STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


LINDA HICKS, Applicant

STOUGHTON TRAILERS INC, Employer

LIBERTY MUTUAL INS CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 90043598


Liberty Mutual Insurance Company submitted a petition for commission review alleging error in the administrative law judge's Findings and Interlocutory Order issued in this matter on June 10, 1996. Briefs were submitted by the parties. At issue are penalties for bad faith and inexcusable delay claimed against Liberty Mutual. The claims arose out of a conceded work injury which occurred on April 17, 1990.

The commission has carefully reviewed the entire record in this matter and hereby affirms in part and reverses in part the administrative law judge's Findings and Interlocutory Order. The commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant sustained a conceded work injury in the form of chronic myofascial pain syndrome, with a date of injury on April 17, 1990. At the request of Stoughton Trailers and Liberty Mutual, the applicant was examined by Dr. Kenneth Robbins on October 1, 1994. In a report dated October 17, 1994, Dr. Robbins concurred with Dr. Thomas Berentsen's previous diagnosis of chronic myofascial pain syndrome. In addition, he concurred with the diagnosis of the applicant's psychiatrist, to the effect that the chronic pain syndrome had been a significant contributing factor to the onset of depression. Dr. Robbins opined that the severity of this depression had rendered the applicant disabled as of approximately 18 months prior to his examination of her.

The applicant's attorney forwarded a copy of Dr. Robbins' report to Liberty Mutual on October 18, 1994, together with a letter requesting Liberty Mutual to provide temporary total disability payments as well as payment of medical expenses. At this point in time, Liberty Mutual lacked any reasonable basis for delay in payment of temporary total disability or medical expense. Testimony by Liberty Mutual's senior case manager makes it abundantly clear that the insurer also had knowledge of its lack of any reasonable basis for delaying payment. The case manager acknowledged that he authorized immediate payment, but for reasons he was simply unable to explain, payments were not timely made.

Temporary total disability was due from April 1, 1993 to February 1, 1994, in the amount of $10,015.01, but was not paid until March 22, 1995. Additional temporary total disability was due from March 3, 1994 to January 31, 1995, in the amount of $12,258.17, but was not paid until February 6, 1995. The applicant accumulated $6,425.72 in medical expenses for services rendered through January 1995. Liberty Mutual had not paid these expenses as of March 23, 1995. The delay in payments of $22,273.18 in temporary total disability and $6,425.72 in medical expenses was lengthy and without excuse. It caused the applicant severe financial hardship, restricted her access to needed medical care, and is deserving of the maximum penalty amounts. Under section 102. 22 (1), Stats., a 10 percent penalty for inexcusable delay is assessed in the total amount of $2,869.89. Under section 102.18 (1)(bp), Stats., the maximum penalty of $15,000 is assessed.

Separate acts of bad faith and inexcusable delay are found with regard to the delay in payment of medical expenses between March 23, 1995 and April 17, 1995. The reason for such finding is that a hearing was held before an administrative law judge on March 23, 1995, at which Liberty Mutual stipulated to immediate payment of all claimed temporary total disability and medical expense. The last payment of temporary total disability had been made on March 22, 1995, prior to this hearing. However, even after the administrative law judge issued a written order on March 30, 1995, requiring Liberty Mutual to make payment within 10 days, payment of the medical expense was not made until April 17, 1995. In an ordinary case the delay between the concession made on March 23, 1995, and actual payment made on April 17, 1995, might be considered less serious. However, with the history of bad faith and inexcusable delay in this case, the additional delay was a serious matter with serious consequence to the applicant. The delay in payment of medical expense between March 23, 1995 and April 17, 1995, was without a reasonable basis, and Liberty Mutual had knowledge of this lack of a reasonable basis. Accordingly, a 100 percent bad faith penalty is assessed in the amount of $6,425.72. The full 200 percent penalty is not assessed because the delay between March 23, 1995 and April 17, 1995, while a serious matter, was not of particularly long duration. The delay was without justification and therefore the 10 percent penalty for inexcusable delay is also assessed in the amount of $642.57.

The total penalties for bad faith amount to $21,425.72, and the total penalties for inexcusable delay amount to $3,512.46. Therefore, the total due is $24,938.18. The applicant's attorney is entitled to a 20 percent fee, in the amount of $4,987.64, as well as $287.35 in costs.

The medical opinions indicate that additional medical treatment will be required, which may include additional periods of disability. Jurisdiction will be reserved with respect to all issues.

Now, therefore, this

INTERLOCUTORY ORDER

Within 30 days from this date, Liberty Mutual Insurance Company shall pay to the applicant the sum of Nineteen thousand nine hundred fifty dollars and fifty-four cents ($19,950.54); and to applicant's attorney, James A. Meier, fees in the amount of Four thousand nine hundred eighty-seven dollars and sixty-four cents ($4,987.64), and costs in the amount of Two hundred eighty- seven dollars and thirty-five cents ($287.35).

Jurisdiction is reserved for such further findings and orders as may be warranted.

Dated and mailed November 18, 1996
ND 7.1

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

David B. Falstad, Commissioner

MEMORANDUM OPINION

The commission reversed the administrative law judge's findings which treated the two temporary total disability payments and medical expense payment as three separate claims for bad faith and inexcusable delay. This partial reversal was based on the commission's interpretation of the statutes rather than any matter of credibility. All the delays in payment up to March 23, 1995, arose from the same injury and were part of the same course of action. While the payments were ultimately made at different times, there was no event prior to March 23, 1995, which provided a separate statutory cause of action under section 102.18 (1)(bp) or 102.22 (1), Stats. On March 23, 1995, a hearing was held before Administrative Law Judge Joseph Schaeve. At that hearing, Liberty Mutual stipulated to immediate payment of all claimed disability and medical expense, with the latter being the only expense outstanding. The delay after this stipulation, and continuing after ALJ Schaeve issued a written order, constituted new and separate offenses under the statutes.

cc: ATTORNEY JAMES A MEIER
MEIER WICKHEM SOUTHWORTH & LYONS S C

ATTORNEY JAMES A REARDON
KASDORF LEWIS & SWIETLIK S C


Appealed to Circuit Court. Reversed September 15, 1997.

[ Search WC Decisions ] - [ WC Legal Resources ] - [ LIRC Home Page ]