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Tennessee Supreme Court Affirms Attorneys’ Fees Award in Workers’ Comp Case


A Special Workers’ Compensation Appeals Panel of the Tennessee Supreme Court recently upheld a $50,500 award of attorney fees and costs imposed by the Court of Workers’ Compensation Claims against an employer who originally denied benefits but agreed to pay them the day before an expedited hearing.


The suit stemmed from a 2016 injury sustained by employee John Earheart, Jr., while working as a delivery driver for Central Transport.

The injury required surgery, after which the employee began to experience radiating lower back pain. The doctor released him to restricted work in March 2018, and he continued to work until the employer (apparently erroneously) terminated him for failing to show up for work in December 2018, after he had reached MMI but the employer had no unrestricted openings. In 2019, the employee petitioned for a benefit determination seeking additional treatment. The trial court held an expedited hearing in October 2020, and ordered the employer to provide separate panels of specialists to treat the employee’s hip and back pain. The trial court also referred the case to the Compliance Program of the Bureau of Workers’ Compensation to consider penalties. The employer did not appeal.


The employee filed a federal suit for retaliatory discharge.

In January 2021, the employee sought temporary disability benefits from the time he was terminated in 2018 to when he obtained new employment in August 2019. The trial court set an expedited hearing to address the employee’s request for temporary disability benefits. The day before the hearing, the employer agreed to pay the $22,000 in temporary disability benefits requested. At the hearing, the employer agreed to pay a 25% penalty ($5,500) and the employee’s attorney agreed to reserve it? until the compensation hearing his request for attorneys’ fees.


The trial court held a compensation hearing in September 2022 at which the sole issue was whether the employee was entitled to attorneys’ fees and costs for the employer’s failure to pay temporary disability benefits timely.

The employee testified regarding the events leading to his termination and presented the deposition of his treating physician as well as depositions taken in the retaliatory discharge case. The employee’s counsel submitted his time records and affidavit in support of his fee request of $50,505.50. The employer offered no evidence at the hearing, instead arguing that fees and costs were not recoverable because the employer had paid the benefits voluntarily. The trial court ordered $50,500 in attorney fees, finding that the employer wrongfully failed to timely pay the temporary total benefits, rejecting the employer’s argument that no fees were appropriate pursuant to Tenn. Code Ann. Section 50-6-226(d)(1)(B) because the benefits were paid voluntarily. The court also found that the extensive efforts of the employee’s attorney in deposing numerous lay and medical witnesses in the federal retaliatory discharge case led to the employer’s concession that it owed the benefits.


The Appeals Board affirmed, rejecting the employer’s arguments, finding that the employer’s agreement to pay benefits and penalty “did not insulate it from a later determination by the trial court that attorneys’ fees and costs are appropriate due to a wrongful denial or failure to timely initiate benefits.”

The Appeals Board also found that the employer waived any argument that fees and expenses could not be heard later when it voluntarily paid the benefits without contesting employee’s ability to seek a fee. Upon considering the reasonableness of the fees awarded, the board noted the employer’s failure to argue that the award was erroneous or excessive, and concluded that the trial court did not abuse its discretion in awarding the fees.


The Tennessee Supreme Court upheld the fee award, adopting the Appeals Board’s opinion in total. In so doing, the court rejected the employee’s request to find the appeal frivolous.

Although this is a somewhat unusual win for the employee, the award seems to have resulted from a series of unfortunate events, with some lessons to be learned. The result might have been different (1) absent the wrongful termination, which appeared to result from a miscommunication or misunderstanding on the employer’s part; (2) absent the employer conceding it owed the temporary total benefits on the eve of trial, and believing the fees would not be awarded after a voluntary payment, failing to object to a later fee decision; and (3) if the employer had presented evidence of its own, challenged the evidence presented by the employee, or argued that the award was erroneous or excessive.

 

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