Ever since the 2013 Second Injury Fund (“Fund”) amendments were passed, employers and insurers (“employers”) have anguished over the future of their potential permanent total disability (“PTD”) exposure in cases where the Fund cannot be hit with a PTD award due to the newest limitations on the Fund’s liability. A series of appellate decisions have been issued, including the Supreme Court’s holding in Treasurer v. Parker, addressing how the new limitations in Sec. 287.220.3 are to be applied. However, no case has directly addressed what happens where the employee is PTD but the Fund can’t be held liable where, for example, there is no pre-existing qualifying disability.
Klecka, decided on 06/22/2021, first addressed the question of what happens when the claimant is PTD and there are multiple pre-existing disabilities, but only one equals the required 50 weeks in PPD value. In Klecka, the primary case was settled for 35% of the left arm, and 21.5 of the body for depression. Klecka had a pre-existing disability in the left arm worth 81.2 weeks and other disabilities involving his head, left knee, right thumb, a hernia, and non-injury related impediments. The medical experts attributed his PTD to a combination of the disability from the primary injury and all of his pre-existing disabilities. The Administrative Law Judge took all prior disabilities into account in awarding PTD. The Commission then reversed the PTD award since the Commission held that only the previous disability worth 81.2 weeks could be considered in finding PTD against the Fund. The claimant then appealed to the Court of Appeals.
The Court of Appeals reversed the Commission’s denial, holding that where at least one qualifying disability is present, then all non-qualifying disabilities must also be considered. The Court observed that all factors should be taken into account in determining if the claimant is a PTD, stating that this is a “real world inquiry” in determining whether “a reasonable employer in the usual course of business would reasonably be expected to employ the employee in his or her present physical condition”.
The Court’s decision not to further limit the Fund’s exposure by affirming the Commission’s decision comes as good news to employers. Otherwise, since no expert had stated that the primary injury and the one qualifying injury alone rendered the claimant PTD, the employer would have paid the price.
But there is the bad news in Klecka also. In addressing the 287.220.3 issue, the Court analyzed the history of the Fund and the definition of total disability in 287.020.6. The Court pointed out that the Fund was created to encourage the hiring of workers with pre-existing disabilities by protecting the employer from PTD liability should the worker then be injured, and as a result was rendered unemployable. However, as the legislature limits the Fund’s liability for PTD, employers’ exposure increases. That consequence was confirmed when the Court stated that if the Fund is not liable and the employee is PTD, then the employer at the time of the last injury must be held liable for the PTD benefits. In other words, there is no scenario wherein neither the employer, nor the Fund, can be found liable for the PTD.
The Takeaway: The Court’s conclusion on the inevitability of a PTD award against one or the other defendant comes as no surprise. However, this official pronouncement from the Court of Appeals makes it less likely that the claimant will settle the primary case and then go to trial against the Fund only. After all, if the claimant is PTD, it seems they can’t lose. Therefore, it has become increasingly more crucial, in a likely PTD case, to assist the claimant, through the defense experts, in proving that the pre-existing disabilities implicate the Fund as liable for PTD. Award. Be aware though that this decision may be appealed to the Missouri Supreme Court.
Copyright: Evans & Dixon. L.L.C. 2021