Defaulting on claims is one of the more serious and common mistakes that employers and their insurance make in the early stages of a case. Once a Claim for Compensation is filed, then the defense only has 30 days in which to file their answer, after the Division of Workers’ Compensation sends out notice. Missouri case law makes it clear that there are serious consequences for the defense of a claim after that 30 days has lapsed: all factual allegations are deemed admitted. Employers will be unable to bring factual defenses about whether the accident occurred and the details of how it occurred and will also be precluded from bringing many medical causation defenses, depending on the details of how the Claim for Compensation is worded. Another way in which this can often undermine the defense in Missouri claims is on the issue of Average Weekly Wage (AWW). It is common for claimant’s attorneys to simply put “MAX”, or “maximum rates,” in which case the case law has confirmed that the maximum possible rates will be applied in the instance of a default, even if the employer has a wage statement or clear evidence that the claimant in fact has a lower AWW.
“The failure to provide timely answers results in the factual statements in the claim being admitted but does not result in the admission of legal conclusions such as whether the injury arose out of or in the course of the employment.” Taylor v. Labor Pros LLC, 392 S.W.3d 39 (2013). When there has been a default, employers will still be able to contest legal issues, however, the domain of what consists as legal issues is narrower than one would expect. In Taylor, the Court of Appeals discussed the limits of default and what constitutes factual versus legal issues, ruling that the accident itself cannot be disputed, regardless of how persuasive the evidence may be that no accident occurred or that the accident occurred differently; they also confirmed that “max rates” will be indisputable when the employer defaults. However, the Court in Taylor drew the line at the percentage of PPD disability being a factual issue. The claimant had asserted in the Claim for Compensation that he had suffered 75% loss of the left eye. The Court of Appeals clarified that the percentage of disability is distinctly a legal issue that cannot be defaulted on, distinct from the rates.
Anderson v. Veracity Research Co., 299 S.W.3d 720 (2009) also includes a thorough discussion of issues pertaining to default. It was determined there that, on default, the employer loses any ability to dispute whether the accident occurred and as to the details of how the accident is described in the Claim for Compensation, even in some instances when the description is tied into the relationship of how the injury developed and medical causation. However, the Court in Anderson did distinguish the issue of whether or not the accident arose out of and in the course of employment, which a distinctly legal and not factual issue. “There is a difference between the physical location of an accident and the legal conclusion that an accident met the statutory criteria for compensability.”
In short, employers and the defense in Missouri workers’ compensation claims may still be able to find legal issues to dispute and defend in the instance of default, however, defaulting on a Claim for Compensation can have harsh consequences and requires the utmost care and attention to ensure that an otherwise solid defense is not destroyed by the failure to file a timely answer. The most critical step is to ensure that either the employer, or counsel for the defense, files an answer within the 30-day deadline. For any questions on answers to claims for compensation, or any Missouri workers’ compensation issues in general, please reach out to Michael Bantz at [email protected].