By Ertel Berry

An Asheville hospital that ordered surveillance of a comp claimant has been fined $5,000 for not disclosing favorable video footage to the plaintiff's attorney. The omitted tape showed a nurse, who had suffered compensable arm and neck problems, sitting in her car after a failed attempt to go back to work. The plaintiff was crying and grimacing in pain, and guarding her injured arm. The tape, which would have helped corroborate the plaintiff's claim for continuing temporary total disability benefits, was not turned over until the plaintiff's attorney discovered the missing footage — months after the comp hearing. Despite the new evidence, a deputy denied the plaintiff's request for continuing compensation and refused to sanction the defendant. The deputy cited, among other things, tapes of other days that appeared to show the plaintiff was able to return to work but chose not to do so. The full commission disagreed and reversed in a 2-1 opinion, Chellis v. Mission St. Joseph's Health System (North Carolina Lawyers Weekly No. 05-08-0388, 9 pages). The commission granted the plaintiff's benefits request, saying the defendant "unreasonably defended this matter based on stubborn, unfounded litigiousness." That finding entitled the plaintiff to attorney's fees for bringing the claim. The defendant was also hit under Rule 802 with a $5,000 sanction, payable to the commission, "for failing to timely disclose the … surveillance videotape." The defendant "knew about the … videotape and failed to make it available to the plaintiff and her attorney in a timely manner even upon proper request." That conduct showed bad faith, the commission said. Commissioner Pamela Young wrote the majority opinion, with Laura Mavretic concurring. Commission chair Buck Lattimore dissented. The plaintiff's attorney, Henry E. Teich of Asheville, said he sees video surveillance in a lot of comp claims. "It's a fact of life in workers' compensation," he said. But holding back favorable footage prejudiced his client's claim, according to Teich. "They did all this surveillance ostensibly to see how this lady was doing when she didn't expect people to be watching her," he said — then failed to turn over video that bolstered the plaintiff's credibility.

Pattern

According to Teich, the hospital employer in Chellis has been ordered by deputies or the full commission to pay attorney's fees for unreasonably defending comp claims in four previous decisions dating back to 2002. An inspection of opinions posted on the commission's website shows four cases awarding attorney's fees against the defendant. One case has been appealed to the Court of Appeals, according to Teich. In a 2004 decision, Hill v. Mission St. Joseph's Health System, Deputy Commissioner Kim Ledford granted fees for a claimant and added an unusual comment: "As pointed out in the contentions of plaintiff's counsel, this defendant-employer has been subject to sanctions by three other deputy commissioners based upon unfounded litigiousness. "Although not 'evidence' in this matter, the defendant's prior behavior shows a pattern and practice of unreasonable defense of these claims and poor responses and conduct regarding injured employees," deputy Ledford said. "Therefore, a copy of this opinion and award shall be provided to [the vice-president for human resources] at Mission St. Joseph's Health System." Asheville attorney Allan Tarleton, who represented the hospital in Chellis, said Chairmen Lattimore's dissent was "appropriate, as were the deputy's findings in this case." The defendant will "likely" appeal the ruling, according to Tarleton. Referring to the previous fee awards cited by Teich, Tarleton said, "I don't believe those cases are relevant to this case."

Background

The plaintiff, a 46-year-old registered nurse, had worked for the defendant in various positions since 1991. In 1999, she suffered a compensable injury to her cervical spine. Despite a 2000 operation, she continued to have severe posterior neck and bilateral arm pain. The opinion states that on June 13, 2001, the defendant asked Advantage Surveillance, Inc. to videotape the plaintiff in public. Investigators got film of the plaintiff in different activities on 17 days over the course of 17 months. According to the commission, the tapes showed the plaintiff could occasionally use her left arm "in a fairly normal fashion" although none of the footage showed the plaintiff lifting more than 10 pounds or using her arm repetitively. That behavior was consistent with the plaintiff's work restrictions and her testimony that she had good and bad days, the commission stated. Key surveillance was taken immediately after the plaintiff left the defendant's office on Nov. 22, 2002 — the date of a trial return-to-work as a telephone triage nurse. The plaintiff was observed that particular day at the request of the hospital's comp administrator. Describing the trial return, the plaintiff said she was excited about going back to work but that after sitting for 30 minutes she began having neck spasms and left arm pain and had to leave. During the half-hour after the plaintiff left work, surveillance footage showed her "guarding" her left arm, crying in her car for several minutes, and several times stretching her neck back onto the vehicle's headrest. It also showed her using her right arm to operate the door lock on the left arm rest. Commissioner Young said that footage was consistent with the plaintiff's testimony that she developed neck spasms and left arm pain and numbness at work, and that pain was "somewhat alleviated" by resting her head, stretching her muscles and doing shoulder rolls. The video also corroborated the plaintiff's testimony that she was crying because of the pain and was upset that she couldn't do the telephone triage job. Pursuant to a discovery request, five labeled tapes were supplied to the plaintiff's attorney and were eventually admitted into evidence at the Aug. 27, 2003 hearing. At that hearing, a defense attorney also submitted an index of surveillance tapes. Neither that index nor the labels on the submitted videotapes disclosed any surveillance on Nov. 22, 2002. The hospital's comp administrator later testified that she didn't mention that the plaintiff was videotaped on that day "because she was never asked about specific dates." On the morning of the August 2003 hearing, the plaintiff's attorney received an e-mail with 60 pages of surveillance reports from Advantage. These had not been listed in the pre-trial agreement and the plaintiff's lawyer didn't have sufficient time to review the reports before the hearing and compare them with the videotapes he had received. He therefore didn't know about the Nov. 22, 2002 return-to-work footage at the hearing. That footage was also not shown to the plaintiff's physician, Dr. Loomis, during his Oct. 13, 2003 deposition. Defense counsel did play surveillance tapes from three days in 2001. Based on those tapes, Dr. Loomis said the plaintiff should have been able to perform the triage nurse job. On Oct. 20, 2003, the plaintiff's attorney e-mailed defense counsel that he had reviewed the surveillance logs and noticed they reflected footage for the Nov. 20, 2002 trial return that he had never seen. Later that day, defense counsel delivered a videotape with footage for four days, including Nov. 20, 2002. After reviewing the missing footage, Dr. Loomis said its depiction of the plaintiff's pain was consistent with what the plaintiff told him three days after the incident. On Oct. 24, 2003, the plaintiff filed a motion to admit the missing tape into evidence. In a response, defense counsel stated that it was not the intention of the defendant or the defendant's attorney to mislead the plaintiff about the omitted footage. On Nov. 18, 2003, the return-to-work surveillance was admitted into evidence.

Ruling

In reversing the deputy, Commissioner Young downplayed opinions from doctors and vocational rehab experts who hadn't seen the omitted tape. The commission gave greater weight to the opinions of Dr. Loomis and another physician who had treated the plaintiff extensively and had reviewed the footage after the failed return-to-work. The defendant's evidence didn't rebut the presumption of continuing disability from the parties' Form 21 agreement for compensation, the majority said.

Dissent

Chairman Lattimore dissented from the award and the sanctions. He said the plaintiff wasn't entitled to continuing temporary total disability benefits. According to Lattimore, the evidence showed: she was capable of returning to work; she didn't participate "fully" in three functional capacity evaluations; and "videotape surveillance shows that plaintiff demonstrates pain and disability only when in the presence of others. "The seventeen-month videotaped history shows that plaintiff is capable of activity and static positioning in excess of that required during her attempted return to work." According to Lattimore, a vocational specialist testified the plaintiff's taped behavior was not consistent with other tests. One doctor also testified the plaintiff had a motivation to stay disabled "as she is currently receiving social security disability checks which would be affected if she returns to work," Lattimore said. Lattimore also disagreed with the finding that the defendant failed to produce the Nov. 22, 2002 tape in bad faith. "The greater weight of the evidence shows that defendant did not intentionally fail to disclose the tape, but did so inadvertently," he wrote. "There was no evidence that defendant omitted the videotape in an attempt to mislead plaintiff's counsel." The $5,000 sanction was also excessive, according to Lattimore.

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