Disease claim against Second Injury Fund approved despite change in law

The Missouri Court of Appeals Eastern District ruled Oct. 1 that a man partially disabled by an occupational disease still could bring a claim against the state’s Second Injury Fund even after lawmakers said such claims no longer could be filed.

Although the Eastern District’s case makes the fund liable for claimant Bruce Krysl’s claim, it’s unlikely that at this point, nearly six years after the Second Injury Fund was overhauled, many other cases exist that could take advantage of the ruling.

“I can’t see too many in 2019 that it affects,” said his attorney, Thomas J. Gregory of Mogab & Hughes.

Krysl, a sculptor, had worked since 1994 for Veiled Prophets of St. Louis, where he carved large characters for parade floats. In 2013, he was diagnosed with severe carpal tunnel syndrome related to his work.

After settling his primary injury claim against his employer, Krysl made a claim of permanent partial disability, or PPD, against the Second Injury Fund, a state program that covers claims by workers whose preexisting conditions are made worse by an on-the-job injury. In addition to his carpal tunnel, Krysl suffered from complications from diabetes.

An administrative law judge approved about $10,000 in PPD benefits, but the Labor and Industrial Relations Commission reversed the award. Although the parties had stipulated that the injury had occurred on Jan. 1, 2013, Krysl’s case wasn’t filed until 2016, well after the restrictions to the fund took effect.

The 2014 law change was enacted to keep the Second Injury Fund solvent. The fund’s money comes from a surcharge on the workers’ compensation insurance premiums that businesses pay. In 2005, the legislature had capped the surcharge at 3 percent, causing a shortfall that forced the state to delay payment of awards to thousands of people. As of Jan. 1, 2014, the surcharge was temporarily doubled, but new claims for PPD were barred.

The revised law restricts all claims for “injuries occurring after the effective date” of the law, as well as all claims “involving a subsequent compensable injury which is an occupational disease filed after the effective date.”

The labor commission found that the restriction on PPD claims for occupational disease deliberately was tied to the date of filing. But Judge Lisa Page, writing for the Eastern District, said the legislature “simply, if less than artfully,” intended to include injuries that occurred prior to 2014 while prohibiting those occurring later. Because occupational diseases accrue over time, she said, such an injury could result in a claim that could be filed only after the new law went into effect.

Judge Philip M. Hess concurred. Judge Kurt S. Odenwald also agreed, but he wrote separately to note that the statute also could be read the opposite way.

“The language of Section 287.220 leaves this Court with a dilemma — which rule of statutory construction to follow.”

Both opinions noted, however, that the interpretation applies only to a narrow group of claimants — those whose occupational disease disabilities occurred before the law change but were filed after it. Odenwald wrote that the ruling “will have minimal impact on Fund liability.”

The ruling marks the second time this year the state’s appellate courts have explored the 2014 changes to the Second Injury Fund. In June, the Missouri Supreme Court upheld the legislature’s restrictions on the fund and denied the claim of a man who was injured at work shortly after the law changed, even though his preexisting injuries occurred earlier. In a footnote, Page said the Supreme Court’s ruling in Cosby v. Treasurer of Missouri supports the Eastern District’s interpretation because it “focused solely upon the date of the injury.”

A spokesman for the attorney general’s office, which defended the fund, didn’t respond to a request for comment. In a brief, Madalyn J. Campbell, an assistant attorney general, argued that such a reading of the statute “would expand the Fund’s liability, not retract it.”

The brief did not estimate how much such an expansion of liability might cost. So far, the Second Injury Fund appears to be in far better shape than in past years. According to the fund’s 2018 annual report, released early this year, the additional 3 percent surcharge has brought in more than $100 million per year. In the final months of 2018, the fund began paying medical benefits to more recipients. Such benefits were among the lowest-priority items scheduled for payment under the 2014 law.

The changes, however, clearly have affected workers’ compensation practitioners and their clients. Gregory said he would have handled a case like Krysl’s differently today. Rather than settling with the employer and filing a separate claim against the fund, Gregory said he now would bring both cases before the Division of Workers’ Compensation — a process he acknowledged puts a greater burden and potentially more liability on the employer.

“I don’t feel comfortable settling those cases piecemeal,” he said. “I’m going to try those cases.”

The case is Krysl v. Treasurer of Missouri, ED107591.