TRIAL COURT AWARDS PERMANENT TOTAL DISABILITY BASED ON LOSS OF EARNING CAPACITY FOR TWO SCHEDULED MEMBER INJURIES TO ONE EXTREMITY

For the first time following the Nebraska Supreme Court decision in Espinoza v. Job Source, USA, a trial court has awarded benefits based on loss of earning capacity to an employee with injuries to two scheduled members on one extremity under Neb. Rev. Stat. § 48-121(3).

In February 2023, the Nebraska Supreme Court held that an employee with multiple injuries along the same extremity (i.e., an injury to the right bicep and the right wrist) has suffered a “loss or loss of use of more than one member” for purposes of Neb. Rev. Stat. § 48-121(3), which entitles the employee to compensation on the basis of the employee’s loss of earning capacity rather than the schedule of benefits, so long as the court determines that a) the schedule of benefits does not adequately compensate the employee, and b) the loss of earning capacity will likely be at least 30 percent (for more information on Espinoza v. Job Source, USA, click here). Espinoza opened the door to the possibility that an injury that would have once been compensated in accordance with an impairment rating could now amount to permanent total disability on the basis of loss of earning capacity.

On September 19, 2023, that very scenario unfolded in Nebraska Workers’ Compensation Court. In Hernandez v. JBS Holdings, an employee sustained injuries to his left leg and his left foot in the same accident. The defense medical examiner opined that the injuries combined for a 2 percent permanent partial impairment rating to the left lower extremity. However, a vocational counselor determined that, given the employee’s history of working in only medium- and heavy-demand jobs, his loss of earning capacity was 100 percent. The court held that 1) the employee’s injuries to the left leg and the left foot were to be considered as two separate members per Espinoza, and 2) the 2 percent impairment rating did not adequately compensate the employee for his injuries. Therefore, the court awarded the employee based on the 100 percent loss of earning capacity, resulting in a finding of permanent total disability.

This trial court decision exemplifies the impact of Espinoza— what would have previously resulted in permanent partial disability benefits based on a 2 percent impairment to the leg ($2,056.26 in Hernandez) now results in an award of permanent total disability ($24,866.40 per year for life in Hernandez).

The outcome of Hernandez makes clear how the Espinoza decision can dramatically increase the value of claims involving multiple injuries to one extremity. We suspect this topic may be one that is the subject of proposed legislation in the upcoming session. Baylor Evnen Wolfe & Tannehill actively monitors legislation and appellate decisions that impact our workers’ compensation clients— keep an eye on our blog and join our mailing list for updates.

This post was drafted by associate attorney Makenzie Falcon, and Adam Barrett, a law clerk and future member of Baylor Evnen Wolfe & Tannehill’s workers’ compensation practice group. For questions regarding this case or Nebraska workers’ compensation, feel free to contact any of our workers’ compensation attorneys at (402) 475-1075.