Delphi Group Notes Continued Strength of Excess Workers’ Comp Business

February 4, 2003

  • November 26, 2009 at 10:54 am
    Robin Crank says:
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    Dear Governor Jay Nixon:

    I would like you to explain to me the following questions.

    1. How can Zurich Insurance deny medical treatment for an injury they know happened at Willow Brook Foods? I was told that because I fell the injury was not covered. If I am at work, the law should state that all injuries are covered if on the clock.
    If it does not the people of Missouri will be contacting you office.

    2. The people of Missouri (Springfield) will be contacting your office to find out how a back injury can be done at work, back surgery performed by a workers comp surgeon, and the damage from that surgery that caused permanent nerve damage not be covered.

    3. I am making copies of all emails that remain unanswered by your office and all requests that I have made for your office to contact me for distribution to the people of Springfield. My daughter will be delivery them door to door. Your office is supposed to serve the residents of Missouri.

    4. Why is workers compensation allowed to take a year and half for an emergency medical hearing?

    5. Why is workers compensation judges given 120 days to award a judgment. A jury for a murder trial are not even given that amount of time for a judgment? A judge hears the testimony and issues a verdict immediately not 120 days later.

    6. Trust me, I will do everything I am physical able to do on a daily basis until I get the workers compensation laws changed. To favor the working man in Missouri and not the insurance company.

    7. I would like to know how the second injury fund is going broke. Who is not paying into the fund and to whom the money in that fund is going too. Can you please tell me how to obtain that information. I am sure it is public information right.

    I had a final hearing on August 26th 2009 after fighting with workers compensation for 6 years. I have two back injuries and permeant nerve damage because it took Zurich Insurance 18 months for them to okay my surgery.

    In the 6 years, I have had my medication for pain stopped and had to fight to get it started and then on a monthly basis after it was restarted.

    I have contacted every elected offical in MO and nobody told me that the real reason no one would schedule a final hearing on my case is because it involved the second injury fund that is broke.

    I received a phone call from my attorney on November 23 stating that Judge Margret Holden was having problems deciding what percentage of my back injury was from the injury in 2003 and what part of it was from the injury in 2005. So she would not be awarding anything on my back.

    Still no one said that she cannot award anything on the second injury because it has a freeze on it and is not settling new cases. I want to do a news report with anybody in the media that will do one. I have hundreds of unanswered emails from elected officals, the workers comp division and my attorney.

    The emails my attorney has answered has been filled with a bunch of lies, and he has not even been abled to get my pills refilled. I have had to contact the state rep to get my pills. All my attorneys Jim Corbett with Corbett Law Firm and John Newman with Newman Law Firm has done is stall for time.

    John Newman told me that he would attend a hearing for my medical bills his partner Danette Aldridge had the hearing postponed did not tell me there was another hearing. A judgment was issued against me for these bills because no one from Newman Lawfirm showed up to represent me. As well as, John Newman refused to fill out paper work for me to get a loan against the settlement. Causing me all kind of financial prolbems, so I had to get the loan from a friend of Jim Corbett’s friend at twice the interest rate.

    I have asked both attorneys to withdraw from this case and they have filed the paper work but it has not been approved by Judge Margret Holden as far as I know.

    It took Social Security exactly 6 weeks to determine that I was disabled and that was without an attorney because of the nerve damage. Vocational Rehap accessment was that I could not be placed without further treatment. Unable to stand and sit makes it hard to work.

    Now to find out the truth, that the 2nd injury fund is broke and a freeze is on it against new settlements just makes me irrate. I am sending this email to all 50 states as well as the President Obama.

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    Chris Koster freezes payments from Second Injury Fund
    By Tony Messenger
    POST-DISPATCH JEFFERSON CITY BUREAU
    10/02/2009

    JEFFERSON CITY — Missouri Attorney General Chris Koster froze settlement payments from a workers’ compensation fund on Thursday, citing a dwindling balance that could leave the Second Injury Fund broke before the end of the year.

    On Tuesday, the Department of Labor shared projections with the state treasurer’s office and Koster’s office, indicating that revenue coming into the Second Injury Fund is surpassed by payments going out. The fund was designed to protect businesses from paying for new work injuries that aggravate existing disabilities.

    “Our office has determined it is in the best interests of existing claimants and the state that no new settlements be entered into until a greater understanding of the fund’s solvency is reached and until further consultations with executive and legislative leaders are completed,” Koster said.

    The revenue projections aren’t that much of a surprise. The solvency of the fund has been a concern since the cap on settlement payments was increased in 2001 to $60,000 from $40,000, and lawmakers put a cap on the fee that employers pay into the fund. State auditor Susan Montee predicted in an audit in 2008 that the fund would be insolvent by midyear. She was off by just a couple of months. MORE POLITICAL NEWS
    See all our political coverage
    The Political Fix keeps you on top of local, state and national politics.

    Since this time last year, the fund’s value has dropped nearly $18 million. In August 2008, the fund ended the month with a balance of $19 million. By January of this year that balance had dropped to $9.54 million. The balance at the end of September was $1.29 million. The ending fund balance in 2007 was more than $29 million.

    The Second Injury Fund has been a hot topic in political circles since former Attorney General Bill Webster and a group of St. Louis attorneys were caught up in a federal investigation over misuse of the fund in the early 1990s.

    The fund was established after World War II to encourage businesses to hire veterans who returned from the war with some disability but could still work. The fund pays out settlements if workers get hurt on the job, and the injury aggravates a previous disability.

    The fund gets its revenue from a surcharge placed on workers’ compensation premiums. In 2005, as part of a new law that intended to cut workers’ comp costs for businesses, the Legislature capped the surcharge at 3 percent. Previously it had fluctuated, depending on the amount of claims made on the fund. If claims went up, so did the surcharge. Most years it was under 3 percent.

    That 2005 law has been successful in reducing workers’ compensation costs in the state, but that also means that revenue coming into the fund has decreased.

    Under current Missouri law, the attorney general’s office negotiates settlements in cases, often paying out lump sum settlements to injured workers instead of higher amounts that would be paid out in smaller increments over many years. Some Republican lawmakers have been critical of that practice, saying that the fund could not afford the increase in short-term payouts.

    In 2007, Gov. Matt Blunt was critical of the increase in those payouts when Jay Nixon, now the governor, was attorney general. Nixon’s staff argued that the payouts would save the state money in the long run.

    During the 2008 legislative session, Republicans led by Sen. Gary Nodler, R-Joplin, argued that the fund would soon be insolvent and they tried unsuccessfully to reduce the $60,000 cap on settlement payments.

    In March of this year, Koster decided on his own to reduce the settlement payments to $40,000, without legislative action. Now he’s suspended any new settlement agreements until the fund’s future solvency is shored up.

    “Everybody needs to come together to figure out a long-term solution,” said Jon Galloway, spokesman for Treasurer Clint Zweifel.

    The legislative solutions could include getting rid of the fund entirely, as some states have, restricting the settlement payouts, or getting rid of the cap on how much businesses pay into the fund.

    Years of Nixon mismanagement bankrupts Second Injury Fund
    October 2nd, 2009

    JEFFERSON CITY—After years of Republican warnings, the Attorney General Chris Koster yesterday announced that the state has stopped settling new settlement payments out of the Second Injury Fund (SIF). The announcement is no surprise to those who observed years of Nixon’s mismanagement of the fund.

    “Despite the evidence, Jay Nixon has flatly denied that there were any problems with the generous settlements coming out of the Second Injury Fund. On his watch, expenditures have exploded and his trial lawyer supporters benefited,” said Lloyd Smith, Executive Director of the Missouri Republican Party. “Make no mistake about: Jay Nixon’s decade and a half of mismanagement is responsible for pushing the Second Injury Fund to the brink of insolvency.”

    According to Department of Labor and Industrial Relations data, the Second Injury Fund paid out $10.5 million in 1993, the first year of Nixon’s tenure as Attorney General. By 2008, the last year of Nixon’s term, the fund paid out a $74 million—a whopping 605% on Nixon’s watch.

    One of the primary causes of the surge in expenditures was a decision to increase settlement payouts from $40,000 to $60,000—a decision that Nixon defended (KC Star, August 2, 2007).

    This explosion in expenditures comes despite Nixon’s 1992 pledge to reform the SIF. According to the Lebanon Daily Record, October 26, 1992, Nixon said: “As Attorney General, I will stop political abuses such as the Second Injury Fund scandal, where politically connected lawyers made millions at taxpayers’ expense.” Nixon also broke a campaign promise to ban lawyers with cases in front of the SIF from donating to his campaigns (Post-Dispatch, October 22, 1992 & AP, October 26, 1992). But instead, Nixon has accepted millions of dollars in campaign contributions from trial lawyer interests, including lawyers with cases in front of the SIF.

    Despite the massive increase in expenditures and a series of warnings from audits and experts, Nixon has spent the past several years denying that there was a problem with the fund, and 15 months ago he even claimed that he had “strengthened” it:

    AP, February 21, 2008: But a Nixon spokesman said the attorney general’s office has provided plenty of information about the Second Injury Fund, even if it has not responded to those specific questions… Added [Nixon spokesman Scott] Holste: “We have no indication the fund is insolvent”

    AP, June 20, 2008: Two independent evaluations have projected that fund will become insolvent in the near future… [Nixon campaign spokesman Oren] Shur called that a “baseless attack.” “He has properly managed the Second Injury Fund and strengthened it,” Shur said”

    Email I received from David Tunnel Jim Corbett’s assistant.

    Dear Ms. Crank:

    I am writing to you to so that you will understand exactly where your case stands in the procedural process.

    Judge Holden has not issued an award yet. What Judge Holden has done is this: she set up a conference call last Friday, November 13, among all of the attorneys involved in your case. She told us that she is struggling with being able to issue an award with respect to your back because the expert (doctor) testimony presented in your case did not clearly distinguish what percentage of disability in your back came from the 2003 accident and what percentage of disability in your back came from the 2005 accident.

    Missouri law states (in the Plaster v. Dayco case, among others) that an administrative law judge such as Judge Holden is not qualified to assess a percentage of disability between two different injuries to the same body part; it takes expert testimony to do that. Judge Holden’s point was that part of the evidence in your case contradicts other parts of the evidence in your case. My understanding is that you have maintained all along that your disability stems from your 2003 injury. You did not mention your May 2005 injury to Dr. Bennoch when you saw him in June 2005. Consequently, Dr. Bennoch’s written reports did not mention the May 2005 injury, but when he testified at the hearing, he testified that you do have some disability from the May 2005 injury.

    Judge Holden called us to give us a “heads up” that she is struggling with the back injuries so that she could encourage the parties to work out a settlement on your cases before she issues an award and messes up the chance of settling your case for an amount more beneficial to you than the award may turn out to be. To that end, David Bogdan got authority from his client to offer $25,000 to settle your cases. It is that offer that we called you about yesterday. The $25,000 is not what Judge Holden issued in an award. It was merely an offer to settle prior to the issuance of an award. You rejected that offer, and I relayed that rejection to David Bogdan and advised Judge Holden that we are not going to be able to settle your case, so she can go ahead and issue her award.

    I do not know when Judge Holden will issue her award, but it will probably be soon. I also do not know how much Judge Holden will award you, but there is a high possibility that your award will be less than the $25,000 offer you rejected, because of the difficulty in issuing an award on your back injuries. After Judge Holden writes her award, it is sent to the Division of Worker’s Compensation in Jefferson City, where it is reviewed by the director and issued by their office.

    I understand your eagerness to file an Application for Review to review Judge Holden’s award, and you are correct that you only have 20 days to file your Application for Review after the award is issued by the Divison of Worker’s Compensation. However, that Application cannot be filed until after the award is issued, which has not occurred yet. Incidentally, the issue that the Labor and Industrial Relations Commission will be looking at in reviewing the award is whether or not the award is based upon substantial evidence. In other words, if the Commission finds Judge Holden’s award to be based on substantial evidence, then the award will be affirmed. No additional evidence, other than evidence which has been newly discovered since the hearing, can be presented to the Commission. Therefore, the Commission usually has the exact same evidence before it as the original judge had. There are some cases where the Commission overturns the judge’s award, but most cases are affirmed by the Commission.

    I also need to advise you that it is a violation, under Missouri Code of Judicial Conduct Rule 2.03(B)(7) and and Missouri Rules of Professional Conduct Rule 4-3.5, for a party to a case to speak to a judge about the case, or attempt to influence a judge about a case, without the other parties to the case being present. Speaking or communicating to a judge without the other parties being present is called an “ex parte communication”, and the law forbids parties such as yourself, as well as attorneys, from doing it. By the same token, the law forbids Judge Holden from allowing you to communicate with her without the other parties being present. Therefore, please stop communicating with her. It is not helping your case any, particularly since she has not yet written her award. You will get a copy of the award promptly once it is issued. It is not legal or appropriate for you to communicate with the judge.

    I hope this email has been helpful to you in explaining exactly where your case stands at this moment.

    Very truly yours,
    David T. Tunnell, Attorney at Law
    CORBETT LAW FIRM, P.C.



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