Thursday, August 24, 2017

Notice is Notice

Workers' Compensation was recently interpreted by the North Dakota Supreme Court in Zerr v. North Dakota Workforce Safety and Ins., case No. 20160314. This blog has focused before on the concepts of "notice" and the "opportunity to be heard," each hallmarks of the constitutional protections of due process. 

In Zerr, the North Dakota Supreme Court was asked by an injured worker to intervene in his case, and to reverse a lower court decision that dismissed his lawsuit. The trial court had concluded that it lacked authority, or "jurisdiction," to hear the worker's claims. Jurisdiction may be conferred by statute, or may be part of a court's "inherent authority" as discussed recently in Conferring Jurisdiction. In this instance, the trial court concluded that it lacked jurisdiction under a statute, because the injured worker "
did not exhaust his statutory administrative remedies." 

The facts of the case are serious. Mr. Zerr was "
severely burned in an explosion and fire at an oil well." His workers' compensation claim was accepted and benefits were provided. Later, the employer/carrier sent him a notice to inform him that they would soon discontinue his workers' compensation; they alleged that Zerr "was noncompliant with vocational services." 

The workers' compensation community seems to love abbreviations for nearly everything. This Notice Of Intent to Discontinue is commonly referred to in North Dakota as a "NOID." Some readers will remember when "the Noid" was an advertising character for a pizza chain, and "avoid the Noid" as a recurrent slogan. That sentiment might be pertinent with the North Dakota NOID as well, something that should be avoided by injured workers when possible. 

That NOID was informational for the worker. It said his benefits would be discontinued, but "also provided specific steps for him to become compliant with vocational services."  A worker receiving a NOID would be informed that the intent could be challenged by writing "to his claims adjuster within thirty days." The failure to challenge the NOID, would result in the discontinuation becoming final. In short, the NOID is a warning of serious consequences, but provides substantive information on avoiding them. 

Mr. Zerr received the NOID, but "he alleged he did not immediately open the letter or otherwise respond until more than thirty days after." He later hired an attorney, who sent a letter explaining the workers' status. He described a diagnosis of "post traumatic stress disorder ("PTSD") and depression," and explained that the worker therefore avoided "opening his mail and communicating with others as it causes flashbacks of the explosion." More than likely, even without PTSD, most people would probably like to avoid being reminded of a traumatic event in their lives.

Based upon this explanation, Mr. Zerr asked that his case be reopened and that his benefits be reinstated. Alternatively, the attorney asked that the worker be granted a do-over, that is, would the carrier issue a new NOID and therefore restart the 30 day clock for Mr. Zerr to file an appeal?  These efforts or requests were in the workers' compensation adjudication process. The carrier declined to do either. It contended that upon the passage of 30 days, the discontinuation was final.

That led Mr. Zerr to sue the carrier in civil court. He alleged that his failure to respond to the NOID was "due to his mental condition" and that his behavior was thus "directly related to his work injuries." Mr. Zerr alleged that his workers' compensation benefits were "a property right protected by due process," and that his constitutional right to due process was violated by not allowing him "additional time" to appeal the NOID. 

The trial court dismissed the complaint. It concluded "as a matter of law" that appropriate notice (the NOID) had been provided and that Mr. Zerr's election not to open his mail or to respond was his own decision. By not timely challenging the NOID, Mr. Zerr had "not exhausted administrative remedies," and therefore could not proceed with a civil lawsuit. On appeal, Mr. Zerr contended that the trial court was wrong, that he did not have to respond to the NOID, and that his civil suit was meritorious both substantively and procedurally. 

The Supreme Court explained the obligation to pursue the administrative remedies (appeal the NOID), and the state's decisions in favor of that requirement. It explained the authority of the administrative agency to hear and determine such an appeal. And, the Court noted that state statute provides that "[t]here is no appeal from an organization decision not to reopen a claim after an order on the claim has become final."

The Court agreed that in North Dakota workers' compensation benefits are a "property right protected by the due process clauses of the federal and state constitutions." And, therefore process is due when those benefits are changed. But, the Court said the NOID was notice that satisfied this requirement. 

That is when Mr. Zerr's argument gets interesting. He contended that he did not receive "actual notice" until he elected to open the envelope and read the NOID. He contended that because of his medical condition, he had good reason not to read the NOID, and that his avoidance should excuse the deadline. But, in North Dakota, the phrase "actual notice" is defined by statute. The Court discussed the meaning, and concluded that delivery of the NOID was "actual notice," despite Mr. Zerr's decision to ignore it. 

The outcome is likely seen by some as unfair or unfortunate. The law, however, provides for deadlines, processes and procedures. When those are ignored, there can be significant and lasting effects. In this case, the injured workers' benefits ended. 

It is important to remember that there are both "benefits" and "burdens" for all involved in workers' compensation. The employer receives the "benefit" of exclusive remedy in exchange for the "burden" of providing workers' compensation benefits. The employee receives the "benefit" of rapid and predictable disability payments in exchange for the "burden" of giving up that right to sue the employer. These are but examples, and the system is replete with similarly corresponding (one side's burden is the other side's benefit) obligations. 

But, there are also procedures to be followed. When employer/carriers do not fulfill obligations or requirements, that can result in negative consequences. It is no different for the injured worker, whose behavior (not opening and reading mail) can likewise have consequences. The Zerr case is a reminder of the potential for effects from action or inaction, and is perhaps an important cautionary tale for anyone involved in a workers' compensation case. 

Reading the case reminded me of time I spent practicing medical malpractice ("MedMal"). In Florida MedMal, there is a statutory requirement for pre-suit notice. The statute specifically requires notice of an intent to sue, served by certified mail. The Florida Supreme Court was asked to interpret that statute in Patry v. Capps, 633 So.2d 9 (Fla. 1994). There, the plaintiff delivered the pre-suit notice by hand, and the doctor admitted receiving it. But, the doctor claimed it was not legally effective because the statute was not complied with. 

The Florida Supreme Court held that the hand-delivered notice was legally sufficient. It held that "strict compliance with the mode of service provided in the statute is in no way essential." In effect, it concluded that notice is notice, a result not dissimilar to the outcome in Zerr. Notice is notice. 

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