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Decision Made in Case Involving the Second Injury Fund: What Does this Mean for Employers?

In a recent Supreme Court of Missouri case, Douglas Cosby v. Treasurer of the State of Missouri, the Court issued an opinion that PPD benefits would no longer be awarded from the Second Injury Fund for injuries occurring after January 1, 2014.

The Facts

Mr. Cosby sustained a left knee injury at work in 2014 while working for a construction company. He filed a claim against his employer and the Second Injury Fund. He alleged that he was permanently and totally disabled, or alternatively, permanently and partially disabled as a result of his knee injury combined with his preexisting disabilities. Ultimately, he was not awarded any benefits from the Second Injury Fund.

Cosby’s case raised the issue that two statutory provisions addressing the liability of the Second Injury Fund were in conflict as to the timing of pre-existing injuries. The Court in this case harmonized these two conflicting provisions and stated that despite when the previous injuries occurred, PPD benefits would not be awarded from the Fund for work injuries occurring after 2014. Additionally, PTD benefits would be analyzed in the same manner meaning that the timing of the last injury would be the only date considered in determining if Fund liability exists. The old statutory scheme will only be used in cases where all injuries occurred before 2014.

Further, the Court, in a footnote, overruled the 2017 decision in Gattenby v. Treasurer of the State of Missouri. The Court in Gattenby indicated that if preexisiting disabilities occurred prior to January 1, 2014 the old Fund Liability Analysis would apply and therefore the Fund could be liable for PPD for work accidents occurring after January 1, 2014.

How Does This Impact Employers?

Permanent Partial Disability

For PPD claims, employers will likely claim there will be minimal or no impact on awards against the employer from the Cosby decision. Employees may try to argue that employers need to pay “the synergistic effect” of the combination of work injuries and pre-existing injuries that was previously paid by the Fund, but this is a question that has yet to be determined. Claims for permanent partial disability occurring after January 1, 2014 will no longer be paid by the Second Injury Fund.

Permanent Total Disability

For PTD claims, the Court’s decision in Cosby reinforces the stricter set of rules established in the new legislation from the 2014 amendments for permanent total disability. The 2014 legislation delineated categories of pre-existing disabilities that must rise to threshold levels (50 weeks of disability) to meet PTD benefits awarded from the Fund.

These pre-existing disabilities are:

  • a direct result of activity military duty in any branch of the United States Armed Forces; or
  • a direct result of a compensable injury; or
  • not a compensable injury, but a direct or significant aggravation of subsequent work-related injury; or
  • a pre-existing permanent partial disability of an extremity, loss of eyesight or hearing in one eye or ear, when there is a subsequent compensable bilateral injury

However, questions remain regarding the clarity of the categories listed in the statute, as well as how the employer will be affected in PTD combo cases where pre-existing disabilities do not meet either the threshold or category listed in the statute. There will likely be more litigation surrounding these four categories of pre-existing conditions for Fund liability.

If you have any questions about this case and what it means for you specifically, or any other questions about workers’ compensation, employment law or civil litigation, please give us a call.