Andrews, Torey v. Yates Services, LLC

TENNESSEE BUREAU OF WORKERS’ COMPENSATION

WORKERS’ COMPENSATION APPEALS BOARD

Torey Andrews ) Docket No. 2016-05-0854

)

v. ) State File No. 58300-2016

)

Yates Services, LLC, et al. )

)

)

Appeal from the Court of Workers’ )

Compensation Claims )

Dale Tipps, Judge )

Affirmed and Certified as Final – Filed May 8, 2018

The employee sought attorneys’ fees and expenses as a result of the employer’s alleged

wrongful denial of the employee’s claim for benefits pursuant to Tennessee Code

Annotated section 50-6-226(d)(1)(B) (2016). In an “Agreed Stipulation,” the parties

acknowledged the employee’s entitlement to certain permanent disability benefits and

agreed the employee “has the right to seek additional benefits at the conclusion of the

[initial] compensation period.” Thereafter, the employee filed a “renewed motion” for

attorneys’ fees and expenses and argued “‘wrongfully denies’ should be interpreted such

that an employer who has denied benefits . . . must pay for attorney’s fees/expenses . . .

once a favorable decision of employee benefits has been issued absent some compelling

reason to the contrary.” In response, the employer argued that “wrongful” means more

than a mere mistake or error and, in any event, the court should not address the

employee’s claim for attorneys’ fees and expenses prior to the conclusion of the case.

The trial court denied the employee’s motion for attorneys’ fees and expenses,

concluding that “‘wrongfully’ in this context requires more than the mere existence of a

denial” and “requires, at a minimum, a finding that the employer’s denial lacked good

cause.” Upon careful consideration of the record, we affirm the trial court’s decision on

other grounds and certify the compensation order as final.

Judge Timothy W. Conner delivered the opinion of the Appeals Board in which Presiding

Judge Marshall L. Davidson, III, joined. Judge David F. Hensley concurred separately.

Samuel B. Garner, Jr., Pulaski, Tennessee, for the employee-appellant, Torey Andrews

John R. Rucker, Jr., Murfreesboro, Tennessee, for the employer-appellee, Yates Services,

LLC

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Factual and Procedural Background

Torey Andrews (“Employee”), an assembly line worker employed by Yates

Services, LLC (“Employer”), alleged an injury to his back on July 21, 2016, while

installing windows in car doors. Employer initially accepted the claim as compensable

and provided a panel of physicians. However, Employer denied additional benefits after

receiving a medical opinion from the authorized physician indicating Employee’s

condition did not arise primarily out of his employment. Employee sought treatment on

his own and obtained a medical opinion that his injury arose primarily out of his

employment. Following an expedited hearing, the trial court accepted the opinion of

Employee’s physician, found Employee was likely to prevail at trial, and ordered

temporary disability and additional medical benefits. That decision was not appealed.

Thereafter, Employee filed a motion for attorneys’ fees and expenses. Relying on

Tennessee Code Annotated section 50-6-226(d)(1)(B), Employee asserted Employer

denied benefits “absent [a] valid basis” and, thus, “wrongfully denied” his claim.

Employer opposed the motion and noted section 50-6-226(d)(1) was silent as to when a

determination of attorneys’ fees and costs should be made. It argued fees and costs

should be determined at the end of the case rather than in the midst of the litigation. In

denying Employee’s motion, the trial court did not explicitly address the meaning of the

phrase “wrongfully denies” as used in section 50-6-226(d)(1)(B), but found Employer’s

actions were reasonable under the circumstances. The court explained that “[i]t is

unrealistic to expect [Employer] to continue to provide benefits once the authorized

doctor opined the injury was not work-related, and it would be inequitable to punish it for

observing the statutory presumption of correctness of that opinion.” On appeal, we

vacated the trial court’s order and remanded the case, concluding “the better practice is to

resolve [attorneys’ fee disputes] after the litigation has run its course and the parties and

the court no longer face uncertainties over future developments.” Andrews v. Yates

Servs., LLC, No. 2016-05-0854, 2017 TN Wrk. Comp. App. Bd. LEXIS 35, at *7 (Tenn.

Workers’ Comp. App. Bd. May 23, 2017). We further cautioned against “adjudicating

disputes over attorney’s fees and expenses in piecemeal fashion as the case winds its way

through the litigation process.” Id. at *7-8.1

After the case was remanded, the parties entered into an “Agreed Stipulation”

indicating “Employee’s claimed injury is compensable and [he] is entitled to receive

permanent partial disability benefits” based on the calculation described in Tennessee

Code Annotated section 207(3)(A) (2017). In addition, the parties agreed “Employee has

the right to seek additional benefits at the conclusion of the [initial] compensation

1 We did not foreclose the possibility of an award of attorneys’ fees and expenses prior to the conclusion

of the case in all instances, “as each case must be evaluated based on the particular circumstances

presented.” Id. at *8.

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period.”2 The parties also asked the court to schedule an additional hearing to address

Employee’s claim for attorneys’ fees and expenses. In his renewed motion for attorneys’

fees and expenses, Employee argued “‘wrongfully denies’ should be interpreted such that

an employer who has denied benefits . . . must pay for attorney’s fees/expenses . . . once a

favorable decision of employee benefits has been issued absent some compelling reason

to the contrary.” In response, Employer argued that the word “wrongful” as used in the

statute means more than a mere mistake or error and, in any event, the court should not

address Employee’s claim for attorneys’ fees prior to the conclusion of the case. The trial

court denied Employee’s motion for attorneys’ fees and expenses, concluding that

“‘wrongfully’ in this context requires more than the mere existence of a denial” and

“requires, at a minimum, a finding that the employer’s denial lacked good cause.”

Employee has appealed.

Standard of Review

The standard we apply in reviewing a trial court’s decision presumes that the

court’s factual findings are correct unless the preponderance of the evidence is otherwise.

See Tenn. Code Ann. § 50-6-239(c)(7) (2017). However, the interpretation and

application of statutes and regulations are questions of law that are reviewed de novo with

no presumption of correctness afforded the trial court’s conclusions. See Mansell v.

Bridgestone Firestone N. Am. Tire, LLC, 417 S.W.3d 393, 399 (Tenn. 2013). We are

also mindful of our obligation to construe the workers’ compensation statutes “fairly,

impartially, and in accordance with basic principles of statutory construction” and in a

way that does not favor either the employee or the employer. Tenn. Code Ann. § 50-6-

116 (2017).

Analysis

The pertinent statute in this case, Tennessee Code Annotated section 50-6-

226(d)(1), provides in part:

In addition to attorneys’ fees provided for in this section, the court of

workers’ compensation claims may award reasonable attorneys’ fees and

reasonable costs, including reasonable and necessary court reporter

expenses and expert witness fees, for depositions and trials incurred when

the employer:

. . . .

2 This stipulation culminated in a settlement agreement that was approved by the trial court on February 5,

2018.

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(B) Wrongfully denies a claim by filing a timely notice of

denial, or fails to timely initiate any of the benefits to which

the employee is entitled under this chapter, including medical

benefits under § 50-6-204 or temporary or permanent

disability benefits under § 50-6-207, if the workers’

compensation judge makes a finding that such benefits were

owed at an expedited hearing or compensation hearing.

As we have noted previously, the legislature did not define the phrase “wrongfully

denies” when it enacted section 50-6-226(d)(1)(B). See Thompson v. Comcast Corp., No.

2017-05-0639, 2018 TN. Wrk. Comp. App. Bd. LEXIS 1, at *36 (Tenn. Workers’ Comp.

App. Bd. Jan. 30, 2018) (Davidson, J., concurring). Indeed, other courts in other contexts

have interpreted the word “wrongful” in many different ways, ranging from “a mere

mistake or inadvertence to unreasonableness or lack of good cause to bad faith or even

malice.” Id. at *40 (Davidson, J., concurring). Thus, in construing the language of this

statute in its form applicable to this case, we have only nominal guidance as to the

meaning of the phrase “wrongfully denies.”

However, during the 2018 legislative session, the General Assembly amended

Tennessee Code Annotated section 50-6-226(d)(1), which now reads as follows:

In addition to attorneys’ fees provided for in this section, the court of

workers’ compensation claims may award reasonable attorneys’ fees and

reasonable costs, including, but not limited to, reasonable and necessary

court reporter expenses and expert witness fees for depositions and trials,

incurred when the employer:

. . . .

(B) Wrongfully denies a claim or wrongfully fails to timely

initiate any of the benefits to which the employee is entitled

under this chapter, including medical benefits under § 50-6-

204, temporary or permanent disability benefits under § 50-6-

207, or death benefits under § 50-6-210 if the workers’

compensation judge makes a finding that the benefits were

owed at an expedited hearing or compensation hearing. For

purposes of this subdivision (d)(1)(B), “wrongfully” means

erroneous, incorrect, or otherwise inconsistent with the law

or facts.

Pub. Ch. 757, H.B. 2304/S.B. 2475, 110th General Assembly (Tenn. Apr. 18, 2018)

(emphasis added). While this recently enacted amendment applies only to work injuries

occurring on or after April 18, 2018, we look to the new statute as persuasive authority in

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evincing the General Assembly’s original intent. See, e.g., Fretwell v. Chaffin, 652

S.W.2d 755, 757 (Tenn. 1983) (holding that while a statutory amendment was not

retroactive, it was “declaratory of the original legislative intent”); Washington Cnty. Sch.

Sys. v. City of Johnson City, No. E2016-02583-COA-R9-CV, 2017 Tenn. App. LEXIS

832, at *48-49 (Tenn. Ct. App. Dec. 27, 2017) (“[W]hen analyzing legislative intent, we

may view a subsequent, non-retroactive amendment as ‘declaratory of the original

legislative intent.’ See Sneed v. City of Red Bank, 459 S.W.3d 17, 32 (Tenn. 2014).”).

Given that this amendment is the legislature’s only expression of the intended meaning of

the phrase “wrongfully denies” in the context of section 226(d)(1)(B), we consider this

definition in assessing Employee’s claim for attorneys’ fees and expenses in the present

case.

Here, the trial court determined that “wrongfully,” in the context of section 50-6-

226(d)(1)(B) as it was then written, “requires, at a minimum, a finding that the

employer’s denial lacked good cause.” On this point, we respectfully disagree. There is

nothing in the language of the statute supporting a conclusion that an employee must

show “lack of good cause” in seeking attorneys’ fees and expenses for a wrongful denial

of a claim. Instead, we conclude that the phrase “wrongfully denies” as used in

Tennessee Code Annotated section 50-6-226(d)(1)(B) (2016) requires a finding that an

employer’s denial was erroneous, incorrect, or otherwise inconsistent with the law or

facts to support a claim for reasonable attorneys’ fees and expenses.

However, that analysis, when applied to the facts of the present case, does not end

the inquiry. We must also determine at what point in time a trial court is to consider the

incorrectness of an employer’s decision to deny a claim. In analyzing this issue, we first

note that a trial court’s decision to award attorneys’ fees and expenses pursuant to section

226(d)(1) is discretionary. The statute provides that a trial court “may award reasonable

attorneys’ fees and . . . costs” under the circumstances delineated above. Tenn. Code

Ann. § 50-6-226(d)(1) (emphasis added). In Perdue v. Green Branch Mining Co., 837

S.W.2d 56 (Tenn. 1992), the Tennessee Supreme Court addressed a similar statute that

authorized trial courts to commute periodic payments of workers’ compensation benefits

to one or more lump sum payments. The statute in question, Tennessee Code Annotated

section 50-6-229(a), also used the word “may” in authorizing a trial court to commute

such payments. The Supreme Court concluded that “[t]his statute vests discretion in the

trial court to permit or refuse lump-sum commutation.” Id. at 58. The Court also

concluded that “the discretion thus vested in the trial judge is not absolute but is a judicial

one[,] which is reviewable in the appellate courts and may be reversed if the appellate

court finds that the decision of the trial court was an abuse of judicial discretion.” Id.; see

also Steppach v. Thomas, 346 S.W.3d 488, 505 (Tenn. Ct. App. 2011) (“The word ‘may’

used in a statute ordinarily connotes discretion or permission and will not be treated as a

word of command.”). Thus, we conclude the use of the word “may” in Tennessee Code

Annotated section 50-6-226(d)(1) vests the trial court with discretion to award or not to

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award attorneys’ fees and expenses pursuant to this section, and we will review any such

decision under an abuse of discretion standard.

Next, the statute states a trial court may award reasonable attorneys’ fees and

expenses “when the employer . . . [w]rongfully denies a claim.”3 Tenn. Code Ann. § 50-

6-226(d)(1). We conclude that the plain and ordinary meaning of this language, when

read in the context of the statute as a whole, supports a conclusion that a trial court may

consider whether an employer’s decision to deny a claim was erroneous, incorrect, or

otherwise inconsistent with the law or facts at the time the denial decision was made.

Thus, it is within a trial court’s discretion to consider an employer’s decision to deny a

claim in light of evidence or other information reasonably available to the employer at the

time the claim was denied. Moreover, such a determination is fact-dependent, and we do

not intend to suggest there is a bright-line test defining the parameters of such a decision.

Instead, a trial court may consider the facts and circumstances of each individual case to

assess whether an employer’s decision to deny a claim was incorrect, erroneous, or

otherwise inconsistent with the law or facts at the time the decision was made.4

In the present case, the trial court concluded Employer was correct in relying on

the authorized treating physician’s causation opinion to deny Employee’s claim in light

of: (1) the presumption of correctness afforded the authorized treating physician’s

opinion; and (2) the absence of any other, contrary medical opinion available to

Employer at that time of the denial decision. Thus, we conclude the trial court did not

abuse its discretion in denying Employee’s claim for additional attorneys’ fees and

expenses under these circumstances, as the decision to deny the claim was not erroneous,

incorrect, or otherwise inconsistent with the law or facts at the time Employer made the

decision.5

3 In using the word “employer” in this opinion, we include authorized representatives of an employer as

well as authorized representatives of an employer’s workers’ compensation insurer or adjusting entity.

See Tenn. Code Ann. § 50-6-102(13) (2017) (“[the term employer] shall include the employer’s insurer”).

4 Employee contends that attorneys’ fees and expenses should be awarded “whenever an employer denies

a claim and a compensation judge later determines on the merits that the claim should have been

allowed.” (Emphasis added.) Section 50-6-226(d)(1) could have easily been drafted to include such an

expansive standard, but it was not.

5 Tenn. Comp. R. & Regs. 0800-02-14-.04(7) (1999) states an employer shall make initial decisions on

compensability within fifteen days of receipt of notice of the accident. We caution that an employer

should not intentionally fail to obtain and consider information reasonably available at the time a

compensability decision is made, or fail to consider new information that becomes available after the

initial decision is made. Thus, in evaluating an employee’s claim for attorneys’ fees and expenses, a trial

court may consider not only information reasonably available to an employer at the time the denial

decision was made, but also pertinent, additional information or subsequent events that bear on the denial

decision. In the present case, for example, once the trial court considered the expert medical proof and

issued its expedited hearing order, Employer’s denial decision was deemed incorrect and Employer

thereafter complied with the trial court’s order for benefits.

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Conclusion

Although we disagree with the trial court’s definition of “wrongfully” as used in

Tennessee Code Annotated section 50-6-226(d)(1)(B), we nevertheless affirm the trial

court’s determination and certify the trial court’s order denying Employee’s renewed

motion for attorneys’ fees and expenses as final.

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TENNESSEE BUREAU OF WORKERS’ COMPENSATION

WORKERS’ COMPENSATION APPEALS BOARD

Torey Andrews ) Docket No. 2016-05-0854

)

v. ) State File No. 58300-2016

)

Yates Services, LLC, et al. )

)

)

Appeal from the Court of Workers’ )

Compensation Claims )

Dale Tipps, Judge )

Concurring Opinion – Filed May 8, 2018

David F. Hensley, J., concurring in result only.

I agree with the result reached by my colleagues in affirming the denial of the

employee’s renewed motion for attorneys’ fees and costs. However, I believe the

majority’s decision to apply the definition of “wrongfully” that is included in the 2018

amendment to Tennessee Code Annotated section 50-6-226(d)(1)(B) to the statute

applicable in the instant case is misplaced and unnecessary. The majority effectively re-

writes part of the applicable statute to mirror the recent amendment, thereby announcing

its interpretation of the 2018 amendment in advance of a case in which the amendment is

at issue. In my opinion, the definition of “wrongfully” that was added to the 2018

amendment is, in large part, a response to the Appeals Board’s decision in Thompson v.

Comcast Corporation, No. 2017-05-0639, 2018 TN Wrk. Comp. App. Bd. LEXIS 1

(Tenn. Workers’ Comp. App. Bd. Jan. 30, 2018) and does not express legislative intent

for the manner in which the 2016 statute is to be interpreted. In my view, the 2018

amendment expresses legislative concerns with the Appeal Board’s decision in Thompson

and the General Assembly’s intent to define the meaning of “wrongful” rather than leave

it to the courts to define the term.1 Coincidentally, House Bill 2304, which proposed to

amend section 50-6-226(d)(1)(B), was filed for introduction on January 31, 2018, the day

1 In Thompson, I disagreed with the majority’s affirmance of the award of attorneys’ fees and costs. As

noted in my dissent, it is my opinion that the judges of the Court of Workers’ Compensation Claims do

not have the authority to award attorneys’ fees or costs provided for in section 50-6-226(b)(3) (2017) at

an expedited hearing held in accordance with section 50-6-239(d) (2017). However, in the instant case,

Mr. Andrews’ motion for attorneys’ fees and costs was filed long after the trial court’s expedited hearing

order was entered and is, therefore, not limited by section 50-6-239(d).

1

following the filing of the Appeals Board’s decision in Thompson. House Bill 2304, as

filed for introduction, did not define “wrongfully.” An amendment to the bill defining

“wrongfully” was adopted and passed on March 26, 2018, and became effective on April

18, 2018.

In Thompson, the trial court concluded “the word ‘wrongfully’ [in section 50-6-

226(d)(1)(B)] applies to the phrase ‘fails to timely initiate any of the benefits to which the

employee is entitled under this chapter.’” Id. at *23-24. The Appeals Board disagreed,

reasoning that the comma between the two phrases in section 50-6-226(d)(1)(B) and the

use of the word “or” between the two phrases “indicates that these phrases are separate

and distinct, and the word ‘wrongfully’ modifies only the first phrase (‘wrongfully denies

a claim by filing a timely notice of denial’).” Id. at *25-26. Indeed, the Appeals Board

noted in Thompson that “[h]ad the General Assembly intended the word ‘wrongfully’ to

modify both phrases, it could have easily included that word twice, or it could have

crafted the sentence in a way that applied the modifier to both scenarios.” Id. at *26. In

the present case, the majority relies on the General Assembly’s 2018 definition of

“wrongfully” to interpret the phrase “wrongfully denies a claim by filing a timely notice

of denial” in the applicable 2016 statute. Ironically, the 2018 amendment deleted the

provision authorizing an award of attorneys’ fees and costs when an employer wrongfully

denies a claim “by filing a timely notice of denial.”

Having adopted the General Assembly’s definition of “wrongfully” in the 2018

amendment as applying to the 2016 statute applicable here, the majority then addresses

the point in time that a trial court is to “consider the ‘incorrectness’ of an employer’s

decision to deny a claim.” It bears noting that the term “incorrectness” does not appear in

the applicable statute, but, again, comes from the 2018 amendment defining

“wrongfully.” In my view, the appropriate starting point for analyzing the applicable

statute in the instant case is the point in time the employer timely filed its notice of

denial. See Tenn. Code Ann. § 50-6-226(d)(1)(B) (2016).

Here, the parties do not dispute that, when the employer timely filed its notice of

denial, only one medical causation opinion existed, which was the opinion of the

authorized treating physician and, as such, is presumed to be correct. See Tenn. Code

Ann. § 50-6-102(14)(E) (2017). The physician opined that the employee’s condition was

not primarily work-related. Based on that opinion, and consistent with the Tennessee

Workers’ Compensation Act, the employer filed its notice of denial. In my opinion, the

majority needed only to consider that the employer’s timely decision to file its notice of

denial was made when a single medical causation opinion existed, which was, by statute,

presumed to be correct. Respectfully, it was unnecessary here, in my view, to look

beyond that determination or to adopt a definition from the 2018 amendment to

Tennessee Code Section 50-6-226(d)(1)(B) as applying to the applicable 2016 statute.

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