Diamond Post

 Workers' Compensation Newsletter

Utica Mohawk No More!
 
In a 3-2 decision that is sure to change the landscape of Workers' Compensation law, the South Carolina Supreme Court ruled in Allie James v. Anne's Inc. that the South Carolina Workers Compensation Commission ("Commission") lacked the authority to prorate a claimant's lump sum award over his life expectancy without the consent of both parties. Op. No. 26762 (S.C.Sup.Ct. filed Jan. 25, 2010) (Shearouse Adv.Sh. No. 4 at 17).

In James v. Anne's Inc., the claimant was injured when she fell while working for the employer.  Commissioner Barden found that she was permanently and totally disabled and was entitled to 500 weeks of compensation.  The claimant asked the commissioner to include language in the order prorating her lump sum award over her life expectancy pursuant to Utica Mohawk Mills v. Orr.  She wanted this proration in order to maximize her Social Security benefits, which would have been reduced if she had been awarded a lump sum payment without this fictional proration. 

The employer and its insurance carrier objected, arguing that the Commission did not have the authority to include proration language in a lump sum award without consent of the employer.  The single commissioner held that the Commission lacked the authority to prorate the award over the claimant's lifetime if the employer objected to the inclusion of such language.  

On appeal, the Full Commission affirmed.  The Circuit Court also affirmed, holding that there was no common law or statutory basis for a commissioner having the jurisdiction to prorate a lump sum award over a claimant's lifetime.  Both the Court of Appeals and the Supreme Court affirmed the lower court's ruling.

This decision is certain to have an immediate impact on workers' compensation claims, specifically settlement negotiations.  Prior to this decision, commissioners typically ordered proration language with lump sum payment.  Now commissioners cannot order the inclusion of Utica Mohawk language without the consent of both parties.  James v. Anne's Inc. provides employers and insurance carriers with a powerful bargaining tool because claimants now have an incentive to settle in order to maximize their social security benefits with proration language.  

In the News . . .

Did you know that a nurse case manager's files may be subpoenaed by the claimant's attorney for use at a hearing?  These files may include emails and correspondence between nurse case managers and adjusters, employers, and defense attorneys.  Unfortunately, these emails and correspondence typically are not protected from production because nurse case managers, by their nature, are not part of the defense team.  Be sure to choose your words carefully when writing a nurse case manager because these words may show up in court!

The Legislative Audit Council ("LAC") recently contacted the South Carolina Workers' Compensation Commission about starting an audit in the near future.  During the course of the audit, the LAC will interview all seven commissioners and will review the consistency of commissioners' awards and the reasonableness of attorney's fees that have been awarded.  Once the LAC completes its audit, it will present its report to the General Assembly.

The maximum compensation rate for accidents occurring on or after January 1, 2010, is $689.71.  This is an increase of $8.35, or 1%, from the maximum compensation rate for 2009.  According to Section 42-9-10 of the South Carolina Workers' Compensation Act, "an employee may not be paid more each week than the average weekly wage in this State for the preceding fiscal year."   

Governor Mark Sanford has reappointed Commissioner Susan S. Barden to the SCWCC.  If confirmed by the Senate, her new term will start June 30, 2010, and end June 30, 2016.  Commissioner Barden was appointed July 1, 2004.  In addition, the governor has nominated E. Lewis Creel, Jr., of Summerville, SC, to replace Commissioner G. Bryan Lyndon, whose term expires June 30, 2010.  Commissioner Lyndon also was appointed July 1, 2004.  Mr. Creel is the Human Resources Manager for ALCOA-Mt. Holly, and was the South Carolina Chamber of Commerce's 2004 Human Resources Professional of the Year.  If confirmed, his term would commence June 30, 2010, and run for six years.