WC Case Law Update: Attorneys’ Fees
Reminder About Attorneys’ Fees
Allan Campbell suffered two workplace injuries on December 2011 and July 2012 while working for Garda USA, Inc. The first injury was a left ankle injury and was paid on a medical only basis pursuant to a Form 63. The second injury was a low back injury that was fully denied. During discovery, Mr. Campbell’s attorneys requested production of any written documents regarding the denied November 2012 low back injury, including any statements from Garda employees. Garda first objected and then replied that it did not possess any such documents. During a deposition, a Garda risk management employee indicated that a written document existed and that he had a copy on his computer. Garda’s attorneys instructed the employee to stop talking and to power down his computer. After the deposition, Garda continued to refuse to produce the document. After Mr. Campbell’s attorneys filed a motion to compel production of this document and the Deputy Commissioner granted the motion, Garda produced the document. The Industrial Commission imposed attorneys’ fees on Garda under N.C.G.S. § 97-88.1 for unfounded litigiousness.
In Campbell v. Garda USA, Inc., the Court of Appeals vacated and remanded in part. The Court agreed that some of the grounds on which the Commission awarded attorneys’ fees were in error. The Court affirmed that the award of attorneys’ fees was proper for Garda falsely stating in its discovery responses that it did not have a statement or information regarding the July 2012 back injury given that a document did in fact exist and Garda refused to produce it. The Court, however, vacated the attorneys’ fees awarded for failure to contest the claim within 90 days after filing the Form 63. The Court confirmed that the 90-day requirement for either accepting or denying does not apply to medical only claims. The Court also vacated the attorneys’ fees awarded for a notice defense that was never raised by Garda.
Risk Handling Hints: The decision in Campbell provides two reminders. First, the requirement to either accept or deny the claim within 90 days of notice after filing a Form 63 does not apply to claims paid on a medical only basis. Second, discoverable evidence to which there is not a valid objection should be produced at some point during litigation without having to involve the Commission. If there are no good grounds for objecting to the production of this evidence, and the Commission has to step in to compel production, there is a risk that attorneys’ fees will be awarded. Employers and carriers should be careful to discuss with their attorneys what documents are in existence and whether these documents are discoverable in order to be sure they are in compliance with the applicable discovery rules.