Fagg v. Hutch Manufacturing Co.

Citations: 755 S.W.2d 446; 1988 Tenn. LEXIS 128

Court: Tennessee Supreme Court; June 27, 1988; Tennessee; State Supreme Court

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In the case of Mary N. Fagg v. Hutch Manufacturing Company and U.S. Insurance Group, the Supreme Court of Tennessee addressed a workers' compensation appeal involving four issues from the employer and its insurance carrier. The plaintiff, Fagg, was recognized as an employee who sustained a compensable injury during her employment. Two appeals were filed, designated as No. 12 and No. 13. Appeal No. 12 attempted to contest a preliminary award of temporary total disability benefits, which the court deemed interlocutory due to the absence of a final judgment as required by Tennessee Civil Procedure Rule 54.02. Consequently, this appeal was dismissed without further consideration.

In appeal No. 13, the primary issue was whether a two-year delay in a physician recognizing the plaintiff's chronic condition warranted the continuation of temporary total disability benefits during that period. The plaintiff's injury occurred on May 7, 1984, and she received temporary total disability payments for a total of six weeks, with the last payment on June 20, 1984. Despite ongoing treatment for her symptoms, no further payments were made until a hearing on June 5, 1986, which was delayed partly due to changes in the plaintiff's legal representation. The trial court found that the evidence supported the plaintiff's claim for temporary total disability based on her inability to work and lack of significant improvement, ultimately leading to a conclusion in favor of the plaintiff.

Benefits were determined to have accrued from June 20, 1984, until the plaintiff was either cleared to return to work or reached maximum medical improvement, neither of which had occurred. The trial court granted a stay on enforcing the judgment for temporary total disability benefits pending appeal, requiring the defendant to post a $2,500 bond. During a hearing on June 5, 1986, the plaintiff provided testimony regarding her medical treatment following an injury. Initially treated by company and personal physician Dr. Stimpson, she underwent outpatient therapy and hospitalization, where she was evaluated by neurologist Dr. Robert Finelli. She experienced adverse reactions to medication prescribed by Dr. Stimpson and subsequently dealt with gastroenteritis while under the care of Dr. Hollis Duncan, who became her primary physician. 

The plaintiff described persistent pain radiating from her lower back to her hips and legs, along with numbness in her left leg, which affected her sleep and aggravated with physical activity. Her condition worsened with exertion, necessitating further medical intervention. After expressing dissatisfaction with Dr. Stimpson, she began treatment for her back issues with Dr. Duncan and later consulted orthopedic specialist Dr. Dennis Coughlin in August 1984. 

Dr. Coughlin's deposition indicated he first examined the plaintiff for back pain that had persisted for three and a half months. Her medical history included hospital admissions for myelogram and CT scans, as well as gastrointestinal issues. His examination revealed significant tenderness in the lumbar area and occasional numbness in her legs, but overall reflexes and circulation were normal. X-rays indicated normal spinal alignment with slight post-menopausal osteoporosis but no fractures or arthritis.

On May 22, a lumbar myelogram showed a minimal anterior extra dural bulge between the fourth and fifth vertebrae, with no significant nerve sleeve defect, indicating no ruptured disc. A subsequent CT scan and epidural venogram were both normal. The diagnosis was a back strain, and the patient received effective conservative management. Surgical intervention was deemed unnecessary, and a back support was provided for symptom relief. The patient was considered fit to return to work, though her desire to do so was questioned. A residual disability of approximately five percent to the body as a whole was noted, with further treatment unlikely to improve her condition.

During a follow-up on October 9, 1984, the patient reported persistent back and leg pain, treated with medication and a back brace, but her condition was stable with no significant changes in examination findings. Additional x-rays showed normal lumbar alignment and no fractures. The orthopedic assessment concluded that a caudal block could be beneficial, but surgery remained unwarranted.

In a follow-up visit on January 15, 1986, the patient was under psychiatric care and reported new back pain following a September 1985 hospitalization, where a myelogram indicated a bulging disc and a vertebral crack. Despite experiencing pain and numbness in her left leg, examination results remained stable, showing normal movement and no neurological changes. Overall, her orthopedic and general assessments continued to reflect normal findings.

X-rays indicated normal vertebral alignment with no fractures. The physician noted that the patient's condition was unchanged since the last evaluation in August 1984, during which he recommended settling her claim as further treatment would not change the outcome. His opinion remained consistent; he assessed her impairment at 5% of the body as a whole and agreed with Dr. Finelli that surgery was unnecessary. He advised against further clinic visits, suggesting continued treatment at Overlook Hospital.

Dr. Raphael Duncan's depositions detailed his examinations of Mrs. Fagg, starting on July 31, 1984, when she reported back pain and leg pain, exacerbated by standing or walking. Subsequent evaluations revealed ongoing pain, leading to two hospitalizations for acute low back strain, with diagnoses suggesting nerve root irritation. A lumbar myelogram showed a protruding disc between the fourth and fifth lumbar vertebrae, which could cause leg pain. By May 8, 1986, while some symptoms had improved, she still suffered from significant pain. Dr. Duncan estimated her total disability at 50%, based primarily on her subjective reports, as he observed minimal physiological disturbances.

In his second deposition on August 8, 1986, Dr. Duncan confirmed that the patient had not improved and had likely reached maximum recovery, maintaining at least a 50% permanent impairment. He noted no significant progress since 1984 and referenced questionable CT scan evidence suggesting potential nerve root compression related to her symptoms.

Mrs. Fagg experienced pain and sensation issues linked to nerve root compression or irritation, but radiological studies did not indicate a need for surgery or reveal any anatomical deficits to explain her back pain. Her physical complaints appeared disproportionate to the objective symptoms observed, except for left thigh and leg paresthesia. A fifty percent permanent partial disability rating was assessed, but not according to the American Medical Association guidelines. Since the case arose before July 1, 1985, appellate review follows a material evidence standard, limiting the court's ability to weigh the evidence.

Despite this, the court found that the Chancellor made erroneous factual findings regarding the medical evidence related to the extent and duration of Mrs. Fagg's temporary total disability. The Chancellor ruled that her temporary total disability began on June 20, 1984, based on Dr. Duncan’s testimony linking her issues to a work-related injury and asserting she could not perform her job duties during treatment. Benefits were deemed to have accrued from that date until Mrs. Fagg was released to work or reached maximum improvement. 

The trial court's evaluation of the medical evidence highlighted differing views between Dr. Coughlin, who noted no objective symptoms and assigned a five percent clinical disability, and Dr. Duncan, who observed objective symptoms during treatment. Ultimately, the court found Mrs. Fagg to be temporarily and totally disabled, but determined that this condition ended as of June 5, 1986, based on Dr. Duncan's latest deposition. The trial judge's conclusions conflicted with the medical evidence, particularly Dr. Coughlin's reliance on objective findings.

Dr. Duncan's depositions indicate that throughout his treatment of Mary Fagg from her initial visit until May 1986, her condition remained largely unchanged regarding her pain and functional abilities. His diagnosis relied mainly on the patient's reported symptoms rather than objective findings. By his last examination on July 24, 1986, she continued to experience pain down her left leg and was considered to have reached maximum recovery from her injuries, yet still exhibited at least a 50% impairment. Dr. Duncan noted that significant improvement had not occurred since June or July 1984 and acknowledged the absence of anatomical deficits on imaging studies to explain her back pain. 

Both treating physicians agreed on the existence of physical pain and some level of permanent partial disability, though they differed on the severity. The Chancellor’s conclusion that Fagg experienced temporary total disability throughout the two-year treatment period lacks support. Temporary total disability benefits terminate when an employee can return to work or has reached maximum recovery, as established in case law. The Workers' Compensation Act recognizes four types of disability with specific compensation purposes, and the period of temporary total disability is limited to the time the employee is unable to work due to injury. Therefore, it would be appropriate to remand the case to determine the extent of the plaintiff's temporary total disability.

In May 1984, the plaintiff sustained an injury but has only received compensation for the first six weeks, leaving a portion of her medical bills unpaid. Immediate action is deemed necessary to reinstate her compensation. Dr. Coughlin assessed her maximum recovery date as August 17, 1984, with no clinical evidence indicating any change in her condition thereafter, which was confirmed by a follow-up examination on October 9, 1984. Dr. Duncan, who continued her treatment until the trial, also reported no significant change. The latest date for maximum medical recovery is established as October 9, 1984.

The defendants’ argument regarding Dr. Duncan's noncompliance with the American Medical Association’s impairment evaluation guidelines is considered waived based on precedent that the guidelines apply only to cases arising after July 1, 1985. The trial court awarded the plaintiff a permanent partial disability rating of 65%, which the defendants contest, citing Dr. Coughlin's much lower rating of 5%. However, the court differentiated between the legal and medical definitions of disability, emphasizing that the trial judge must consider various factors influencing a worker's ability to earn wages, beyond mere medical ratings.

The Chancellor evaluated all evidence, including the effects of pain on the plaintiff's work capacity and her overall work experience, to determine the disability rating. The court supports the Chancellor's findings. The defendants also raised concerns about the trial court's vague order regarding medical expense payments, but the case is set for remand, allowing the Chancellor to clarify this aspect if necessary.

Defendants contest a six percent penalty imposed by the trial court for failing to pay workers' compensation installments, arguing there was no evidence of bad faith. The court found no justification for the delay in payments, referencing T.C.A. 50-6-205(b), which mandates a penalty for unpaid compensation. The ruling cited Mayes v. Genesco Inc., indicating that the penalty implies bad faith is necessary for imposition. The defendants initially paid six weeks of benefits following the plaintiff's injury but then abruptly ceased payments for over four years, which the court interpreted as bad faith. Consequently, the court determined the plaintiff is entitled to temporary total disability benefits from the date of injury until October 9, 1984, followed by permanent partial disability benefits at sixty-five percent. The defendants are assessed a six percent penalty on all unpaid benefits until payments resume. The case is remanded for a detailed allocation of medical expenses and cost payment, with appeal costs assigned to the appellants.