NCCI Court Case Update: Maryland and North Carolina

Maryland, Attorney Fees

On January 31, 2024, the Appellate Court of Maryland, In the Matter of Zukowski, held as a matter of first impression that a workers compensation (WC) attorney fees lien attaches to a claimant’s WC benefits award after the application of statutory offsets.

In this case, two claimants who worked as police officers received service-connected disability retirement benefits due to work-related injuries. Those benefits, according to Maryland statute 9-610, are offset from WC benefits that were also awarded to the claimants. The attorneys representing the claimants sought attorney fees calculated from the entire WC award before application of the statutory offset of the disability benefits. The court, in its analysis, reviewed Maryland regulation 14.09.03 that was in effect at the time of the proceedings, which stated that attorney fees may be approved based on the amount due for an award of compensation. The court also looked to prior cases that found an initial compensation award, before applying the statutory offset, does not constitute an award out of which a lien for counsel fees could be satisfied. Thus, the court concluded, attorney fees are to be calculated from the actual amount due to a claimant after applying the statutory offset.

North Carolina, Compensability for Medical Treatment

On March 22, 2024, the Supreme Court of North Carolina, in Kluttz-Ellison v. Noah’s Playloft Preschool, for the first time, expressly adopted the “directly related” test for determining whether medical treatment can be compensable. Under the test, an employee may receive compensation for medical treatment only if the treatment is directly related to the workplace injury, meaning there is a sufficiently strong causal relationship between the condition that requires treatment and the workplace injury.

After a workplace accident, a workers compensation claimant required knee surgery. The treating physicians also recommended the claimant undergo weight loss surgery so that the knee surgery could be safely performed. In determining whether the weight loss surgery was compensable, the state’s supreme court endorsed and adopted the “directly related” test, which has been relied upon in the past by the Court of Appeals for determining compensability of medical treatment. Under this test, a causal relationship exists if one of three factors are met: (1) the workplace injury caused the condition, (2) the workplace injury materially impacts the condition by aggregating it or causing new symptoms, or (3) the condition did not require medical treatment or intervention before the workplace injury but now requires treatment solely to remedy the workplace injury.

The court then reversed lower courts’ decisions reasoning that the Industrial Commission and the Court of Appeals erred in their application of the test, as they focused on whether the treatment (weight loss surgery) was “directly related” to the original compensable injury rather than focusing on the medical condition.

For more information on other cases monitored by NCCI's Legal Division, visit previous Court Case Updates and Court Case Insights under the Legal section of INSIGHTS on ncci.com.

Share This Article: