Court awards $12 million in workers' comp case
In 1999, Alice Torres, a cook at Meadowbrook Manor nursing home in Rapid City, filed a workers' compensation claim for carpal tunnel syndrome. She had sought about $8,000 for medical bills, lost time and physical impairment. But insurance adjusters denied the claim.
Defendants in the case were Travelers Insurance Co., Insurance Company of the State of Pennsylvania, and Constitution State Services, a subsidiary of Travelers. All were involved as claims administrators or insurers for Beverly Enterprises, parent company of Meadowbrook Manor.
Initially, Beverly Enterprises was also a defendant, but the company reached an out-of-court settlement and was dismissed from the suit.
The suit was originally filed in U.S. District Court in Rapid City in July 2001. Torres' attorneys focused on a Travelers Insurance incentive program that offered bonuses to claims workers who lowered payouts on claims. Called the Claim Professional Incentive Program, it offered workers end-of-year bonuses of as much as 20 percent of their pay if they reduced overall payouts from one year to the next.
Torres' attorneys argued that this created an improper conflict of interest for claims adjusters, who are supposed to be motivated by fairness to claimants, not cost control for insurance companies.
In court papers, the insurance companies said Torres' workers' compensation claim was properly denied because there was a lack of proof that her hand problems were caused by her work. According to court papers, Torres reported to Meadowbrook Manor administrators in March 1998 that she was having pain, numbness and other symptoms in her hand. She underwent a series of medical treatments. At one point, she took three weeks off from work.
In April 1999, Torres underwent surgery for carpal tunnel syndrome. Her doctor sent a workers' compensation report to Meadowbrook Manor, asserting that her work "aggravates and makes her carpal tunnel syndrome clinically significant so that it interferes with her activity and function."
But defense attorneys noted that there were a number of inconsistencies in Torres' accounts of what caused her pain, how long it had been bothering her or whether it was caused by repetitive stress or a specific injury from lifting a pot of soup.
The insurance companies also said her hand problems were likely the result of a 1998 home injury, not her work in the kitchen of the nursing home. Torres sought medical treatment for that injury but, at that time, did not mention numbness or tingling in her fingers, the attorneys noted. And tests in December of that year, the defense contended, did not show carpal tunnel syndrome.
Despite the award, the case is far from over. Federal courts must review jury verdicts involving punitive damages, and judges may reduce or eliminate the awards. And no matter what happens, Torres will not keep the entire $12.06 million. Attorney fees in this case equal 45 percent of the award, according to the article.