Indiana Law Review


1998-1999 Brings New Developments to
Indiana's Worker's Compensation Law

Carol Modesitt Wyatt*

Introduction

The Worker's Compensation Act (the "Act")' strikes a compromise between

employees and employers. It provides benefits to an injured worker while, at the

same time, protecting the employer from conventional tort liability. The Act, as
written, is fairly straightforward; however, it fails to address every contingency

that arises under worker's compensation law. Certainly, times change, the courts

are continually faced with new and distinct issues necessitating an interpretation
ofthe Act that was first written so many years ago.

Indeed, the 1 998-1 999 survey period was no different. The courts addressed
important issues such as the medical management of a claim, the bad faith

statute, personal versus employment risks, evidentiary requirements, and a co-
employee's intentional acts. This Article summarizes and comments upon the
more significant worker's compensation cases published within this survey
period as well as recent legislative changes to the Act.

I. Medical Management of a Claim

Undoubtedly, two of most significant cases in this survey period were
Bloomington Hospital v. Stqfko^ and Memorial Hospital v. Szuba? Both cases
addressed key aspects of an employer's obligation to medically manage the
employee's worker's compensation claim.

A. Bloomington Hospital v. Stojko

Perhaps one of the most important cases decided by the Indiana Court of

Appeals during this survey period was Bloomington Hospital v. Stofkof' In
Stojko, the employee contracted Hepatitis C as a result of his employment, and
his claim was accepted as compensable.^ The parties stipulated to all aspects of
the claim except the issue offuture medical treatment.^ The sole issue before the

court of appeals was whether Bloomington Hospital should be required to
provide all ftiture medical treatment for Stofko's chronic disease.^ Bloomington

* Associate Locke Reynolds, LLP; B.A., Butler University, 1 994; J.D., Indiana University

School ofLaw—Indianapolis, 1 998. Ms. Wyatt focuses her practice on worker's compensation and

labor & employment law.
1. IND. Code §§ 22-3-1-1 to 12 (1998).

2. 705 N.E.2d 515 (Ind. Ct. App.;, afd on rehearing, 709 N.E.2d 1078 (Ind. Ct. App.
1999).

3. 705 N.E.2d 519 (Ind. Ct. App. 1999).

4. Stqfko, 705 ^.E.2d at 5\5.

5. See id ai 516.

6. See id.

1. See id.



1626 INDIANA LAW REVIEW [Vol. 33:1625

Hospital argued that any application for future medical treatment was subject to
Indiana Code sections 22-3-7-17* and 22-3-7-27.' The employer essentially
urged the court of appeals to interpret these sections as limiting the period of
time for which the board could order an employer to provide future medical
services.

^°

The court ofappeals declined to accept the employer's position. Instead, the
court of appeals held that an order of future medical treatment was within the
board'sjurisdiction as part ofthe "original" award because the permanent partial
impairment ("PPI") rating had not been previously adjudicated. ' ' While it agreed

with the employerthat Indiana Code sections 22-3-7-1 7 and 22-3-7-27 restrict the
modification of awards, the court noted that no modification was at issue in this
case.^^ To the contrary, the employee's application for adjustment of claim

8. Indiana Code § 22-3-7- 1 7(b) provides:

After an employee's occupational disease has been adjudicated by agreement or award

on the basis ofpermanent partial impairment and within the statutory period for review

in such case as provided in section 27(i) ofthis chapter, the employer may continue to

furnish a physician or a surgeon and other medical services and supplies, and the board

may, within such statutory period for review as provided in section 27(i) ofthis chapter,

on a proper application of either party, require that treatment by such physician or

surgeon and such services and supplies be furnished by and on behalf ofthe employer

as the board may deem necessary to limit or reduce the amount and extent of such

impairment.

IND. Code § 22-3-7-17(b) (1998).

9. Indiana Code § 22-3-7-27( 1 ) provides:

The power andjurisdiction ofthe worker's compensation board over each case shall be

continuing, and, from time to time, it may upon its own motion or upon the application

ofeither party on account of a change in condition, make such modification or change

in the award ending, lessening, continuing, or extending the payments previously

awarded, either by agreement or upon hearing, as it may deem just, subject to the

maximum and minimum provided for in this chapter. When compensation which is

payable in accordance with an award or settlement contract approved by the board is

ordered paid in a lump sum by the board, no review shall be had as in this subsection

mentioned. Upon making any such change, the board shall immediately send to each

of the parties a copy of the modified award. No such modification shall affect the

previous award as to any money paid thereunder. The board shall not make any such

modification upon its own motion, nor shall any application therefor be filed by either

party after the expiration oftwo (2) years from the last day for which compensation was

paid under the original award made either by agreement or upon hearing, except that

applications for increased permanent partial impairment are barred unless filed within

one (1) year from the last day for which compensation was paid. The board may at any

time correct any clerical error in any finding or award.

iND. Code §22-3-7-27(1).

1 0. See Stqfko, 705 N.E.2d at 5 1 8.

11. Id.

12. See id



2000] WORKER'S COMPENSATION 1 627

sought benefits and medical expenses in the form of an "original award."'^ The
court of appeals stated:

in deciding that the Board has jurisdiction as part of an original award

ofOccupational Disease benefits to order payment ofmedical expenses

for the lifetime of the employee, we are mindful that the Worker's
Compensation Act and the Occupational Disease Act are for the benefit

ofthe employee and that the Acts should be liberally construed so as not

to negate their humane purposes.'*

The court specifically focused on the fact that Hepatitis C is a continuing
condition that would most likely result in deteriorating health and increasing

medical expenses over the employee's lifetime and that an employee might not

be adequately compensated by accepting a lump sum payment at the onset ofthe
disease.'^

While the Worker's Compensation Act itself does not plainly state that an
employer might be required to provide future medical services for an indefinite

amount oftime, it is certainly clear from reading Bloomington Hospital that this
potential liability exists. It is, in fact, this potential liability that creates

somewhat of a problem when attempting to settle a claim where future medical
treatment might be contemplated. Obviously, it is difficult to value the cost of

such future treatment and, perhaps more importantly, whether such measures will
in actuality be necessary in the long run. Thus, in many cases where settlement
is not a viable option, the adjudication of an impairment may not be the end of
a claim but, rather, the beginning of long-term medical management.

B. Memorial Hospital v. Szuba^^

On December 22, 1993 Michael Szuba sustained head injuries when he
slipped and fell in Memorial Hospital's parking lot.'^ The employer. Memorial
Hospital, paid Szuba's medical expenses but, because he did not miss more than
seven days of work, Szuba did not file for temporary total disability benefits.^*

No permanent partial impairment ("PPI")'^ rating was tendered, presumably due
to the fact that injury was slight. Szuba, however, later filed an Application for
Adjustment of Claim requesting Memorial Hospital to obtain such a rating.^°

13. Id.

14. /flf. at 5 1 8- 1 9 (citation omitted).

15. See id aX5\9.

16. 705 N.E.2d 519 (Ind. Ct. App. 1999).

17. See id at 520.

18. See id

1 9. PPI benefits are payable after the injury is quiescent and the permanent loss ofa physical

function has been medically assessed. The PPI rating is a rating by degrees assigned to represent

the employee's permanent loss of function. Compensation of that loss is determined by the

scheduled rate that corresponds to the given PPI rating. See iND. CODE § 22-3-3-10 (1998).
20. See Szuba, 705 N.E.2d at 520.



1 628 INDIANA LAW REVIEW [Vol. 33 : 1 625

The issue before the Indiana Court of Appeals was whether Memorial Hospital
had an obligation to obtain a PPI rating for Szuba's injuries.^*

Memorial Hospital argued that the Worker's Compensation Act does not
assign the responsibility to obtain a rating to any particular party and that because
the rating is an "element" of Szuba's application for benefits, he ought to have

the burden ofproving PPI.^^ The court of appeals, however, rejected Memorial
Hospital's argument, stating that:

[T]he statute anticipates that the employer will provide care through the
determination of PPI. Reading the statute liberally as required by the
Act, we find that the initial PPI determination is part of an employee's
necessary medical treatment We hold that the burden ofproducing
a PPI rating lies with the employee only where the employee disagrees
with the determination provided by the employer's physician.^^

Interestingly, the court ofappeals indicated in a footnote that the expense of

a subsequent PPI determination obtained by an employee, i.e., a second opinion,
must be reimbursed to the employee by the employer if it is ultimately accepted
by the Worker's Compensation Board.^"*

In light of the Memorial Hospital opinion, the employer's obligation to
medically manage a claim can be understood to include all ofthe following: the
selection ofphysicians, the preparation offorms, the computation ofbenefits, the

provision of alternative work, and now the determination of PPI. From the
employer's perspective, the application of Memorial Hospital is somewhat
problematic, particularly in a situation where an employer is faced with an mjury

that is relatively slight in nature and the employee is treated only a few times
with minimal lost time from work. The only practical way to meet the
employer's obligation is to communicate at the outset with the employee's

treating physician and request that as part ofthe initial and continuing treatment

the physician provide his opinion whether a permanent loss of function has

occurred. Ifthe physician's opinion in that regard is solicited during the course

of the treatment rather than weeks or months later, the expense of a re-

examination for the employee for the sole purpose of impairment may be
avoided.

From an employee's perspective, if an employer fails to obtain a PPI rating
for an injured employee, it raises the question as to whether they might be liable

under the bad faith statute.^^ Certainly, as an employee's advocate, one would
make that argument but, from a practical standpoint, it would likely boil down
to whether the failure to obtain a PPI rating was merely an oversight or a blatant
disregard of the employer's obligation to obtain such rating.

21. See id.

22. See id. at 524.

23. Id. (citation omitted).

24. See id 2X52An.\\.

25. See IND. CODE § 22-3-4-12.1 (1998).



2000] WORKER'S COMPENSATION 1629

II. THE Bad Faith Provision

During the 1997-98 survey period, the Indiana Legislature enacted Indiana

Code section 22-3-4-12.1 that provided the Worker's Compensation Board with
exclusivejurisdiction to adjudicate whether an employer, worker's compensation

administer, or a worker's compensation insurance carrier "has acted with a lack

of diligence, in bad faith, or has committed an independent tort in adjusting or

settling the claim for compensation."^^ An employer, worker's compensation
administrator, or worker's compensation carrier liable under this provision faces

a $500 to $20,000 penalty plus attorney's fees and costs.^^ Until this year, there

were no reported decisions interpreting this statutory provision. In 1999, not

only was this provision constitutionally challenged, but the Indiana Court of
Appeals addressed the phrases "adjusting or settling" and "independent tort"

within the meaning of Indiana Code section 22-3-4-12.1 (hereinafter the "bad
faith statute" or the "bad faith provision").

A. Borgman v. State Farm Insurance, Co.

In Borgman v. State Farm Insurance Co. ^^ the court ofappeals held that the
bad faith statute was constitutional and, ftirther, due to its procedural nature, was
applicable to all pending claims, even those claims alleging injuries prior to July

1997—the effective date ofthe statute.^^
Ms. Borgman was employed by Sugar Creek Animal Hospital, and its

worker's compensation insurance carrier was State Farm Insurance Company
("State Farm").^^ Ms. Borgman was injured on June 24, 1995 when she fell into
one ofthe kennels maintained at her employer's place ofbusiness. She suffered

injuries to her arm and neck and sought treatment from her family physician on

the same day.^^ State Farm paid for that doctor visit and Ms. Borgman did not
seek further medical treatment until February 1996.^^

On February 19, 1996, Ms. Borgman resigned from her employment with
Sugar Creek Animal Hospital. She continued, however, to have pain associated

with her injury and, therefore, returned to her family physician where she was
referred to a neurologist. Dr. Chase." She treated with Dr. Chase in March and
April 1996 returning to her family physician in May 1996. After this visit, her
employer opined that her condition was not related to the original June 1995

26. IND. Code § 22-3-4-1 2. 1(a). For a discussion of the enactment of the bad faith

provision, see Carol Modesitt Wyatt, Recent Developments in Worker 's Compensation Law, 32

iND. L. REV. 1 137, 1 146 (1998).

27. See iND. CODE § 22-3-4- 1 2. 1 (b).

28. 713 N.E.2d 851 (Ind. Ct. App.), trans, denied, 726 N.E.2d 307 (Ind. 1999).

29. See id. at 855-56.

30. See id at 853.

31 See id.

32. See id

33. See id.



1630 INDIANA LAW REVIEW [Vol. 33:1625

work-injury.^"* She was then evaluated in June 1996 by Dr. Shay, at the request
of State Farm, whose diagnosis revealed damage to Ms. Borgman's neck and
advised that surgery was necessary to eliminate the compression of the nerve
root.^^ State Farm denied her worker's compensation claim on July 29, 1 996, and
she subsequently filed an Application for Adjustment ofClaim on November 2 1

,

1996.'"

In November 1997, State Farm sent Ms. Borgman to be evaluated by a
different physician and at that time began providing worker's compensation

medical benefits to Ms. Borgman. On July 22, 1998 the Borgmans filed a
complaint in civil court against State Farm and Sugar Creek Animal Hospital
contending that State Farm had wrongfully denied Ms. Borgman's worker's
compensation claim for eighteen months.^^ They further alleged that State Farm
acted in bad faith and in contravention of its duties under the Act in denying her
claim for benefits. Ms. Borgman requested damages for pain and suffering,
punitive damages, and attorneys fees. Mr. Borgman also asserted a loss of
consortium claim.^^

State Farm filed a motion to dismiss arguing that the trial court lacked
subject matterjurisdiction and that Ms. Borgman's exclusive remedy was before
the Worker's Compensation Board.^^ Ultimately, the Indiana Court ofAppeals

agreed.^^ The court held that the 1997 bad faith statute pre-empted the practice
of suing one's employer or worker's compensation administrator or carrier as

third party tortfeasor alleging an independent tort or negligent handling of the

claim.'*' While the Borgmans argued that the bad faith provision should not be
applied retroactively, the court stated that "the statute is procedural and merely

sets forth the proper forum for claims alleging lack of diligence, bad faith or

independent torts on the part of the employer, their worker's compensation

administrator and the insurance carrier."^^ Thus, the 1997 bad faith statute

reaches not only those claims with an injury date of July 1997 forward but also

all pending claims regardless of the injury date."*^

34. See id.

35. See id.

36. See id.

37. See id.

38. See id

39. See id.

40. See id. at 855.

41. See id. Prior to the enactment of the bad faith provision, an action by an employee

against his or her employer or worker's compensation administrator or carrier could have be

maintained in civil court for an independent tort, fraud, or gross negligence. See, e.g.. Stump v.

Commercial Union, 601 N.E.2d 327 (Ind. 1992); Vakos v. Travelers, Ins., 691 N.E.2d 499 (Ind.

Ct. App.), trans, denied, 706 N.E.2d 168 (Ind. 1998).

42. Borgman, 7 1 3 N.E.2d at 855 n. 1

.

43. See also Samm v. Great Dane Trailers, 715 N.E.2d 420, 423 (Ind. Ct. App. 1999)
(holding that retroactive application ofthe bad faith provision was appropriate), trans, denied. No.

84A01-9810-CV-381, 2000 Ind. LEXIS 66 (Ind. Jan. 26, 2000).



2000] WORKER'S COMPENSATION 1 63

1

The court in Borgman also addressed the constitutionality of the bad faith
provision. Ms. Borgman argued that the bad faith statute violated the Open
Courts Clause of the Indiana Constitution, as set forth in article I, section \2,^

because it improperly grants the Worker's Compensation Board the authority to

consider claims beyond work-related incidents."*^ The court rejected Ms.
Borgman's theory stating that article I, section 12 "does not prevent the

legislature from modifying or restricting common law rights and remedies in
cases involving injury to person or property

."^^ With respect to the bad faith

statute, the court held that the legislature was merely acting to restrict the remedy
available for a breach of duty imposed upon the employer or worker's

compensation carrier.'*^ The court further noted that "the statute simply
designates the proper forum for bringing enumerated claims against the worker's

compensation insurance carrier and does not operate to strip the Borgmans ofan
established right or recourse."**

B. Samm v. Great Dane Trailers*^

Since the enactment ofthe bad faith statute, practitioners have, at least at the

single hearing member level, debated what acts might constitute "bad faith,"
"lack of diligence," and "independent torts" as contemplated by the bad faith

provision. In Samm v. Great Dane Trailers^ the court considered the term
"independent tort" within this context.^°

On March 27, 1997 Samm injured his lower groin area while on the job. He
sought treatment with his family physician on March 31,1 997 and was diagnosed
with a hernia which would require surgery.^' Samm requested worker's
compensation benefits, and the employer responded by stating that it would have

to investigate the matter. On April 3, 1997 Samm was advised by a company
representative that the injury was not work-related and that he was being

terminated for making a false claim for worker's compensation benefits.^^ Samm
was terminated the following day. Great Dane ultimately refused to pay for
Samm's medical expenses and benefits.^^ Samm filed a complaint in civil court

44. Article I, section 1 2 ofthe Indiana Constitution provides that, ''[a]ll courts shall be open;

and every person, for injury done to him and his person, property or reputation, shall have remedy

by due course oflaw. Justice shall be administered freely and without purchase; completely without

denial; speedily without delay." IND. Const, art. I, § 12.

45. See Borgman, 713 N.E.2d at 855.

46. Id. (citing State v. Rendleman, 603 N.E.2d 1333, 1337 (Ind. 1992)).

47. See id. at 856.

48. Id.

'

49. 715 N.E.2d 420 (Ind. Ct. App. 1999), trans, denied. No. 84A01-9810-CV-381, 2000

Ind. LEXIS 66 (Ind. Jan. 26, 2000).
50. /</. at423.

51. See id Si ^22.

52. See id.

53. See id.



1 632 INDIANA LAW REVIEW [Vol. 33 : 1 625

alleging that Great Dane falsely accused him of the criminal act of fraud
constituting libel per se and that his discharge was in retaliation for pursuing his
rights under the Indiana Worker's Compensation Act. He sought both
compensatory and punitive damages.^^

Great Dane moved the trial court to dismiss Samm's complaints for
essentially the same reason as State Farm did in Borgman. On disposition ofthe
case, the court in Samm, like in Borgman, held that the bad faith provision was
retroactive in application.^^ The court, however, took a somewhat different
approach in analyzing Samm's claim. The court undertook a discussion first of
whether the legislature intended the phrase "adjusting or settling"^^ to include an

employer's tortious actions occurring after it had denied an employee's request

for benefits and, second, whether the legislature intended retaliatory discharge

and defamation to constitute "independent torts" within the meaning ofthe bad
faith statute.^^

In its quest for defining "adjusting and settling," the court concluded in this

instance that the denial of benefits constituted the final step of the company's
procedure for adjusting and settling a claim.^* In other words, it noted that there

were no internal appeal procedures and, therefore, as soon as Great Dane told
Samm that it was denying the claim, its "adjusting and settling" period was
completed.^^ Implicit in the court's discussion is the presumption that had the

same act occurred prior to the "official denial" of benefits that such act would
have been said to have occurred during the "adjusting and settling" phase. The
court stated, "We cannot say that the legislature intended the 'adjusting and
settling' process to include the discharge ofthe claimant after the employer has

finally denied his request for benefits."^** Essentially, it can be inferred from

Samm that an employer or worker's compensation administrator or carrier is
subject to liability under the bad faith provision only during that time frame for

which an initial decision on compensability is being determined and, also, for
that period oftime that the claim remains open in the event that compensability

is accepted by the employer or insurance carrier.

The more fascinating component of Samm, however, was the court's
discussion ofwhat constitutes an "independent tort" under the bad faith statute.

The court concluded that the legislature did not intend to include as an
independent tort a claim of retaliatory discharge, where such claims are based

upon an employee's allegation that he or she was discharged for filing or
pursuing worker' s compensation benefits.^' Although recognizing that retaliatory

discharge sounds in tort rather than contract, the court found that it was not an

54. See id

55. See id. dX 423.

56. /^. at 424.

57. Id

58. Id

59. Id

60. Id

61. See id at 425-26.



2000] WORKER'S COMPENSATION 1633

independent tort as contemplated by the statute.^^ The court focused primarily

on the fact that Indiana is an at-will employment state" and that, as such, courts
have acknowledged only limited exceptions to this doctrine, one of which an

exception for employees discharged in retaliation for filing or pursuing worker's

compensation benefits.^ The court undertook a lengthy discussion of Indiana

cases addressing this exception and, finally, concluded that:

The case law reflects a clear, definite policy in this State supporting an
employee's right to file a claim for worker's compensation benefits

and to be free from coercion or threats oftermination in exercising that

right. . . . We presume that the legislature was aware of this policy in
passing I.C. 22-3-4- 12.1 and intended no changes in the interpretation of

such policy
"

As further support for its holding, the court recognized that the bad faith
provision allowed only a recovery of $500 to $20,000, "depending upon the

degree of culpability and the actual damages sustained"^^ and that, given this
statutory limit on the recovery, it would be inconsistent to with the Indiana

Supreme Court's conclusion inFra/w/7/o« that awrongfully discharged employee
is entitled to be "fully compensated."^^ Accordingly, it stated that had the

legislature

intended to place matters of retaliatory discharge within the Board's

exclusive jurisdiction and thereby eliminate the availability of a

comprehensive remedy in a separate civil action, it would have

specifically done so in express terms and not by making a generalized

reference to intentional torts which, if proven, are compensable only by

a limited award.^*

The court did, however, hold that defamation was, per se, an "independent
tort" within the meaning of the bad faith provision.^^ Nonetheless, the court

remanded the case for further analysis as to whether the defamation occurred

during the "adjusting and settling" process.^^ Put simply, the court stated that if

Samm's claim was denied because it was not work-related and it was fraudulent,
then the defamation would seem to have occurred concurrently with the adjusting

and settling of a claim so as to bring the action within the jurisdiction of the

Worker's Compensation Board.^* On the other hand, if Samm's claim was

62. See id. at 424.

63. Seeid.7iXA25.

64. See^Frampton v. Central Ind. Gas Co., 297 N.E.2d 425 (Ind. 1973).

65. Samm, 715 N.E.2d at 426.

66. Id. (quoting Frampton, 297 N.E.2d at 428).

67. Id

68. Id. (footnote omitted).

69. Id at 427.

70. Id

71. See id.



1 634 INDIANA LAW REVIEW [Vol. 33 : 1 625

denied because it was not work-related, and he was subsequently terminated for
fraudulently submitting a claim, then the defamation would seem to have
occurred separately and independently from the employer's procedure for
adjusting and settling a claim so as to remove it from the jurisdiction of the
Worker's Compensation Board/^

III. Choking Determined a "Personal Risk"

In Indiana Michigan Power Co. v. Roush^ Ralph Roush had a history of
eating his food without chewing and, during his employment, choked on a
sandwich that had been made available after the conclusion of a meeting.^"^
Efforts to perform the Heimlich maneuver were unsuccessful and Roush was
taken to the hospital. Roush subsequently died as a result of the choking
incident, and a worker's compensation claim was brought by his widow.^^

The Worker's Compensation Board found that the employee's death was
compensable; however, the court ofappeals reversed their decision.^^ The court
re-iterated the general rule that risks causing injury or death to an employee can

be divided into three categories: "(1) risks distinctly associated with the

employment; (2) risks personal to the claimant; and (3) 'neutral' risks which have

no particular employment or personal character."^^ Risks falling into the first and
third category are covered under the Indiana Worker's Compensation Act but

risks falling into the second category are not.^* The court of appeals
acknowledged that personal activities undertaken at work for the employee's
comfort and convenience have been held to be compensable in the past,^^ but, if

an injury occurs there must be some causal connection to the employment.^^ The
court ofappeals held that placing large amounts offood into Roush's mouth and
attempting to swallow it whole was a personal risk and that "[n]othing about
Roush's employment increased his risk ofchoking or was causally connected to

72. See id.

73. 706 N.E.2d 1110 (Ind. Ct. App.), trans, denied 726 N.E.2d 309 (Ind. Oct. 21, 1999)

(mem.).

74. See id.

75. Seeidoann.
76. See id

11. /£/. at 1 1 14 (quoting Four Star Fabricators, Inc. v. Barrett, 638 N.E.2d 792, 794 (Ind. Ct.

App. 1994)).

78. See id.

79. See id. The court cites, as examples, Vendome Hotel Inc. v. Gibson, 105 N.E.2d 906,

910 (Ind. Ct. App. 1952)(accident in which employee*s fingers were severed when employee

reached into employer's icemaker to get ice for personal consumption held arising out ofand in the

course ofemployment) and Prater v. Indiana Briquetting Corp., 251 N.E.2d 810, 813 (Ind. 1969)

(accident in which employee was killed when struck by a train while employee was traveling to

nearby business establish to purchase soft drinks held arising out of and in the course of

employment).

80. See Roush, 706 N.E.2d at 1 1 1 5.



2000] WORKER'S COMPENSATION 1635

it."'^

IV. No Medical Documentation Necessary

It has been a longstanding practice in worker's compensation that an

employee provide medical documentation that he or she is unable to perform his

or her regular work duties. In a clear departure from this practice, the court of
appeals in Tanglewood Terrace v. Lon^^ held that an employee can offer lay
testimony regarding his or inability to work and that medical documentation of
disability is not required in Indiana.

In Tanglewood, the injured employee, Sonya Long, alleged two distinct
injuries. The first occurred when the employee twisted her body in an effort to
answer the telephone while sitting at her desk and the second injury occurred

when Ms. Long was pulled down while she was assisting a resident in the
Tanglewood nursing home.*^ The single hearing member, as well as the full
Board, found in favor of Long and awarded temporary total disability benefits,
permanent partial impairment, and appropriate medical care.^"* The pertinent

issue on appeal was the hearing member's determination that Long was entitled
to temporary total disability benefits given the absence of any medical

documentation to support her claim.*^ The court ofappeals noted that, although
a practice amongst worker's compensation litigators, there was no Indiana case
law or statutory authority mandating that an employee establish an inability to
temporarily perform his or her job duties by medical evidence.*^ It stated,

"compensation boards may rely to a considerable extent on their own knowledge
and experience in uncomplicated medical matters, and in such cases awards may
be upheld without medical testimony or even in defiance of the only medical

testimony."*^

From a practical standpoint, as an employer, it might be prudent in borderline
cases to have an injured employee evaluated by the company doctor, or other
physician with regard to the ability to work. While, at first glance, this might

appear to place the burden of proof upon the employer, it would seem that if an
employee is able to offer lay testimony that the employer might likely need a
medical evaluation to dispute his or her claim even though the employee retains
no expert.

V. INTENTIONAL ACTS

81. Id.

82. 715^ N.E.2d 410 (Ind. Ct App.), trans, denied, 726 N.E.2d 316 (Ind. Dec. 28, 1999)
(mem.).

83. SeeiddXAU.

84. See id 2X AM.
85. Seeid^iAU.

86. SeeiddXAXA.

87. Id. (quoting 7 ARTHUR LARSON & LEX K. LARSON, The Law OF Worker's
Compensation § 79, at 15-426.32(66) (1952)).



1636 INDIANA LAW REVIEW [Vol. 33: 1625

This survey period, the Indiana Supreme Court, in two companion cases,
Tippmann v. Hensler^^ and Wine-Settergren v. Lamey,^^ discussed whether a civil
suit could be maintained by an injured employee against a co-employee for his
or her alleged "intentional acts."

A. Tippmann v. Hensler

In Tippmann^ Dennis Tippmann and Brian Hensler were co-employees of
Tippmann Pneumatics, Inc. Hensler was employed as a paintball gun assembler
while Tippmann worked in the service department repairing paintball guns.^
During a scheduled break, Tippmann began "playing around" by aiming a
paintball gun at Hensler that Tippmann hadjust serviced and inquiring, "[wjhere
do you want me to shoot you at?"^' Hensler responded by leaving the room and
returning with another paintball gun. The two then began conversing and were
no longer pointing the paintball guns at each other.^^

The other employees in the break room began shooting paintball guns dovm
the length ofthe room at a designated testing area "just for fiin" and, eventually,
Hensler joined in this activity.^^ Tippmann angrily told the employee to quit
firing due to the "mess" left behind by the discharged paint. In defiance, Hensler

"dry fired" his gun at the ceiling.^"* Tippmann then loaded his paintball gun and
told Hensler he was going to shoot him. Hensler left the room and after he had
left Tippmann fired at the exit door to make a loud sound and "scare" Hensler.
Unfortunately, Hensler unexpectedly returned, and, upon re-entering the room,
Hensler was struck with the paintball in the left eye causing severe and
permanent damage.'^

Hensler filed a worker's compensation claim against the employer that was
ultimately settled by agreement. He then filed a claim in civil court against
Tippmann alleging that Tippmann's negligence caused the injury or, in the
alternative, that Tippmann intentionally caused the injury.^ Tippmann moved
for summary judgment arguing that the exclusive remedy provision of the
Worker's Compensation Act^^ barred Hensler' s claim.

The trial court denied Tippmann's motion, and, on interlocutory appeal, the
court of appeals reviewed the case and remanded for a factual determination of
whether Hensler was an active participant in the horseplay.'* Before further

88. 716 N.E.2d 372 (Ind. 1 999).

89. 716 N.E.2d 381 (Ind. 1999).

90. See Tippmann, 1 1 6 N.E.2d at 373.

91. Id.

92. See id.

93. Id

94. Id at 374.

95. See id.

96. See id.

97. See iND. CODE § 22-3-2-6 ( 1 998).

98. See Tippmann v. Hensler, 654 N.E.2d 821, 826 (Ind. Ct. App. 1995), vacated, 716



2000] WORKER'S COMPENSATION 1637

findings could be made, the Indiana Supreme Court granted transfer.

The Act provides an exclusive remedy against an employer for accidental
injuries that arise out of and in the course of the injured employee's

employment.^ This immunity extends to suits against those '"in the same
employ[ment]' as the injured worker when the injury occurred."'^ Thus, the
Indiana Supreme Court noted that Hensler could maintain a civil action against
Tippmann if it could be shown that either (1) the injury was not accidental or did
not arise out of and in the course of the employment; or (2) that Hensler and

Tippmann were not in the "same employment" at the time of the injury.
'°'

The court undertook an analysis of prior Indiana opinions addressing the

issue. It began by reviewing Evans v. Yankeetown Dock Corp.,^^^ wherein the
court concluded that an injury "by accident" meant "accidental injury" and not

"injury caused by an accident."'"^ Given that interpretation, the Indiana Supreme
Court had previously adopted the following test for determining when an
accidental injury occurred: whether the sufferer intended or expected that injury

would, on a particular occasion, result from what he was doing. '^ Then, in
Baker v. Westinghouse Electric Corp. , '°^ the Indiana Supreme Court modified the
test to also consider the employer's intentions and expectations stating,

"[b]ecause we believe an injury occurs *by accident' only when it is intended by
neither the employee nor employer, the intentional torts of an employer are
necessarily beyond the pale of the act."'^

Tippmann argued that according to Baker, his intention was irrelevant as the
only intent that mattered was that of the injured employee and the employer.

'^^

The Indiana Supreme Court rejected Tippmann 's argument and, instead,
extended the Baker rule to encompass co-employees. '°^ The proper inquiry,

stated the court, was "'[d]id the party who is advocating the applicability of the
Act intend for harm to result from the actions that party undertook?' If so, then

the injury did not occur 'by accident' for that particular litigant."'^ Applying this

test to the particular facts at hand, the Indiana Supreme Court held that Tippmann
had the intent to cause injury to Hensler and, therefore, the injuries were not "by

accident."^
'°

Tippmann definitely broadens the area of a civil litigation against co-

N.E.2d 372 (Ind. Sept. 22, 1999).

99. See iND. CODE § 22-3-2-6.

100. Tippmann, 716 N.E.2d at 375 (quoting iND. CODE § 22-3-2-6).

101. Id. (citations omitted).

102. 491 N.E.2d 969 (Ind. 1986).

103. Tippman, 716 N.E.2d at 375 (citing Evans, 491 N.E.2d at 974).

104. See id.

105. 637 N.E.2d 1271 (Ind. 1994).

106. Id at 1273.

1 07. See Tippmann, 7 1 6 N.E.2d at 375.

108. See id. 2Li'il6.

109. Id

110. /f/. at 381.



1638 INDIANA LAW REVIEW [Vol. 33:1625

employees. While Tippmann purports to set forth rules for determining third-
party tortfeasor liability, it also leaves much room for subjective interpretation
of the facts. This decision, however, standing alone would not appear contrary
to the intent of the Act to hold tortfeasors liable for their actions while still
insulating employers behind the exclusive remedy provisions of the Act.

B. Wine-Settergren v. Lamey^^^

Robert Lamey and his co-employee, Cindy Wine-Settergren, were both
working for a radio station."^ Lamey worked as sports director and Wine-
Settergren as a morning radio personality and news director. Wine-Settergren had
recently returned to work following nose surgery and, as a consequence, her nose
was particularly sensitive."^ During a break, Lamey shouted loudly down the
hall and, as a result, startled Wine-Settergren who exclaimed, "Oh, my God,
Bob." Lamey, apologized for startling her and embraced her in a strong hug. As
he hugged her, he pulled her head into his collarbone re-injuring her nose.'^'*
Wine-Settergren never filed a worker's compensation claim but, instead, filed a

civil suit seeking permanent pain and suffering, loss of her senses of taste and

smell, the need for cosmetic surgeries and lost wages associated with the
surgeries. Lamey moved the court for a dismissal and, accordingly, the trial court
dismissed the suit holding that the exclusivity provision of the Act precluded

Wine-Settergren civil suit.

Applying the test enumerated in Tippmann, the Indiana Supreme Court
concluded that Wine-Settergren's injuries were not intentionally caused and,

therefore, went on to consider whether Lamey and Wine-Settergren were in the
"same employment."' ^^ The Indiana Supreme Court noted that there were two

lines ofcourt ofappeals cases discussing this concept."^ The first line ofcases,
most notably, Martin v. Powell^^^and Seiler v. Grow,*** focus upon "whether the

accidental injury arose 'in the course of [the tortfeasor employee's]

employment.'""^ Thus, under this line ofcases, application ofthe phrase "in the

same employ[ment]" includes an analysis of the co-employee's injury causing
actions to determine whether they were causally related to his employment.

*^°

Under this approach, non-job related action, for example, horseplay or sexual
harassment, have been determined not to have a causal connection to the co-

111. 716N.E.2d381(Ind. 1999).

112. See id. at 383.

113. See id.

114. See id.

115. Id at 384.

116. See id

117. Ml N.E.2d 943 (Ind. Ct. App. 1985).
118. 507 N.E.2d 628 (Ind. Ct. App. 1987).

119. Lamey, 716 N.E.2d at 384 (quoting Seiler, 507 N.E.2d at 631; Martin, All N.E.2d at

945)).

120. idzans.



2000] WORKER'S COMPENSATION 1639

employee's employment, thus, rendering the co-employee "not in the same
employ[ment]" and vulnerable to civil suitJ^'

The other line of cases, exemplified best by Weldy v. Kline^^^^ disapproved
with the analysis in Martin and Seiler and, instead, stated that the court should

not concern itselfwith action ofthe co-employee but, rather, the co-employee is

in the same employment if he "could obtain compensation benefits [under] the
same or similar circumstances" as the injured employee. '^^ The Weldy test
essentially asks whether the defendant, had he received rather than caused the

injury, would have been able to recover similar benefits from the plaintiffs

employer.'^*

The Indiana Supreme Court rejected the position taken in Weldy stating, "we
cannot think of an instance where the defendant would be subject to [civil] suit
under this test ifhe and the plaintiffwere also co-employees."'^^ In a thoughtful

opinion considering precedent, legislative intent, and policy concerns, the court

affirmed its "prior approval ofthe Martin standard for use in determining when
a co-employee tortfeasor is 'in the same employ[ment].'"'^^

In determining whether Lamey's actions were in the course ofemployment,

the court noted that "in the course ofthe employment" refers to the time, place,

and circumstances under which the accident occurs. *^^ Certainly, the injury

occurred during working hours in a vending machine area located upon the
employer's premises and, thus, the first two prongs were clearly satisfied. ^^^

With respect to the "circumstances" under which the accident occurred, the
Indiana Supreme Court reasoned that maintaining a congenial work environment
where employees get along with each other is desired by both employees and
employers and that Lamey's embracing hug and consolation ofWine-Settergren
was an action reasonably expected between employees. '^^ Accordingly, Lamey ' s
actions were concluded to be in the course of his employment, thus preventing

Wine-Settergren' s civil action.
"°

What the supreme court does not answer, however, is: When does congenial
behavior cross the line into something more? When does a concerned hug
become sexual harassment? How does an employer advise a supervisor who is
too "warm and fuzzy"? These are the types of questions that will no doubt be
raised in future litigation.

121. Id

122. 616 N.E.2d 398 (Ind. Ct. App. 1993).

123. La(ney, 716 N.E.2d at 385 (quoting Weldy, 616 N.E.2d at 403).

124. See id.

125. Id

126. A/, at 386.

1 27. Id. at 390 (citations omitted).

128. See id

129. See id

130. See id.



1640 INDIANA LAW REVIEW [Vol. 33:1625

VI. Legislative Amendments

Finally, the Indiana General Assembly passed a few notable amendments to
the existing Worker's Compensation Act including: mandatory electronic
reporting, school to work students, doubling ofPPI for some partial amputations,
and changes to the second injury fund.

A. Mandatory Electronic Reporting

Indiana Code section 22-3-4-13 was amended to require that all insurance
carriers, self-insurers, and third party administrators responsible for submitting

a First Report of Injury do so using electronic data interchange standards
prescribed by the Board. '^* Previously, it was permissible to submit such reports
via United States mail, however, this amendment mandates compliance with the
electronic format by June 30, 1999.^^^ If an entity cannot comply with the
electronic filing rule by the June 30, 1999 deadline, then an implementation plan

must be approved by the Board no later than June 30, 2000, which provides for
electronic reporting of the First Reports of Injury no later than December 3 1

,

2000.^''

B. School to Work Students

A student participating in on-the-job-training under the federal School to
Work Opportunities Act*^* will be known as a "school to work student" and, to
the extent he or she suffers an otherwise compensable injury, he or she will be

entitled to medical benefits, PPI benefits, death benefits in a lump sum of
$175,000, and burial expenses. ^^* A school to work student is not entitled to
temporary total disability benefits or temporary partial disability benefits.

^^^

Further, should the school to work student seek to modify the award under

Indiana Code section 22-3-3-27, the school to work student's average weekly
wage is presumed to be equal to the federal minimum wage.'^^

C Partial Amputations
The Indiana Worker's Compensation Act provides scheduled impairments

for certain losses, for example, total and partial amputations.'^^ For injuries

occurring after July 1 , 1999, a PPI rating associated with the partial amputation

of the fingers or toes, enucleation of an eye, or loss of a testicle shall be

131. See IND. Code § 22-3-4-13(b)(l) (1998).
132. See id

133. 5'eg/V/.§ 22-3-4- 13(b)(2).

134. See 20 U.S.C. §§ 6101-6104 (1994).

135. IND. CODE §§ 22-3-2-2.5, 22-3-7-2.5.

136. See id § 22-3-2-2.5(d)(l)-(2).

137. See id ^22'3-2-2.5(c).

138. See generally id. § 22-3-3-10.



2000] WORKER'S COMPENSATION 1 64

1

doubled.'^^ This has been the case with total amputations since 1997, thus, this

provision merely enhances the recovery available for partial amputations.

D. Second Injury Fund

The Worker's Compensation Board is now required to enter into a contract
with an actuary or other qualified firm in order to calculate a recommended
funding level for the second injury fundJ'*^ If the fiind has a credit balance of

less than $1 million as ofOctober 1 ofany given year, then the Board must notify
insurance carriers, other entities or self-insurers by October 1 that an assessment

is necessary.'"*' The assessment may not exceed 1.5% of temporary total
disability, temporary partial disability, permanent partial impairment, permanent

total disability and death benefits paid in the calendar year preceding the

assessment due date and must be paid within thirty days of the assessment

notice.'"*^ For insured employers, the assessment must be collected through a
surcharge based upon the employer's premium and must be shown as a separate
amount on the premium statement.

'"^^

Conclusion

As stated previously, the Worker's Compensation Act forms a compromise
between employees and employers by providing benefits to an injured worker

while, at the same time, protecting the employer from conventional tort liability.

Certainly, as the times change, the courts will continue to be faced with new and
distinct issues necessitating an interpretation of the Act. Several important

opinions have been decided during the current survey year and practitioners look

forward with interest to what the next survey period will bring.

139. ^ee/V/. §22-3-3-10(c)(2).

140. See id. §22-3-3-13.

141. 5ge/V/. §22-3-3-13(c)(2).

142. See id

143. See id § 22-3-3-1 3(e).



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