee's underlying workers’ compensation claim or the benefits to which
the may be entitled. Rather, Employer argued the attorneys’ fees and costs were not
recoverable because the benefits associated with the request for attorneys" fees had been
paid voluntarily and because no hearing had been held during which the trial court had
made a finding that benefits were owed or determined any benefits had been wrongfully
denied,

 

‘The court found in favor of Employee, stating Employer “wrongfully failed to
timely pay the temporary total disability benefits to which (Employee) was entitled.” The
court further stated that Employee's attomey's “extensive efforts, including deposing
‘numerous lay witnesses and Dr. Byrd, led to [Employer's] conceding on the eve of trial
that those benefits were owed.” While the court noted that all of the depositions were
actually taken in the federal employment case and that Employer's workers’ compensation
counsel was not even present for some of the depositions, it considered Employee's
counsel's characterization that the issues in both cases were “intimately, intricately
intertwined” and determined that “it would be impossible to apportion them to one case or
the other.” Finally, the court declined to accept Employer's argument that Tennessee Code
Annotated section $0-6-226(d)(1(B) was inapplicable because the temporary disability
benefits had been paid voluntarily, stating that even though the prior order did not make a
“finding,” it “implicitly did so by explicitly holding the attomeys’ fee issue in abeyance.”
Further, stated the court, the statue allows for the trial judge to award attorneys’ fees and
costs when it determines benefits have been wrongfully denied at an expedited or
‘compensation hearing. The court awarded the full amount of fees and costs requested.
Employer has appealed.

 

 

 

 

> Employer stipulated to the use of two of Employee's co-workers’ discovery depositions atrial. Thereis
no indication inthe record of any objection tothe use of any ofthe oer discovery depositions that were
filed. All ofthe depositions had been taken i the pening retaliatory discharge casein federal cout, and,
‘of those depositions oly ove was not led in the workers” compensation cas.

6
Standard of Review

‘The standard we apply in reviewing a trial court's decision presumes that the court's
factual findings are correct unless the preponderance of the evidence is otherwise. See
‘Tenn. Code Ann, § $0-6-239(c)(7) (2022). When the trial judge has had the opportunity to
observe a witness's demeanor and to hear in-court testimony, we give considerable
deference to factual findings made by the trial court. Madden v. Holland Grp. of Tenn,
Inc., 277 S.W.3d 896, 898 (Tenn. 2009), However, “{njo similar deference need be
afforded the trial couit's findings based upon documentary evidence.” Goodman v.
‘Schwarz Paper Co., No. W2016-02594-SC-R3-WC, 2018 Tenn. LEXIS 8, at *6 (Tenn.
Workers’ Comp. Panel Jan. 18, 2018). Similarly, the interpretation and application of
statutes and regulations are questions of law that are reviewed de novo with no presumption,
of correctness afforded the trial court’s conclusions. See Mansell v. Bridgestone Firestone
NN. Am, Tire, LLC, 417 $.W.3d 393, 399 (Tenn. 2013). We are also mindful of our
obligation to construe the workers’ compensation statutes “fairly, impartially, and in
accordance with basic principles of statutory construction” and in a way that does not favor
either the employee or the employer. Tenn. Code Ann, § 50-6-116 (2022),

 

   

 

Analysis

Employer raises two issues on appeal, which we restate as follows: (1) whether the
court can award attorneys” fees and costs under section 50-6-226(d)(1)(B) if Employer
agreed to pay the requested benefits prior to the hearing of the matter; and (2) whether the
court abused its discretion in its award of attorneys’ fees.*

Attorneys’ Fees Under 50-6-226(4)(1)

Tennessee Code Annotated section 50-6-226(4)(1)(B) states that atrial court may
award reasonable attomeys’ fees and costs when an employer,

“Employer did not identify the amount ofatomeys" fees or costs awarded by the court as an issue on
appetl end acknowledged at oral argument thatthe fees and expenses were reasonable and that the ime
ta ate submited by counsel inhi afBdavit was appropriate. As such, we need not adress whether the
‘award complies with Tennessce Supreme Court Rule 8, RPC 1.5 and Tennessee Rule of Civil Procedure
‘408,

 
 

[w]rongfully denies a claim or wrongfully fails to timely initiate any of the
benefits to which the employee... is entitled ... including... temporary or
permanent disability benefits... if the workers’ compensation judge makes
4 finding that the benefits were owed at an expedited hearing or
compensation hearing,

 

‘The statute defines “wrongfully” in this context as “erroneous, incorrect, or otherwise
inconsistent with the law or facts.” Id. In interpreting this statutory provision, we have
previously said that, in order to determine whether a decision was wrongful, the court
should consider “whether an employer's decision to deny a claim was erroneous, incorrect,
‘or otherwise inconsistent with the law or facts atthe time the denial decision was made.”
Andrews v, Yates Servs., No. 2016-05-0854, 2018 TN Wrk, Comp. App. Bd, LEXIS 22, at
"12 (Tenn. Workers’ Comp. App. Bd. May 8, 2018). Under the express terms of this
provision, such a determination can be made at an expedited or compensation hearing. We
have cautioned in the past, however, against “adjudicating disputes conceming attorney's
fees and expenses in piecemeal fashion as the case winds its way through the litigation
process” and determined “the better practice is to resolve [attomeys" fees disputes} after
the litigation has run its course.” Andrews v. Yates Servs., LLC, No. 2016-05-0854, 2017
‘TN Wrk. Comp, App. Bd. LEXIS 35, at *7-8 (Tenn, Workers’ Comp. App. Bd. May 23,
2017).

 

In this case, the only issue for determination at the compensation hearing was
whether Employee's counsel was entitled to attorneys" fees due to Employer’s denial of
temporary total disability benefits from the time of Employee's termination in December
2018 to when he obtained new employment in August 2019. An expedited hearing to
address temporary disability benefits had previously been scheduled, but no proof was
heard because Employer agreed to pay the temporary total disability benefits and a twenty-
five percent penalty under Tennessee Code Annotated section 50-6-205(b)(3) on the eve
of the hearing. In announcing that agreement to the court, the parties specifically reserved
the issue of Employee's claim for attorneys’ fees and costs for a later hearing,

 

Employer argues that because it paid the benefits voluntarily, the trial court was
precluded from later making a finding thet the benefits “were owed” for purposes of
subsection 226(d){1)(B). In Employer's view, attorneys’ fees and costs cannot be awarded
under that subsection unless two elements are met: (I) the trial court made a finding that
the benefits were owed; and (2) the trial court made a finding that the failure to pay those
benefits was wrongful. As such, according to Employer, because it voluntarily paid the
benefits prior to the hearing intended to address that issu, it was improper for the tral

8

 
court to later make a finding that the benefits were owed. Hence, according to this
‘argument, the court could not award attorneys’ fees and expenses.

We conclude this argument s flawed. The workers’ compensation statutes and case
law are clear that a court’s determinations regarding the wrongful denial or failure to timely
initiate benefits can be made at either an expedited hearing of, later, at a compensation
hearing. Furthermore, the trial court’s determination of “wrongfulness” is based on an
‘examination of the facts and circumstances that existed when the denial was made. Thus,
if the preponderance of the evidence supports it, a court can determine that the benefits
“were owed” at the time they were denied. Even ifthe trial court erred in determining it
had “implicitly” made such 2 finding in its May 2021 order, we conclude the trial court
‘can make such a finding at a compensation hearing by considering whether the benefits
“were owed” as ofthe date ofthe denial. We can find no authority that prohibits the court
from making a finding that an employer wrongfully denied or timely failed to initiate
benefits even after an employer has agreed to pay the benefits voluntarily. In short, we
conclude that Employer's agreement to pay the benefits and the penalty did not insulate it
from a later determination by the trial court that attorneys" fees and costs are appropriate
due to.& wrongful denial or failure to timely initiate benefits.

 

 

Further, Employer expressly agreed to defer the issue as to whether Employee's
attorney was entitled to fees and expenses until a compensation hearing, and any argument
thatthe issue was not properly before the court was waived at that time. The agreement is
clearly outlined in the court's May 2021 order, Upon receipt of the order, Employer did
not lodge any objection with the court indicating the statements were incorrect or improper.
‘To assess whether Employee's attorney should receive reasonable fees and expenses under
Tennessee Code Annotated section 50-6-226(b)(1), which was specifically reserved as an
issue in the May 2021 order, the court must first assess whether the benefits “were owed”
at the time of the denial and whether there was a wrongful denial or a failure to timely
initiate benefits, and that is what the trial court did. As such, we affirm the determination
of the trial court thatthe requested benefits were wrongfully withheld,

 

Reasonable Attorneys’ Fees and Costs

Having concluded that section $0-6-226(4)(1)(B) is applicable in these
circumstances, we tur to whether the trial court erred in awarding attorneys’ fees and costs
in this case. An award for attomeys’ fees pursuant to Tennessee Code Annotated section
0-6-226(4)(1) is discretionary and is subject to review under an abuse of discretion
standard. Andrews, 2018 TN Wek. Comp. App. Bd. LEXIS 22, at *11-12. A trial court

9
‘abuses its discretion when it causes an injustice by applying an incorrect legal standard,
reaches an illogical result, resolves the case on a clearly erroneous assessment of the
evidence, or relies on reasoning that causes an injustice. Gonsewski v. Gonsewski, 350
S.W.3d 99, 105 (Tenn, 2011). Here, Employer does not contend that the amount awarded
‘was erroneous of excessive, but that the award itself is “illogical” under the “plain language
of the statute.” Employer argues the trial court's award of attorneys’ fees and costs was in
the nature of sanction of penalty and not under the factors in section 50-6-226(4X1).

 

‘The court's determination that Employer wrongfully filed to timely initiate benefits
‘was based on its review of the proof before it, as well as the live testimony of Employee.
‘There was no evidence in the record to support that Employee had violated a workplace
tule, and the documentary evidence supported that Employee reported to work at all
scheduled times. In fact, Employer submitted no evidence at the compensation hearing
‘whatsoever, The trial court then considered Employee's attorney's “extensive” efforts t0
‘obtain the necessary proof for the benefits to be provided. As the trial court outlined, the
attomey took numerous depositions of lay witnesses and the treating physician in order to
prove Employee was entitled to the requested benefits. Employer offered nothing to
contradict this proof. For the reasons outlined above, we conclude the trial coun’s
‘assessment of the denial of the benefits was proper under Tennessee Code Annotated 50-
6-226(€\(1{B), and we find no abuse of discretion in its decision to award reasonable
attorneys’ fees and costs.

Conclusion

For the foregoing reasons, we affirm the trial court's order in all respects and certify
itas final, Costs on appeal are taxed to Employer.

10