Court of Appeals Affirms Compensation Court’s Award of Penalties, Finding that there was No Medical Basis to Deny

by | Oct 1, 2015

On September 29, 2015 the Nebraska Court of Appeals issued its decisions in Peterson v. Leprino Foods. At issue on appeal was whether a reasonable controversy existed concerning the nature of the employee’s April 2013 injury. The Court of Appeals agreed with the decision of the compensation court that there was no dispute in the medical evidence concerning the causation of the employee’s April 2013 injury and affirmed an award of penalties originally assessed by the worker’s compensation court.

The Employee first suffered a low back injury in June 2010, which the Nebraska Workers’ Compensation Court found to be compensable. The employee then experienced low back pain again in September 2012, which the compensation court found to be compensable as a cumulative trauma injury with an accident date of September 12, 2012. The compensation court awarded no temporary or permanent indemnity benefits as a result of those two injuries, as the employee suffered no permanent impairment from the first accident and did not reach maximum medical improvement from the second accident before suffering a third accident.

The compensation court then found that the employee suffered an aggravation injury on April 19, 2013 while carry boxes up a flight of stairs at work. The compensation court awarded ongoing temporary total disability as the employee had not returned to work since that date and had not yet reached maximum medical improvement. The compensation court found the April 2013 injury compensable by relying on the employer’s medical expert, Dr. Michael O’Neil’s opinion that the employee sustained an “exacerbation or temporary worsening of a preexisting and symptomatic condition.” Based on the foregoing, the compensation court found that there was no reasonable controversy concerning the April 2013 injury as there was an actual worsening as opined by the employer’s expert and awarded the employee a 50% waiting time penalty, interest and attorney’s fees based on the employer’s denial of the 2013 claim. This determination  was made by the court despite the fact that based on his diagnosis of an exacerbation or temporary worsening, Dr. O’Neil went on to state that the employee was not entitled to any disability as a result of the April 2013 incident.

On appeal, the employer only challenged the finding that there was no reasonable controversy concerning the nature of the April 19 injury. Neb. Rev. Stat. § 48-125 provides that an employer pay a 50% waiting-time penalty if there is no reasonable controversy regarding the employee’s claim for benefits. To avoid the penalty provided for in § 48-125, the Court of Appeals reasoned that an employer need not prevail in the employee’s claim–it simply must have an actual basis in law or fact for disputing the claim and refusing compensation. Stacy v. Great Lakes Agri Marketing, Inc., 276 Neb. 236, 753 N.W.2d 785 (2008).  When there is a conflict in the medical testimony adduced at trial, reasonable but opposite conclusions could be reached by the compensation court, and a penalty can be avoided. See Armstrong v. State, 290 Neb. 205, 859 N.W.2d 541 (2015).

The employer’s argument on appeal addressed the compensation court’s characterization of the substance of Dr. O’Neil’s opinion.  The employer conceded that if O’Neil had only stated that the employee suffered an exacerbation, there would not be a reasonable controversy, but since O’Neil also used the words “temporary” and “flare-up,” his opinion became far less clear. The Court of Appeals found that the compensation court did not clearly err in finding that there was no reasonable controversy with regard to causation of the April 2013 injury. Specifically the Court of Appeals found that “temporary worsening of the preexisting condition” language did not create a reasonable controversy regarding causation of the April 2013 injury because even if the injury was only a temporary worsening, it was still compensable as the injury itself was caused by the employee’s employment.

It appears that in this case, there was some confusion related to whether the employer’s examiner was still opining at the time of trial as to whether the latest alleged injury was an actual exacerbation caused by a work accident.  One lesson for employers/insurers from the Court of Appeals’ decision in Leprino is that the workers compensation court will closely scrutinize the language of medical opinions and likely will not make inferences as to what the examining physician actually intended.  Given Nebraska court’s past discussions regarding the “beneficent purposes” of the workers compensation act, employers/insurers should make sure that any medical reports forming the basis of a denial adhere with the necessary evidentiary standards as previously discussed by the courts and are sufficiently clear.  When in doubt, request clarification from your expert or doctor as to what she/he really meant when discussing “temporary” events and/or the length of the same.  For questions regarding what constitutes a reasonable controversy or other issues related to medical bases of denial, please contact Nebraska Workers’ Compensation attorneys Thomas Shires at or Paul Barta at or 402.475.1075.