Failure to file prehearing statements required by the reviewing agency’s rules held to constitute a “waiver of defenses”

Failure to file prehearing statements required by the reviewing agency’s rules held to constitute a “waiver of defenses”
Matter of Smith v Albany County Sheriff's Dept., 2011 NY Slip Op 01559, Appellate Division, Third Department

Raymond C. Smith, a correction officer with the Albany County Sheriff’s Department, filed for workers' compensation benefits alleging that he suffered depression and anxiety due to harassment at his work place.

Although the Sheriff Department workers' compensation carrier controverted the claim, it failed to file a prehearing conference statement as required by the Rules of the Workers’ Compensation Board [12 NYCRR 300.38 (f) (1)]. As a result, the Workers' Compensation Law Judge held that the employer waived its defenses and, upon review of the medical records submitted by Smith, established the claim for a mental injury caused by work-related stress.*

The Workers' Compensation Board affirmed the Law Judge’s ruling and the insurance carrier appealed.

The Appellate Division, finding that Smith had submitted records sufficient to sustain the conclusion that the stress that caused the injury was greater than that experienced by others working in similar capacities and dismissed the carrier’s appeal.

The court explained that the prehearing conference statement requiring the employer to include, among other things, an offer of proof for each defense raised is designed to "facilitate the just, speedy and efficient disposition of the claimant's right to workers' compensation benefits, including settlement." The Appellate Division decided that providing by rule for a “waiver of defenses” for failing to file the statement is not an unreasonable expansion of the statute.**

* In contrast, Section 2(7) of the Workers’ Compensation Law specifically excludes from compensation "an injury which is solely mental and is based on work related stress if such mental injury is a direct consequence of a lawful personnel decision involving a disciplinary action, work evaluation, job transfer, demotion, or termination taken in good faith by the employer."

** Similarly, the Aures decision demonstrates the problem that could result if a party fails to appear at an administrative hearing as scheduled -- the hearing officer may hold the hearing "in absentia" and the determination will be binding on the parties [Aures v Buffalo Board of Education 272 AD2d 664].

The Smith decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_01559.htm
.