Workers’ comp limits under review at Arizona Legislature
Society of St. Vincent de Paul employee Shawntelle Allen was helping co-workers move some donations in January 2001.
Allen, who typically worked as the organization’s volunteer coordinator, drove a delivery truck to a Phoenix warehouse to pick up household goods to haul to a thrift store in Mesa.
At the warehouse, she stepped into the back of the truck to adjust tie-down straps as a co-worker tried to muscle a 650-pound refrigerator on a dolly from the loading dock into the truck.
Allen heard the dolly bang onto the back of the truck. Something sounded wrong, she said.
She turned in time to see the 7-foot-tall refrigerator toppling. She tried to dash onto the dock, but the refrigerator caught her right shin, shattering both her tibia in front and fibula in back.
“I could hear it snap when it fell. I was like breaking branches,” Allen said.
Several people lifted the refrigerator, and Allen, still conscious, saw a bone poking through her jeans. She squirmed from under it.
“I was trying drag my leg away with my pant leg. My foot was going in, like, 360. It was gross,” she said. “It was, like, flopping. I had no control of it whatsoever.”
Cases like hers, which she took to court, could be affected by proposed legislation being considered by Arizona lawmakers that seeks to standardize how cases are adjudicated.
St. Vincent de Paul’s insurance company, SCF National Insurance, initially paid for Allen’s medical assistance, but halted payments after nine months, according to a suit filed in Maricopa County Superior Court last year. The payments restarted a year later.
One of the broken bones never healed correctly, and complications set in. Nine surgeries and several scars later, Allen was left unable to drive or work because of side-effects caused by pain medication, she said.
In her suit, she alleges that SCF and its adjuster failed to conduct a reasonable investigation of the accident, failed to acknowledge the extent of her injury and failed adhere to the industry’s best practices, among other factors.
She seeking compensation for pain and suffering, emotional distress and punitive damages. The case is in appeal.
The proposed Arizona legislation would keep cases like hers out of Superior Court. According to House Bill 2439, workers’ compensation cases would be handled exclusively by the Industrial Commission of Arizona, which already monitors the activities of insurance carriers and handles disputes between claimants, employees and carriers.
The bill also would set penalties paid in workers’ compensation cases that involve bad faith in handling claims that result in the denial or delay of medical treatment.
The bill is priority legislation for the Arizona Chamber of Commerce and Industry, said spokesman Garrick Taylor.
“It reasserts the Industrial Commission as the proper forum to deal with bad faith claims,” he said. “There’s been an unfortunate trend of these bad-faith claims in workers’ comp cases going into Superior Court. Traditionally in Arizona, these cases have been handled by the Industrial Commission at an administrative level.”
The bill would set penalties at $5,000 for bad-faith claims that result in periods of disability up to 14 days, and $10,000 or 100 percent of disability benefits owed for similar claims that result in disability longer than 14 days.
It also would set penalties at $5,000 for bad-faith handling of claims that result in denial or delay of medical treatment, plus an additional $10,000 if the delay resulted in a permanent disability.
Insurance companies and their claims adjusters would be subject to additional civil penalties of $5,000 if the Industrial Commission finds that the entity has a pattern of violations.
The legislation awaits votes by the full Senate and House.
The measure would affect about 10 to 15 bad-faith workers’ comp cases a year, said Phoenix attorney Kevin Wein, who specializes in such cases and is handling Allen’s suit. Those cases represent just a fraction of the roughly 100,000 workers’ comp cases filed each year in Arizona.
Jeff Gray, a lobbyist for the chamber, noted that the number of bad-faith cases in Superior Court has been increasing.
“Prior to 2012, it was single digits, maybe three to four a year, so we’ve now seen a growing number of these being filed in Superior Court,” he said.
The cases are complicated and are best handled by Industrial Commission administrative law judges, Gray argued. In addition, the Industrial Commission typically handles the cases in months, while Superior Court usually takes years, he said.
In contrast, Wein argued Superior Court is the proper venue for bad-faith workers’ comp cases. It’s important for injured workers to go in front of juries that have leeway to award amounts in excess of those proposed in the legislation, he said.
For example, limits in the proposed law fail to compensate injured workers for missed wages caused by bad-faith delays in providing medical treatment, he said.
Gray countered that workers can ask for compensatory damages — which could included missed wages, medical bills and out-of-pocket expenses — under the proposed legislation. The measure bans punitive damages, though.
While the Legislature considers the matter, Allen will keep an eye out for refrigerators.
“Still to this day, I’m in fear of refrigerators. It’s an odd thing,” she said.