Indiana Law Review


Worker's Compensation

Robert A. Fanning*

The practice of worker's compensation law in Indiana has seen

significant change in 1988. In the short session of the Indiana General

Assembly, the Worker's Compensation Act was the subject of unpre-

cedented debate. In the courts, the ramifications of the Evans v. Yan-

keetown Dock Corp? decision were still being felt as refinement of case
law occurred.

I. Significant Statutory Changes

At least fourteen specific provisions of the Indiana Worker's Com-
pensation Act were legislatively revised in 1988 by way of Senate Enrolled
Act No. 402 and House Enrolled Act No. 1069.^ In addition, numerous

technical changes were made throughout the Act and other statutes where
reference to the Act is made. The following is a discussion of the most

significant revisions.

A. Benefit Changes

Of most significance to employees and employers in the State of
Indiana were increases for temporary total disability benefits equahng

approximately 5597o over three years^ and increases for permanent partial

impairment benefits equaling approximately 60% over three years. "^ Em-
ployers and employees alike agreed with legislators that significant in-

creases in benefit rates were reasonable and necessary. Of course, such
benefit increases are not without cost. It is estimated that Indiana

employers will see worker's compensation insurance rates rise approxi-

mately 27% overall in 1988, 10% of which can be directly attributed
to legislative action.^

1. Temporary Total Disability.—The statutory method for com-
puting temporary total disability benefits remains unchanged from pre-

vious law, with the benefit equaling two-thirds of an employee's average

* Partner, Locke, Reynolds, Boyd & Weisell, Indianapolis. B.S., Indiana Uni-
versity, 1973; J.D., Indiana University School of Law—Indianapolis, 1976.

1. 491 N.E.2d 969 (Ind. 1986).

2. See infra app. I at p. 570.

3. Ind. Code §§ 22-3-3-22, -7-19 (1988).
4. Id. §§ 22-3-3-10, -7-16.

5. See Indiana Compensation Rating Bureau Rate Request, filed July 1, 1988,

with the Indiana Department of Insurance.

553



554 INDIANA LAW REVIEW [Vol. 22:553

weekly wage up to a statutorily mandated maximum average weekly
wage. For accidents occurring on and after July 1, 1988, however, the

maximum average weekly wage to be used for the purpose of computing
temporary total disability benefits is $384 per week.^ The maximum
temporary total disability benefit is therefore computed by multiplying

two-thirds by $384 to achieve a maximum benefit of $256 per week.
The temporary total disabihty benefit for an employee earning less than

$384 per week is arrived at by multiplying the employee's actual average

weekly wage, subject to a $75 per week minimum, by two-thirds, which
will result in a temporary total disability benefit of something less than

$256 per week. An employee who is earning in excess of the maximum
average weekly wage may receive, or in the event of his death his
dependents may receive, a maximum of $128,000 for compensation or
death benefits.^

The Indiana General Assembly prospectively increased the temporary

total disability benefit by establishing increased maximum average weekly
wage figures for 1989 and 1990. On and after July 1, 1989, the maximum
average weekly wage will be deemed to be $411 per week, which will

result in a maximum temporary total disability benefit of $274 per week
and a maximum combined compensation or death benefit of $137,000.
On and after July 1, 1990, the maximum average weekly wage rises to
$441 per week leading to a maximum benefit for temporary total disability
of $294 per week and a maximum compensation or death benefit of
$147,000.«

2. Permanent Partial Impairment.—The increase in permanent par-
tial impairment benefits is the first since 1977. As in prior law, the
maximum average weekly wage and the percentage factor to be applied
for the purpose of computing the permanent partial impairment benefit

are different from those used to figure temporary total disability benefits.^

For accidents occurring on and after July 1, 1988, the maximum average
weekly wage for permanent partial impairment purposes is $166 per

week. Application of the statutory 60^o factor results in a maximum
permanent partial impairment benefit of $99.60 per week. If an average

weekly wage of less than $166 per week is earned, the permanent partial

impairment benefit is equal to 60% of the employee's actual average
weekly wage.'°

As with temporary total disability, permanent partial impairment
benefits will increase in 1989 and 1990. On and after July 1, 1989, the

6. IND. Code §§ 22-3-3-22(a), -7-19(a)(l) (1988).
7. Id. §§ 22-3-3-22(a), -7-19(h).

8. Id. §§ 22-3-3-22(a)(b), -7-19(g)(l), -7-190).

9. See id. §§ 22-3-3-10(a), -7-16(d).

10. Id.



1988] WORKER'S COMPENSATION 555

maximum average weekly wage for permanent partial impairment pur-
poses increases to $183 per week, which results in a maximum permanent
partial impairment benefit of $109.80.'' On and after July 1, 1990, the
maximum average weekly wage for impairment purposes rises to $200
per week, resulting in a maximum permanent partial impairment benefit
of $120 per week.'^

3. Credit for Excess Temporary Total Disability Benefits Paid.—
Effective July 1, 1988, the employer's credit for temporary total disability

benefits paid in excess of fifty-two weeks has been changed so that the

credit applies only after temporary total disability benefits have been

paid for more than seventy-eight weeks. ^^ As with prior law, the credit

is appHed against permanent partial impairment benefits and benefits

paid for specific losses and reduces such benefits dollar for dollar. The

net effect of the statutory change is to increase the permanent partial

impairment benefit for those employees who are temporarily totally
disabled by their work-related injuries for more than fifty-two weeks.

As an example, an employee who was injured on July 1, 1988, was
temporarily totally disabled for seventy-eight weeks, was receiving tem-

porary total disability compensation at the maximum rate and was
assigned a 20^o permanent partial impairment of the whole person,

would receive a permanent partial impairment award of $9,960.^'* The

same employee injured after July 1, 1986, and before July 1, 1988,

would receive a permanent partial impairment award of $2,560.'^ Thus,

for the employee who is disabled a year or more, the combination of
an increased permanent partial impairment benefit and a reduced credit

for excess temporary total disability paid makes a significant difference

in the compensation received for a permanent partial impairment or

scheduled loss.

4. Burial Expense.—The provision of the Indiana Worker's Com-
pensation Act calling for the payment of burial expenses not to exceed

$2,000 was changed effective July 1, 1988, to allow for a payment of

11. Id.

12. Id. For tables outlining average weekly wage minimums, maximums and resulting
benefits, see infra app. II at p. 573.

13. IND. Code §§ 22-3-3-10(a), -7-16(d).
14. Five hundred weeks of whole body benefit times 20<yo permanent partial im-

pairment (PPI) rating equals 100 weeks of PPI benefits times $99.60 per week which
equals $9,960 PPI benefit.

15. Five hundred weeks of whole body benefit times 20*^0 PPI rating equals 100
weeks of PPI benefits times $75.00 per week which equals $7,500 PPI benefit. Subtracting
the credit for twenty-six weeks of temporary total disability benefits paid in excess of

fifty-two weeks at $190 per week equals a credit of $4,940 and a net PPI benefit of

$2,560.



556 INDIANA LAW REVIEW [Vol. 22:553

up to $4,000.'^ This revision reflects the increased cost of burial and

related services and comes closer to providing the full cost of a modest

funeral and internment. The payment of burial expenses is not com-

pensation for the purpose of determining the statutory maximum payment
for compensation pursuant to Indiana Code sections 22-3-3-22 and 22-

3-7-19, and is payable even where there are no dependents entitled to

receive compensation.'^

5. Artificial Body Members.—The employer is required to provide
an artificial member, braces or prosthodontics where a compensable

injury has led to the amputation of an arm, hand, leg or foot, the

enucleation of an eye or the loss of natural teeth or existing prostho-

dontics.'^ New statutory language makes it clear that the employer may
be required to provide more than one artificial member when "medically
required." The term "medically required" is specifically defined in the

Act to exclude normal wear and tear.'^ Thus, an employee who has
suffered the amputation of a leg and receives an artificial member may
be entitled to the replacement of that member where changes in the
size, shape or further treatment of the stump make necessary the fitting
of a new prosthetic device. However, where the employee has satisfactorily

used an artificial member and wears it out, the employee is responsible
for the repair or replacement of the device.

B. Notification Regarding Suspension of Benefits

Various provisions of the Indiana Worker's Compensation Act have

allowed for the suspension of benefits where the employee has refused

to accept tendered medical services,^^ undergo medical examination,^'

accept tendered employment,^^ or where a dependent refuses to allow

an autopsy to be performed.^^ Each of the foregoing sections of the

statute have been changed effective July 1, 1988, so as to require that

the employee or dependent be served with a notice setting forth the

consequences of such an employee or dependent refusal. The Worker's

Compensation Board was mandated under these sections to prescribe

the form for such notice and, in response, the board has developed a

proposed form for use by employers in this regard. The final format

16. IND. Code §§ 22-3-3-21, -7-15 (1988).
17. See Lasear, Inc. v. Coffin, 99 Ind. App. 461, 192 N.E. 841 (1934).

18. iND. Code § 22-3-3-4(e) (1988).
19. Id.

20. Id. §§ 22-3-3-4(c), -7-17(b).

21. Id. §§ 22-3-3-6(a), -7-20(a).

22. Id. §§ 22-3-3-1 1(a), -7-16(e).

23. Id. §§ 22-3-3-6(h), -7-20(1).



1988] WORKER'S COMPENSATION 557

and the form document itself should be available soon. As of this time,

the proposed language for the form states:

NOTICE TO EMPLOYEE/DEPENDENT
OF SUSPENSION OF BENEFITS

Notice is hereby given, pursuant to the Worker's Compensation

and Occupational Disease Acts of Indiana, of the consequences

of your refusal described below: (Check appropriate paragraph)

( ) Refusal to accept medical treatment, services and supplies,

provided by or on behalf of your employer, shall bar your

compensation otherwise payable during the period of refusal.

(I.e. 22-3-3-4)

( ) Refusal to allow an autopsy shall result in a suspension of

all compensation. (I.C. 22-3-3-6).

( ) Refusal to accept employment, suitable to your partial dis-

ability, shall bar any compensation during such refusal

unless, in the opinion of the Worker's Compensation Board

of Indiana, such refusal was justified. (I.C. 22-3-3-11).^'*

The proposed notice also contains an acknowledgment of receipt to

be signed and dated by the employee or dependent. Such acknowl-

edgement is not required by the statutory revision and the refusal of

an employee to acknowledge receipt of the notification will not prevent

an employer from suspending benefits. Of course, it will be inappropriate
for an employer to suspend benefits until the employee has been served

with the notice, and problems may develop with regard to what is
adequate service. It is suggested that personal delivery to the employee

or dependent or transmittal by United States mail, postage pre-paid, to

the address stated on the Agreement as to Compensation (Form #12 or

Form #13) will be sufficient .^^ This is so inasmuch as service of pleadings
pursuant to Rule 5(B) of the Indiana Rules of Trial Procedure, ^^ as

incorporated by Rule 6 of the Rules of the Worker's Compensation

Board of Indiana,^'' is complete upon delivery or service by mail. Neither

the statute nor the board's proposed notice require proof of actual

receipt before benefits may be suspended.
Where an employer requests an employee to submit to a physical

examination, prudence dictates that the notice required by Indiana Code
sections 22-3-3-6 and 22-3-7-20 be given in advance of the scheduled

24. Worker's Compensation Board of Indiana, Notice to Employee/Depend-
ents: State Form 42606 (May 1988).

25. Id.

26. Ind. R. Tr. p. 5(B).

27. Ind. Admin. Code tit. 630, r. 1-1-6 (1988).



558 INDIANA LAW REVIEW [Vol. 22:553

examination if there is any possibility that the employee will refuse the

same. Otherwise, if the employee fails to keep the appointment, it is

likely that a second examination will have to be scheduled, with the

notice being sent prior to the second examination, before the employee

will be deemed to have knowledge regarding the effect of such refusal

sufficient to suspend benefits.^^

C. Payment of Medical Expenses by Insurer Required Where

Approved by Employer

The Indiana Worker's Compensation Act defines
*

'employer" to

include, so far as is applicable, the employer's worker's compensation

insurer. ^^ The Indiana General Assembly revised the definition to also

state: '^However, the inclusion of an employer's insurer within this

definition does not allow an employer's insurer to avoid payment for

services rendered to an employee with the approval of the employer. "^^

The change was sought to remedy the refusal by some insurance

companies to pay medical bills which were incurred by the employee at

the direction or approval of the employer at a time before the insurance

carrier had an opportunity to undertake the management of the medical

aspects of the case. The statutory change serves to clarify the prior

policy of the Worker's Compensation Board which required payment

of medical expenses incurred at the direction or approval of the employer,

even though the insurer would have recommended or preferred a different

treatment or medical provider.

An issue which will no doubt be raised by this changed definition
is whether or not the compensation insurance carrier may undertake a
change of physician where the employer had previously designated a

physician or approved the employee's use of a physician. In the author's

opinion, the statutory change found at both Indiana Code section 22-
3-6-1 and section 22-3-7-9(a) does not prohibit the insurance carrier and

the employer from agreeing upon a medical provider or course of

treatment other than that originally designated. This is so because the

Act requires the employer to provide the medical care^^ but does not

limit the employer's choice of a physician to one particular doctor.

28. The proposed notice does not make specific reference to medical examinations

under Ind, Code § 22-3-3-6 (1988) or id. § 22-3-7-20, but the notice regarding medical
treatment will likely be deemed synonymous with a notice regarding medical examination.

29. iND. Code §§ 22-3-6-l(a), -7-9(a) (1988).
30. Id.

31. For example, a physician is required after an injury, Ind. Code § 22-3-3-4(a)

(1988), and during temporary total disability. Id. § 22-3-3-4(b). Further, the employee can

be required to submit to an examination during the period of claimed disability or

impairment. Id. § 22-3-3-6(a).



1988] WORKER'S COMPENSATION 559

D. Medical Reports as Evidence

The practice of the Worker's Compensation Board of Indiana before

July 1, 1988, was to allow medical testimony either in person, by

deposition, or where all parties agreed, by the introduction of a medical

report. ^2 The unavailability of the medical provider did not need to be

established as a prerequisite to the use at trial of a deposition or agreed

report. In its 1988 session, the Indiana General Assembly was extensively

lobbied to allow the admission of medical reports, even where the parties

could not agree to stipulate their admission. The stated purpose for the

change was to avoid the expense associated with obtaining medical

depositions. The result has been an extensive revision of Indiana Code

section 22-3-3-6, which may significantly affect practice before the Work-
er's Compensation Board.

In summary, the prior law provided that a physician, whether selected

by the employer or the employee, was required to prepare a statement

in writing of the conditions evidenced by his examination of the employee

and to provide the statement to the opposing party." The law required

that the statement be exchanged as soon as practicable but not later

than ten days before the date upon which the case was set for trial. ^^

In practice, the statement was provided by the doctor to the party who
had retained him, and that party's attorney exchanged the statement

with opposing counsel. The physician's statement was required to contain

"the history of the injury, or claimed injury, as given by the patient,

the physical or mental condition of such employee, and the nature and

extent or amount of disability or impairment, if any, of such employee. "^^

If no report of an examination was exchanged as required, then the

physician could not testify before the Worker's Compensation Board,

either in person or by deposition, as to such examination.^^

As changed, the law still requires a statement in writing from the
doctor, but the exchange of the report must take place at least thirty

days before the hearing and the statement must contain the following:

(1) The history of the injury, or claimed injury, as given by
the patient.

(2) The diagnosis of the physician or surgeon concerning the
patient's physical or mental condition.

(3) The opinion of the physician or surgeon concerning the
causal relationship, if any, between the injury and the pa-

32. IND. Code § 22-3-3-6 (1982).
33. Id.

34. Id.

35. Id.

36. Id.



560 INDIANA LAW REVIEW [Vol. 22:553

tient's physical or mental condition, including the physician's

or surgeon's reasons for the opinion.

(4) The opinion of the physician or surgeon concerning whether

the injury or claimed injury resulted in a disability or

impairment and, if so, the opinion of the physician or

surgeon concerning the extent of the disability or impairment

and the reasons for the opinion.

(5) The original signature of the physician or surgeon.
^"^

If a statement meets the five requirements of subsection (e), then it

*'may be submitted by either party as evidence by that physician or

surgeon at a hearing before the worker's compensation board. "^^ Such

a statement shall be admitted into evidence by the Worker's Compensation

Board ''unless the statement is ruled inadmissible on other grounds. "^^

Language added to the statute provides a procedure for objecting to

the physician's statement on the basis that the same does not meet any

or all of the five requirements of subsection {e)^^ A failure to object
pursuant to subsection (e) precludes further objection as to whether the

statement meets the requirements of subsection (e), but apparently does

not waive objections to admissibility on other grounds. "**

Only time will tell how well the statutory revision works. Certainly
there is some question as to the "other grounds" upon which the written
statement might be ruled inadmissible in light of the fact that the statute

says that the written statement may be submitted and shall be admitted
provided that it meets the requirements of subsection (e). The language

seems to leave open the possibility that a party may submit the report
if it meets the requirements of subsection (e), but the Worker's Com-
pensation Board may not admit the report if objected to on grounds
other than compliance with subsection (e). Of course, there will also be
disputes as to whether or not the statement complies with subsection

(e), and the party submitting the report will be at risk in that regard

if he fails to correct objections raised by his opponent as to the statement's

compliance with subsection (e). In many cases, medical depositions will
still be taken and submitted to the Worker's Compensation Board. Even

in the face of an apparently complete medical report, few parties will

give up the right to cross-examine the doctor or to provide him with

additional information which may lead to a more complete opinion.

37. Id. § 22-3-3-6(e) (1988).

38. Id. § 22-3-3-6(d).

39. Id. § 22-3-3-6(e).

40. Id. § 22-3-3-6(g).

4L Id.



1988] WORKER'S COMPENSATION 561

E. Worker's Compensation Act and Worker's Compensation

Board

House Enrolled Act 1069 changes the term '* workmen's compen-

sation" to "worker's compensation" throughout the Act and renames

the Industrial Board of Indiana the "Worker's Compensation Board of

Indiana.""*^ The renaming of the Industrial Board was said to be prudent

because of its periodic confusion with other agencies or organizations.

II. Significant Court of Appeals Decisions

A. Ramifications of Yankeetown Definitions

Employers, employees and insurers are still struggling with the ap-

plication of the Yankeetown"^^ decision to jurisdictional and compensa-

bility issues. The Supreme Court in Yankeetown held that questions of

jurisdiction and compensability are to be determined by an application

of the same criteria to each issue. Thus, the Worker's Compensation

Board has jurisdiction and an employee is entitled to worker's com-

pensation benefits where there has been an injury (1) by accident, (2)
arising out of and (3) in the course of the employment. In mandating

the three-part test for jurisdiction as well as for compensability, the

Indiana Supreme Court felt compelled to address the definition of "by

accident" and, in so doing, made clear its belief that the term "by
accident" means "unexpected injury. '"^^ The unexpected injury test can

be met by occurrence of either an unexpected event or an unexpected

result."^^ Although an injury causing event such as a "fall, sHp, trip,

unusual exertion, malfunction of machine, break, colHsion, etc.'"^^ is

certainly "by accident," the unexpected occurrence of a physical symptom
while engaged in normal and routine employment activity without one

of the above-enumerated events is also an injury by accident."^^ In both

the event and result theories of accident, a crucial modifier is that the

event or result be unexpected. It is the unexpectedness of the injury

which gives employers and employees a yard stick by which to measure

compensability but is also the element of the definition of "by accident"
definition which is likely to lead to continued dispute with regard to

both compensability and jurisdictional issues.

42. Id. § 22-3-l-l(a).

43. Evans v. Yankeetown Dock Corp., 491 N.E.2d 969 (Ind. 1986).
44. Id. at 974.

45. Id.

46. Ellis V. Hubbell Metals, Inc., 174 Ind. App. 86, 93, 366 N.E.2d 207, 211

(1977) (enumerating the activities which could constitute an unexpected event).

47. See Lock-Joint Tube Co. v. Brown, 135 Ind. App. 386, 395, 191 N.E.2d 110,
114 (1963) (stating the unexpected result theory of accident).



562 INDIANA LAW REVIEW [Vol. 22:553

1. Compensability.—The element of unexpectedness may be found
in many cases reported before Yankeetown^^ A recent application of
the unexpected injury test is found in Eastham v. Whirlpool Corp."^^

Eastham had been a long term employee of Whirlpool when, on

June 14, 1982, his job was changed. On that day, he worked without
complaint and made no report of an accident to his employer. ^^ He
failed to report for work for six days thereafter and, on June 21, 1982,

asked to see the company doctor. The doctor saw him that day, diagnosed
muscle soreness, possibly related to his new job, and released him to

return to work.^^ Eastham did not return to work, asked for a medical

leave of absence, and thereafter sought conservative medical treatment

on his own." The full Worker's Compensation Board found that East-

ham's muscle soreness was not an accidental injury within the meaning

of the Act because muscle soreness was to be expected during the first

day or so of Eastham' s new job.^^
On appeal, Eastham argued that because the Worker's Compensation

Board had found that he had sustained muscle soreness while doing his

job, the necessary causal connection between the work and the injury

was established.^"^ The Indiana Court of Appeals pointed out, however,

that before causation, i.e., whether the injury arises out of the em-

ployment, need be considered, the Worker's Compensation Board must

determine whether an accident occurred.^^ In Eastham, the evidence was

that workers often complained of muscle soreness after starting the job

in question and the court of appeals held that the full Worker's Com-
pensation Board had correctly applied the law in determining that no

unexpected injury had occurred.^^ In other words, because muscle soreness

was to be expected the first day on the job, muscle soreness under such

circumstances was not an accident.

48. Early cases which discussed the word "accident" enunciated the requirement

that the event be "unexpected," See, e.g., Haskell & Barker Car Co. v. Brown, 67 Ind.
App. 178, 187, 117 N.E. 555, 557 (1917). See also Houchins v. J. Pierponts, 469 N.E.2d

786, 787 (Ind. Ct. App. 1984) (In Houchins, the involved employee knew that certain

activity would cause her knee to lock up. While engaged in that activity at work, the

knee did lock up and the injury was therefore not unexpected.); City of Anderson v.

Borton, 132 Ind. App, 684, 178 N.E.2d 904 (1961) (In Borton, there was evidence that

Borton's back condition was such that a trivial act such as walking could cause pain.

Therefore, the injury was not unexpected.).

49. 524 N,E,2d 23 (Ind, Ct. App. 1988).

50. Id. at 25, 27.

51. Id. at 25.

52. Id.

53. Id.

54. Id. at 27.

55. Id. at 28.

56. Id.



1988] WORKER'S COMPENSATION 563

The holding of the court of appeals suggests that the question of

unexpectedness is not necessarily to be determined from the employee's

point of view.^^ If the Indiana Supreme Court's unexpected injury stan-

dard is to be useful, the test of unexpectedness must be an objective

one, not based solely on what the employee says he expected. This is

so because an employee, in expressing his subjective opinion, may be
counted upon to indicate that he did not expect his injury.

In summary,
*

'injury by accident" means unexpected injury. If the

injury is caused by an unexpected event, an accident in the generally

understood sense has occurred and compensability follows. Similarly, if

the injury is the unexpected result of normal work activity, then an

accident is deemed to have occurred, even without an outside event,

and compensability must be granted. If, however, the "injury" is to be

expected from a given work activity, for example, where muscle soreness

or the recurrence of a pre-existing infirmity is anticipated, then an accident

has not occurred and compensability must be denied.

2. Jurisdiction and Exclusive Remedy,—The second area where the
ramifications of Yankeetown are being evaluated is jurisdiction and

exclusive remedy. Indiana Code section 22-3-2-6 provides:

Rights and Remedies of Employee Exclusive—The rights and
remedies granted to an employee subject to I.C. 22-3-2 through

I.e. 22-3-6 on account of personal injury or death by accident

shall exclude all other rights and remedies of such employee,

his personal representatives, dependents or next of kin, at com-

mon law or otherwise, on account of such injury or death, except
for remedies available under I.C. 16-7-3-6.^^

Indiana Code section 22-3-2-6 suggests but one test for jurisdictional
purposes. Thus, if an employee's claim involves personal injury or death

by accident, then his exclusive remedy, as to his employer, is the Workers'

Compensation Act and the proper jurisdiction for determining such claim

is the Worker's Compensation Board. ^^ The Indiana Supreme Court in

Yankeetown held that the statute:

57. Cf. Inland Steel Co. v. Almodovar, 172 Ind. App. 556, 361 N.E.2d 181 (1977),
as quoted with approval in Yankeetown. "'[T]he test as to whether an injury is unexpected

and so if received on a single occasion occurs by accident' is that the sufferer did not

intend or expect that injury would, on that particular occasion, result from what he was

doing." Evans v. Yankeetown Dock Corp., 491 N.E.2d 969, 974 (Ind. 1986) (quoting
Inland Steel Co. v. Almodovar, 172 Ind. App. 556, 361 N.E.2d 181 (1977)).

58. Ind. Code § 22-3-2-6 (1988) (emphasis added).
59. Ind. Code § 22-3-1-2 (1988) provides that the Worker's Compensation Board

has charge of the administration of the Worker's Compensation Act. Ind. Code § 22-3-
l-3(b)(l) (1988) states that the Worker's Compensation Board is "authorized to hear,

determine, and review all claims for compensation ... ." See School City of Hammond
V. Moriarity, 120 Ind. App. 663, 93 N.E.2d 367 (1950).



564 INDIANA LAW REVIEW [Vol. 22:553

Excludes all rights and remedies of an employee against his

employer for personal injury or death if the following three

statutory jurisdictional prerequisites are met:

A. Personal injury or death by accident;

B. Personal injury or death arising out of employment;

C. Personal injury or death arising in the course of employment.

Actions for employee injuries or death which do not meet each

of these prerequisites are not excluded, and may be pursued in
the courts. ^^

The Indiana Supreme Court thus disagreed with the analysis of the court

of appeals, ^^ and held that in order to determine the jurisdictional issue,

a court must make an assessment as to whether the injury arose out
of and in the course of the employment as well as whether it occurred

by accident.

Application of the supreme court's three-part test is seen in Con-

solidated Products, Inc. v. Lawrence.^^ In this case, Lawrence was

employed as a waitress for Consolidated which operated a 24-hour

restaurant. After her shift ended at 4:00 a.m., Lawrence delayed leaving

the restaurant to have a milkshake. She then went to the parking lot

with another woman who was going to drive her home. The women
were abducted at knife-point and Lawrence was injured. ^^ Lawrence filed

a civil action hoping to free herself of the limited financial benefits of

the Act, and claimed that her injury, though by accident, did not arise

out of and in the course of the employment.^ ConsoHdated filed a

motion for summary judgment contending that the Worker's Compen-
sation Act was the exclusive remedy; therefore, the trial court was without

jurisdiction.^^ The motion was denied and an interlocutory appeal was

taken. ^^ The court of appeals followed the step-by-step analysis found

in Yankeetown and reversed the trial court. ^^

60. Evans v. Yankeetown Dock Corp., 491 N.E.2d 969, 973 (Ind. 1986) (emphasis

added).

61. Evans v. Yankeetown Dock Corp., 481 N.E.2d 121, 127 (Ind. Ct. App. 1986),
vacated, 491 N.E.2d 969 (Ind. 1986). In discussing jurisdiction, the court of appeals

concluded that the sole determination was whether or not an accident had occurred; if

so, then the Worker's Compensation Board was the proper forum for determining whether

that accident arose out of and in the course of the employment.

62. 521 N.E.2d 1327 (Ind. Ct. App. 1988).

63. Id. at 1328.

64. Id.

65. Id.

66. Id.

67. Id. at 1331. Had the court of appeals affirmed the denial of the motion to
dismiss, the case may well have been tried to verdict. A finding in favor of the employer



1988] WORKER'S COMPENSATION 565

The parties had agreed that an unexpected injury occurred; that is,

that the injury was ''by accident." The court of appeals then looked

for and found a causal relationship between the injury and the em-

ployment by virtue of Lawrence being "exposed to a greater risk than

those not working a late night shift, or those working in a different

location or job."^^ The court of appeals also found the injury to be in

the course of the employment, noting that Lawrence's delay in leaving

the premises did not remove her from her employee status/^ Thus, the

Indiana Worker's Compensation Board was held to have the exclusive

jurisdiction to determine Lawrence's claim against her employer. ^°

When faced with Lawrence's claim, the Worker's Compensation
Board won't have much to decide inasmuch as there has already been
a judicial finding between the same parties that an accident arising out

of and in the course of the employment has occurred. In effect, the

requirement of Yankeetown that the three tests be met for jurisdictional

purposes results in the usurpation of the function of the Worker's

Compensation Board in determining claims and compensability. This is

unfortunate because the Worker's Compensation Board has the expertise

as well as the statutory mandate to determine employee injury claims.

Further, because trial court determination of the underlying claim is

required as part of the three-part jurisdictional inquiry, the parties are

subject to the expense of presenting the entire claim rather than the

presentation of limited facts sufficient to satisfy a simple jurisdictional

inquiry.

An example of the difficulties of applying a three-part test for
jurisdictional purposes is found in House v. D.P.D., Inc.''^ House filed
an occupational disease claim with the Worker's Compensation Board

claiming that his exposure to noise at work damaged his hearing. ^^ The

would have precluded Lawrence from filing a worker's compensation claim against Con-

solidated. See, e.g., Riverview Health Care v. Wright, 524 N.E.2d 23 (Ind. Ct. App.

1988). The practitioner must remember that in the scramble to relieve the employee of

the limited worker's compensation remedy, the employee may find himself in a situation
where, there being no strict liability and no provable negligence, he receives nothing for

his injury. Such a result was, of course, the evil sought to be remedied by the Worker's

Compensation Act in the first place.

68. Consolidated, 521 N.E.2d at 1329.

69. Id. at 1330.

70. Id. at 1331. The Worker's Compensation Board's jurisdiction would be de-

pendent upon a claim having been timely filed pursuant to Ind. Code § 22-3-3-3 (1988).
It is interesting to note that Margaret Evans failed to file a claim with the Worker's

Compensation Board against Yankeetown Dock Corporation within two years of the
accident and when she did file her application for benefits, it was dismissed by the Board.

71. 519 N.E.2d 1274 (Ind. Ct. App. 1988).
72. Id. at 1275.



566 INDIANA LAW REVIEW [Vol. 22:553

occupational disease claim was dismissed by the single hearing judge

because there was no showing that House was disabled; a prerequisite

to an occupational disease recovery.^^ House then filed a civil action

arguing that since his hearing loss was not covered by the Occupational

Disease Act, the exclusive remedy provision of Indiana Code section 22-
3-7-6 did not apply to bar his civil claim. ^"^ The employer filed a motion

to dismiss arguing that because House was making an employment related

claim, the Worker's Compensation Board had the exclusive jurisdiction

to hear it. The trial court dismissed House's claim.^^

The court of appeals affirmed the dismissal and indicated, in accord

with the Yankeetown decision, that a claim is a worker's compensation

claim if it is:

1. a personal injury or death by accident;

2. arising out of employment; and

3. arising in the course of the employment;''^

and is an Occupational Disease claim if the employee has suffered:

1. an occupational disease and

2. "disablement" or death. ^^

According to the court of appeals, since there was no showing of

disablement, the occupational disease claim was properly dismissed. The

court of appeals also concluded that the applicability of the Worker's

Compensation Act must be assessed before the jurisdictional issue can

be resolved. The court found causation and course of employment''^ and

held that the Worker's Compensation Board had the exclusive jurisdiction

to determine the claim.''^

The first of the difficulties raised by the House decision relates to
the court of appeals' recognition of the three-part test mandated by

Yankeetown and its failure to apply all three tests. It seems clear that

the court of appeals was confronted with a claim which was not com-

pensable as an occupational disease and may very well not have been
compensable as an accident. ^^ The court of appeals apparently felt that

73. Id.

74. Id.

75. Id.

76. Id.

11. Id. at 1275-76.

78. Id. at 1276. The findings of "arising out of and in the course of" was made
inasmuch as the employer conceded those points. Id.

79. Id.

80. See Martinez v. Taylor Forge & Pipe Works, 174 Ind. App. 514, 368 N.E.2d
1176 (1977). The court of appeals in Martinez applied the unexpected result theory of an



1988] WORKER'S COMPENSATION 567

as a work-related claim, the Worker's Compensation Board should have

the exclusive jurisdiction to make that determination. The court of appeals

made the correct decision, and chose to defer to the Worker's Com-
pensation Board the determination as to whether the loss of hearing

was unexpected and therefore compensable under the circumstances.^'

Technically, according to the Yankeetown decision, such inquiry would

be required to be undertaken by the court in order to satisfy the first

of the three jurisdictional tests. ^^

A second and potentially more disruptive problem which can be
inferred from House relates to the use of identical tests for jurisdiction

and compensability. With a civil case pending, the court of appeals

apparently believed that House's claim, being for an employment related

personal injury, was proper for Worker's Compensation Board deter-

mination. But, if the court of appeals had determined that the hearing

loss was not an unexpected injury and therefore not compensable, an

application of Yankeetown would lead to civil jurisdiction. This is so

by virtue of the supreme court's statement that employee actions which

do not meet each of the three tests are not excluded by the Worker's

Compensation Act and ''may be pursued in the courts. "^^ In other

words, if a claim meets the three-part test, the Worker's Compensation

Board has the exclusive jurisdiction and a right to compensation exists;

but, if the claim fails to meet any one of the three tests, compensation

is denied and civil jurisdiction exists. The error of this proposition is

that the Worker's Compensation Board can have the exclusive jurisdiction

of a claim but determine that such claim is not compensable. For example,

in House, the Worker's Compensation Board may very well determine
that gradual hearing loss is not an unexpected injury and therefore is

not an accident, and deny compensation. However, such denial does

accident to Martinez's gradual hearing loss and concluded that the hearing loss did not

constitute an injury by accident. That result should not change because of the Yankeetown

decision as the accident standard applied in Martinez was the same as proposed in

Yankeetown.

81. House, 519 N.E.2d at 1276. Presumably, the court of appeals felt that the

Worker's Compensation Board, as a finder of fact, would be well qualified to determine

whether the injury was unexpected.

82. The court of appeals in House concluded that the question of whether an

injury was "by accident" is resolved by looking to causation, thereby confusing the three

tests. Such an approach side-stepped the difficult issue of determining whether gradual

hearing loss was an accident after Yankeetown. Such an approach is at direct odds with

the court of appeals' decision in Eastham v. Whirlpool Corp., 524 N.E.2d 23 (Ind. Ct.

App. 1988), where the determination of an accident was held to be completely separate

from causation. The confusion may arise from the fact that the tests for jurisdiction and
compensability are the same.

83. Evans v. Yankeetown Dock Corp., 491 N.E.2d 969, 973 (Ind. 1986).



568 INDIANA LAW REVIEW [Vol. 22:553

not strip the board of its jurisdiction or the employer of the protection

afforded it under the Worker's Compensation Act. Similarly, the finding

in Eastham v. Whirlpool Corp.^^ that Eastham did not have an accident

does not mean that Eastham has a civil cause of action for his strained
muscles. One can also envision numerous other situations, such as where
an employee with a long-standing vascular insufficiency in his lower

extremities subsequently develops a skin ulcer on his leg and claims a

right to compensation because he must stand at work. If the Worker's

Compensation Board rules that the skin ulceration did not arise out of

the employment, such ruling should not open the way for a civil action
against the employer.

The Supreme Court in Yankeetown, by making its test for jurisdiction

the same as that for compensability, arguably has opened the door for

civil action in every case where compensation is denied because there

was either no accident, or the injury did not arise out of or in the

course of the employment. There are cases tried every week before the

Worker's Compensation Board which result in a determination that one

of those three elements for compensability is absent, but such deter-

mination does not lead one to conclude, ipso facto, that a civil court

has jurisdiction.

B. Jurisdiction and Exclusive Remedy as to Co-employees

Two recent cases demonstrate the exclusive remedy defense and its
apphcation to co-employees. In Sharp v. Bailey, ^^ Bailey was a truck

driver who owned his truck and leased it to Jack Grey Transport, Inc.
(Transport). Sharp was a truck driver whose rig was owned by Ruben
Adams Trucking (Adams) and leased to Transport as well. Bailey was
injured in a collision with Sharp and thereafter sued Sharp, Adams and
Transport. ^^ The trial court granted summary judgment in favor of Sharp
and Adams but denied it as to Transport. The court of appeals found
that Bailey was an employee of Transport because of the control which

Transport had over him by virtue of the rules and regulations of the
Interstate Commerce Commission. Thus, Bailey's exclusive remedy as to
Transport was the Indiana Worker's Compensation Act.^^

The court of appeals affirmed the action of the trial court as to

Sharp, holding that because he too was an employee of Transport, he

and Bailey were co-employees.^^ The court went on to hold that the

84. 524 N.E.2d 23 (Ind. Q. App. 1988).
85. 521 N.E.2d 368 (Ind. Ct. App. 1988).

86. Id. at 369.

87. Id. at 370.

88. Id. Ind. Code §§ 22-3-2-6 and 22-3-2-13 (1988) when construed together prohibit
a suit against a fellow employee.



1988] WORKER'S COMPENSATION 569

action against Adams must also fail. Because Sharp could not be liable
to Bailey, Adams, as a co-employer of Sharp, could not be responsible

to Bailey for Sharp's acts under a respondeat superior theory of liability.*^

In Rogers v. Hembd,^^ Rogers was an architect and a vice president/

employee of Darryl's Restaurant. Hembd was employed by Darryl's
Restaurant as a waitress. She was injured when she descended a flight

of stairs to a landing and was struck by a door being opened onto the

landing. Rogers had designed the restaurant, including the stairs, landing

and door arrangement in question.^'

In reversing a judgment in favor of Hembd, the court of appeals
found that the Worker's Compensation Act was Hembd's exclusive
remedy. ^^ Hembd argued that as an architect, Rogers was subject to
suit as a third party because of his professional status. The court of

appeals drew a distinction between Rogers' actions as an architect which

were subject to the control of Darryl's Restaurant and the actions of

a company physician who, by virtue of his profession, exercised judgment
independent of his employer,^^ and found Rogers was an employee of

the restaurant and, therefore, a co-employee of Hembd's. Hembd also
argued that she was entitled to sue Rogers because of his dual capacity

as both an employee and an officer of the corporation. That argument

was Ukewise rejected. ^"^ Based upon these two cases, it can be safely
stated that the revisions of the Worker's Compensation Act and the

ramifications of Yankeetown have not disturbed the availability of the

exclusive remedy defense to co-employee defendants in civil actions.

89. 521 N.E.2d at 370.

90. 518 N.E.2d 1120 (Ind. Ct. App. 1988).

91. Id. at 1121.

92. Id. at 1124.

93. Id. at 1122-23. See Ross v. Shubert, 180 Ind. App. 402, 407-08, 388 N.E.2d

623, 627-28 (1979) (company physicians were not immune from suit by virtue of the fellow
servant rule).

94. 518 N.E.2d at 1122-23. The dual capacity argument was rejected based on

Witherspoon v. Salm, 251 Ind. 575, 243 N.E.2d 876 (1969); Jackson v. Gibson, 409

N.E.2d 1326 (Ind. Ct. App. 1980); and Needham v. Fred's Frozen Foods, Inc., 171 Ind.
App. 671, 359 N.E.2d 544 (1977).



570 INDIANA LAW REVIEW [Vol. 22:553

Appendix I

INDIANA WORKER'S COMPENSATION ACT

Summary of Changes

Senate Enrolled Act 402. (Changes effective July 1, 1988, except as

indicated)

Benefit increases for temporary total disability equal approximately 55 ^o

over the next three years as follows:

After July 1, 1988, maximum average weekly wage equals $384.00;
maximum temporary total disability benefit equals $256.00. Max-
imum death benefit equals $128,000.
After July 1, 1989, maximum average weekly wage equals $411.00;
maximum temporary total disability benefit equals $274.00. Max-
imum death benefit equals $137,000.
After July 1, 1990, maximum average weekly wage equals $441.00;
maximum temporary total disability benefit equals $294.00. Max-
imum death benefit equals $147,000.
I.e. 22-3-3-22

I.e. 22-3-7-19

Benefit increases for permanent partial impairment equal approximately

60% over the next three years as follows:

After July 1, 1988, maximum average weekly wage equals $166.00;
maximum permanent partial impairment benefit equals $99.60.
After July 1, 1989, maximum average weekly wage equals $183.00;
maximum permanent partial impairment benefit equals $109.80.
After July 1, 1990, maximum average weekly wage equals $200.00;
maximum permanent partial impairment benefit equals $120.00.
I.e. 22-3-3-10

I.e. 22-3-7-16

The credit against permanent partial impairment benefits for temporary

total disability benefits paid in excess of 52 weeks has been changed so

that the credit applies only after the payment of temporary total disability

benefits for more than 78 weeks.

I.e. 22-3-3-10

I.e. 22-2-7-16

Funeral benefits will increase from $2,000 to $4,000.

I.e. 22-3-3-21

I.e. 22-3-7-15

Disability benefits will be subject to child support withholding.

I.e. 22-3-2-17

I.e. 22-3-7-29



1988] WORKER'S COMPENSATION 571

All parties and attorneys will receive notices of hearings and of con-

tinuances.

I.e. 22-3-4-5

Real estate professionals, as defined by the statute, are exempted from

the Worker's Compensation Act.

I.e. 22-3-6-1

I.e. 22-3-7-9

Artificial limbs and prosthetic devices must be replaced when "medically

required." The term "medically required" does not include normal wear

and tear.

I.e. 22-3-3-4

I.e. 22-3-7-17

Employees or dependents must be notified of the consequences of a

refusal to accept tendered medical services, undergo medical examination,

accept tendered employment or allow an autopsy.

I.e. 22-3-3-4

I.e. 22-3-3-6

I.e. 22-3-3-11

An insurer cannot refuse to pay the medical charges of a medical provider
approved by the employer.

I.e. 22-3-6-1

I.e. 22-3-7-9

The current 20 year period between exposure to asbestos and disability

has been increased to 35 years. The period for filing claims with the
Residual Asbestos Injury Fund has been reopened to July 1, 1990. Upon
the death of an individual receiving benefits from the Residual Asbestos

Injury Fund, a dependent may receive the greater of the remaining 52
weeks of benefits or $4,000.

I.e. 22-3-7-9

Dependents of the recipients of residual asbestos fund benefits who die
before exhausting the remainder of their benefit receive the balance of

the 52 week benefit or $4,000 whichever is greater.

I.e. 22-3-11-3

House Enrolled Act 1069, (Changes effective July 1, 1988, except as
indicated) The term "Workmen's Compensation" has been changed to
"Worker's Compensation" throughout the Act.

The new name for the "Industrial Board of Indiana" will be the
"Worker's Compensation Board of Indiana."

I.e. 22-3-1-1

The Worker's Compensation Board may set hearings in the county where
the injury occurred or any adjoining county. (Effective March 5, 1988)

I.e. 22-3-4-5

Medical reports may be presented by either party in lieu of live testimony
or deposition. The report must be exchanged 30 days prior to the hearing
and contain the following information:



572 INDIANA LAW REVIEW [Vol. 22:553

I.e. 22-3-3-6

I.e. 22-3-7-18

(1) The history of the injury, or claimed injury, as given by
the patient.

(2) The diagnosis of the physician or surgeon concerning the

patient's physical or mental condition.

(3) The opinion of the physician or surgeon concerning the

causal relationship, if any, between the injury and the patient's

physical or mental condition, including the physician's or sur-

geon's reasons for the opinion.

(4) The opinion of the physician or surgeon concerning whether

the injury or claimed injury resulted in a disability or impairment

and, if so, the opinion of the physician or surgeon concerning

the extent of the disability or impairment and the reasons for

the opinion.

(5) The original signature of the physician or surgeon. The

worker's compensation board shall admit into evidence a state-

ment that meets the requirement of this subsection unless the

statement is ruled inadmissable on other grounds.

Any party may object to the report on the basis that it does not meet
the requirements of the Act, but the objection must be made 20 days
prior to the hearing.