1 

TENNESSEE BUREAU OF WORKERS’ COMPENSATION 

WORKERS’ COMPENSATION APPEALS BOARD 

Cathy Cravens ) Docket No. 2018-04-0295 

) 

v. ) State File No. 39315-2018 

) 

Cummins Filtration, Inc., et al. ) 

) 

) 

Appeal from the Court of Workers’ ) 

Compensation Claims ) 

Robert V. Durham, Judge ) 

Reversed, Modified, and Certified as Final 

This appeal concerns a trial court’s decision to exclude a portion of the parties’ global 

settlement from the calculation of the employee’s attorney’s fee. The employee has 

appealed. Upon careful review of the statutes at issue and relevant precedent, we reverse 

the trial court’s order, modify the order and the settlement agreement to reflect the original 

terms prior to the trial court’s modification, and certify the modified order approving the 

settlement agreement as final. 

Presiding Judge Timothy W. Conner delivered the opinion of the Appeals Board in which 

Judge Pele I. Godkin joined. 

Peter Frech, Nashville, Tennessee, for the employee-appellant, Cathy Cravens

Fredrick R. Baker, Cookeville, Tennessee, for the employer-appellee, Cummins Filtration, 

Inc. 

Patrick A. Ruth, Nashville, Tennessee, for appellee Abbie Hudgens, Administrator of the 

Tennessee Bureau of Workers’ Compensation and the Tennessee Subsequent Injury and 

Vocational Recovery Fund 

Factual and Procedural Background 

On May 24, 2018, Cathy Cravens (“Employee”) was working for Cummins 

Filtration, Inc. (“Employer”), when she sustained severe injuries to her right arm and 

shoulder as a result of getting her arm caught in a machine. Employer accepted her claim 

as compensable and benefits were initiated. Following extensive medical care, Employee 
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was evaluated by a vocational expert, who concluded Employee had “little to no reasonable 

job opportunities to her that exist in significant numbers on a full-time basis within the 

competitive labor market.” Thereafter, the parties agreed to add the Tennessee Subsequent 

Injury and Vocational Recovery Fund as a defendant in the case. On March 22, 2022, the 

parties entered into a tentative settlement of all issues in the case. Under the terms of the 

proposed settlement, Employer and Employee agreed that Employee was not permanently 

and totally disabled. Each defendant agreed to pay a lump sum amount, and a portion of 

the lump sum amount paid by Employer was to be used to fully fund a Medicare Set-Aside 

Arrangement (“MSA”).

1 As a result, the Settlement Agreement, if approved, would 

terminate Employer’s obligation to provide any additional benefits, including future 

medical benefits. In addition, Employee’s attorney sought approval of his fee of 20% of 

the amount of the global settlement, to be paid by Employee from settlement proceeds.

When the settlement was presented to the trial court for approval, the court approved 

all terms of the settlement except for the amount of Employee’s attorney’s fee. The trial 

court concluded that Employee’s attorney was not entitled to a fee from the portion of the 

settlement designated to fund the MSA. As a result, the trial court struck through the 

amount of Employee’s attorney’s fee, the net amount to be paid to Employee, and the 

monthly amortized benefit for Social Security set-off purposes in the Settlement 

Agreement, and it wrote different figures in the margin. The Court then issued a separate 

order approving the settlement agreement in which it cited a May 2004 Memorandum from 

the Centers for Medicare and Medicaid Services (“CMS”) that it concluded supported its 

determination that Employee’s attorney was not entitled to a fee from the amount used to 

fund the MSA. Employee has appealed.

Standard of Review

The interpretation and application of statutes and regulations are questions of law 

that we review de novo. See Mansell v. Bridgestone Firestone N. Am. Tire, LLC, 417 

S.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 (2021).

Analysis

The sole issue presented in this appeal is whether Employee’s attorney is entitled to 

include the value of the MSA when seeking a fee of 20% of the award to the injured worker. 

1 “A Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) is a financial agreement that 

allocates a portion of a workers’ compensation settlement to pay for future medical services related to the 

workers’ compensation injury, illness or disease.” Workers’ Compensation Medicare Set Aside 

Arrangements, https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/WorkersCompensation-Medicare-Set-Aside-Arrangements/WCMSA-Overview, last visited June 22, 2022.
3

As an initial matter, we note that both Employer and the Subsequent Injury and Vocational 

Recovery Fund filed briefs stating that, because the resolution of the issue on appeal has 

no impact on the liabilities of their respective clients, “they do not take a position on this 

appeal.”

Tennessee Code Annotated section 50-6-226(a)(1) governs attorneys’ fees in 

workers’ compensation cases. It provides:

The fees of attorneys for services to employees under this chapter[] shall be 

subject to the approval of the workers’ compensation judge before which the 

matter is pending, as appropriate; provided, that no attorney’s fees to be 

charged employees shall be in excess of twenty percent (20%) of the amount 

of the recovery or award to be paid by the party employing that attorney. 

The department shall deem the attorney’s fee to be reasonable if the fee does 

not exceed twenty percent (20%) of the award to the injured worker . . . .

Tenn. Code Ann. § 50-6-226(a)(1) (2018) (emphasis added). In Henderson v. Pee Dee 

Country Enters., No. 2020-06-1013, 2021 TN Wrk. Comp. App. Bd. LEXIS 8 (Tenn. 

Workers’ Comp. App. Bd. Mar. 8, 2021), we addressed the meaning of the phrase “award 

to the injured worker” in the context of a claim for death benefits, and we concluded the 

phrase encompasses an award of death benefits even if the scope and duration of such 

benefits are contingent on future events. Id. at *8-9.2

 Here, the amount of the settlement 

designated to fund the MSA is not contingent on any future event. Thus, we must now

determine whether the phrase “award to the injured worker” includes amounts attributable 

to future medical benefits and, specifically, the amount used to fund an MSA.

In Langford v. Liberty Mutual Ins. Co., 854 S.W.2d 100 (Tenn. 1993), the Tennessee 

Supreme Court addressed, as a question of first impression, whether contested medical 

expenses are “part of the ‘recovery or award’ under Tenn. Code Ann. § 50-6-226(a) (1991) 

and, therefore, subject to attorneys’ fees.” The court answered that question in the 

affirmative:

We conclude that our workers’ compensation laws should be construed so as 

to encourage adequate representation by counsel in contested claims. We 

think that representation would be less likely if medical expenses were not 

subject to attorneys’ fees in a contested case, particularly where the medical 

expenses constitute all, or a significant part, of the recovery. As the trial 

court observed in this case:

2 The Tennessee Supreme Court’s Special Workers’ Compensation Appeals Panel recently affirmed the 

two opinions we issued in Henderson. See Henderson v. Pee Dee Country Enters., No. M2021-00970-SCR3-WC, 2022 Tenn. LEXIS 215 (Tenn. Workers’ Comp. Panel June 20, 2022).
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There are cases where the employee could not recover anything 

without the lawyer. There are cases where medical expenses 

may be up in the tens of thousands of dollars, yet the employee 

compensation may amount to only a few weeks. The 

possibility of a lawyer taking those cases would be rather 

small. 

We, therefore, conclude that contested medical expenses are a part of the 

“recovery or award” specified in Tenn. Code Ann. § 50-6-226(a) on which 

attorneys’ fees may be assessed.

Id. at 102. As a result of this conclusion, the Court ordered that an amount equal to twenty 

percent (20%) of the contested medical expenses, which the trial court had already 

determined was reasonable, would be awarded as part of the attorney’s fee. Id. 

In Harris v. Nashville Center for Rehabilitation and Healing, No. 2019-06-1008, 

2021 TN Wrk. Comp. App. Bd. LEXIS 9 (Tenn. Workers’ Comp. App. Bd. Jan. 28, 2021), 

the employee’s attorney sought to include contested medical expenses in the calculation of 

the attorney’s fee, and we explained:

The Tennessee Supreme Court has held that contested medical expenses are 

considered part of the “recovery or award” upon which attorney’s fees may 

be based. We have previously noted that the 2013 Workers’ Compensation 

Reform Act modified section 50-6-226(a), which governs awards of 

attorney’s fees, but the changes did not vitiate or impair the precedent 

established in Langford. Thus, while the trial court is given discretion as to 

the award of attorney’s fees, Employee’s contested medical expenses are to 

be considered part of Employee’s award for purposes of attorney’s 

fees. . . . [A]n award of attorney’s fees based on a percentage of unpaid 

medical expenses would be deducted from Employee’s award.

Id. at *17 (internal citations omitted).

Here, the parties negotiated a global settlement of the claim, including the closure 

of future medical benefits and the funding of an MSA. It is unrefuted that Employee’s 

counsel spent significant time and used his expertise in representing Employee and 

negotiating a settlement on her behalf, including the MSA. It is further unrefuted that 

Employee entered into a contract with her attorney in which she agreed to pay twenty 

percent of the total recovery, whether said recovery was obtained by settlement or trial, to 

her attorney as his fee, subject to the court’s approval. No other party contested the 

reasonableness of the fee, and the trial court did not conclude that the fee was unreasonable.
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In declining to approve the attorney’s fee, the trial court reasoned that the amount 

of the settlement designated to fund the MSA was not “available” to Employee and, 

therefore, is not properly includable in the fee calculation. We respectfully disagree. The 

amount of the settlement used to fund the MSA does, in fact, inure to Employee’s benefit 

because it relieves Employee of direct financial obligations attributable to certain future 

medical expenses. Moreover, Tennessee precedent does not distinguish between portions 

of a settlement “available” to the plaintiff versus portions that are “unavailable” in 

considering the amount of an attorney’s fee. For example, the Supreme Court in Langford

did not conclude that the amount of the award attributable to the payment of contested 

medical bills was “unavailable” to the employee and excludable from the attorney’s fee 

calculation; in fact, it reached the opposite conclusion. The same rationale applies here.

Moreover, in our opinion in the second appeal in Henderson, we concluded that the 

second sentence of Tennessee Code Annotated section 50-6-226(a)(1) limits the discretion 

of the trial court to refuse to approve attorney’s fees “in circumstances where the fee does 

not exceed 20% of the award to the injured worker.” Henderson v. Pee Dee Country 

Enters., No. 2020-06-1013, 2021 TN Wrk. Comp. App. Bd. LEXIS 26, at *13 (Tenn. 

Workers’ Comp. App. Bd. July 23, 2021). Here, we conclude that the total amount of the 

settlement, including the amount designated to fund the MSA, is includable in the term 

“award to the injured worker” as used in section 226(a)(1). Thus, it was error for the trial 

court to exclude that amount in calculating and approving the attorney’s fee.

Finally, we agree with Employee that the May 2004 Memorandum issued by CMS 

does not dictate the result reached by the trial court. The CMS Memorandum, even if 

instructive or persuasive authority in this case, merely states that funds used to pay 

administrative fees or expenses associated with the MSA, including attorney’s fees, cannot 

come from the corpus of the monies used to fund the MSA.3

Conclusion

For the foregoing reasons, we reverse the trial court’s order with respect to the 

amount of the approved attorney’s fee; modify the settlement agreement to reinstate the 

original amounts of the attorney’s fee, the net recovery to the injured worker, and the 

amortized monthly benefit for Social Security set-off purposes; and certify as final the 

order and agreement as modified. Costs on appeal are taxed to Employee.

3 Parenthetically, we note that Employee’s attorney acknowledged that monies used to satisfy the attorney’s 

fee “would not infringe upon the corpus of the MSA as approved by CMS.” We recognize that there may 

be factual circumstances where an award of attorney’s fees on the amount designated for an MSA may 

significantly lessen or even deplete the net recovery of the injured worker. However, as we noted in 

Henderson II, “wholly separate and apart from the provisions of Tennessee’s Workers’ Compensation Law 

governing attorney’s fees, attorneys representing injured workers or their dependents must abide by Rule 8 

of the Rules of the Tennessee Supreme Court, RPC 1.5, and any other rules, statutes, or regulations that 

govern fees in contingency fee cases.” Henderson, 2021 TN Wrk. Comp. App. Bd. LEXIS 26, at *13 n.5.
 

 

 

 TENNESSEE BUREAU OF WORKERS’ COMPENSATION 

 WORKERS’ COMPENSATION APPEALS BOARD 

Cathy Cravens ) Docket No. 2018-04-0295 

) 

v. ) State File No. 39315-2018 

)

Cummins Filtration, Inc., et al. ) 

) 

) 

Appeal from the Court of Workers’ ) 

Compensation Claims ) 

Robert V. Durham, Judge ) 

CERTIFICATE OF SERVICE

 

I hereby certify that a true and correct copy of the Appeals Board’s decision in the referenced 

case was sent to the following recipients by the following methods of service on this the 23rd

day of June, 2022. 

Name Certified 

Mail

First Class 

Mail

Via 

Fax

Via 

Email

Sent to: 

Peter Frech X pfrech@forthepeople.com

Fred Baker X fbaker@wimberlylawson.com

Patrick Ruth X patrick.ruth@tn.gov

Robert V. Durham, Judge X Via Electronic Mail

Kenneth M. Switzer, Chief Judge X Via Electronic Mail

Penny Shrum, Clerk, Court of 

Workers’ Compensation Claims

X penny.patterson-shrum@tn.gov

 

Olivia Yearwood

Clerk, Workers’ Compensation Appeals Board

220 French Landing Dr., Ste. 1-B 

Nashville, TN 37243 

Telephone: 615-253-1606 

Electronic Mail: WCAppeals.Clerk@tn.gov