The Nebraska Supreme Court has recently provided clarity on the issue of when an appellate court may modify, reverse, or set aside a Nebraska Workers’ Compensation Court decision. Under Nebraska’s Workers’ Compensation Act, a judgement, order, or award of the compensation court can be modified, reversed, or set aside in the following circumstances: “(1) the compensation court acted without or in excess of its powers, (2) the judgment, order, or award was procured by fraud, (3) there is no sufficient competent evidence in the record to warrant the making of the order, judgment, or award, or (4) the findings of fact by the compensation court do not support the order or award.” Neb. Rev. Stat. §48-185 (2011).

The Nebraska Supreme Court recently dealt with this issue in Spratt v. Crete Carrier Corp. In this case, James Spratt had recently obtained a workers’ compensation award granting him medical rehabilitation services for his lumbar back. However, Mr. Spratt sought modification to provide these services for his thoracic back. Spratt v. Crete Carrier Corp., N.W.2d, 311, 262, 264 (Neb. 2022). The compensation court refused to modify the award, holding that it lacked the statutory authority to modify the award, and that even if it had the authority, “a principle of finality precluded that relief.” Id

In this case, Mr. Spratt injured his back while working as a commercial truckdriver for Crete. Mr. Spratt reported severe pain and muscle spasms in his thoracic and lumbar back and was initially diagnosed with a thoracic strain. Spratt v. Crete Carrier Corp., N.W.2d, 311, 262, 264 (Neb. 2022). Mr. Spratt was prescribed physical therapy, but his back pain and spasms persisted for months after the injury. Id. at 264-265. Eventually, Dr. Michael Gilmore diagnosed Mr. Spratt with spondylosis without myelopathy or radiculopathy of his lumbar back, and pain in the thoracic spine. This diagnosis was then changed to lumbar facet capsulitis. Id. Crete requested a second opinion from Dr. D. Kevin Donahoe, who diagnosed Mr. Spratt with a thoracic and lumbar strain which should be resolved. Id.

In June 2019, the compensation court concluded that Mr. Spratt suffered a temporary thoracic strain that had resolved but exacerbated preexisting lumbar facets. Therefore, the compensation court awarded treatment of Mr. Spratt’s lumbar spine to place him at Maximum Medical Improvement. Spratt v. Crete Carrier Corp., N.W.2d, 311, 262, 265-266 (Neb. 2022). Mr. Spratt did not appeal the original award, and Dr. Gilmore placed him at Maximum Medical Improvement in November 2020. Despite this, Mr. Spratt continued to complain of back pain. At that time, Crete moved for modification to close the open award for temporary benefits and ongoing medical benefits. Mr. Spratt requested the compensation court to modify the original award so he could receive treatment for his thoracic back. Id. The compensation court denied this request, holding that Neb. Rev. Stat. §48-162.01(7) did not provide them with the authority to modify, amend, or re-open the award, and that Mr. Spratt was not able to re-litigate this issue. Id. at 267. 

The Nebraska Supreme Court reversed and remanded the Nebraska Workers’ Compensation Court’s order reasoning that the Workers’ Compensation Court has the statutory authority to modify an Award for compensation. The Nebraska Supreme Court cited to Neb. Rev. Stat. Ann. § 48-162.01(7) stating “where a prior award of the compensation court has provided medical or rehabilitative services, the compensation court may modify the award of such services to the extent the court finds such modification necessary in order to restore the employee to gainful suitable employment, or otherwise required in the interest of justice.” Spratt v. Crete Carrier Corp., N.W.2d, 311, 262, 276 (Neb. 2022). The Court held the compensation court erred in finding that it lacked the authority to modify the original award. Id. The Nebraska Supreme Court confined its rationale in interpreting Neb. Rev. Stat. Ann. § 48-162.01(7) as to allow for the modification of benefits as it relates to medical or physical rehabilitation services if it is necessary to accomplish the goal of restoring the injured employee to gainful and suitable employment, or otherwise required in the interest of justice Id.

The Nebraska Supreme Court also analyzed whether Mr. Spratt was precluded from requesting a modification under the “law of the case doctrine”, which is a “principle that an issue that has been litigated and decided in one stage of a case should not be relitigated at a later stage.” Spratt v. Crete Carrier Corp., N.W.2d, 311, 262, 277 (Neb. 2022). This doctrine prevents parties from re-litigating an issue which has already been settled within a single action unless the challenging party timely files an appeal. The Nebraska Supreme Court held that the “law-of-the-case doctrine” did not bar modifying the original order. Id at 277. The Nebraska Supreme Court’s reasoning was the “law-of-the-case doctrine” does not apply unless a party has an opportunity and incentive to appeal from an original order. The Nebraska Supreme Court’s reasoning was the Mr. Spratt had no reason or incentive to appeal until the later diagnosis of the thoracic spine. Id at 278. However, the Court held this doctrine did not apply, because Mr. Spratt did not have an incentive to appeal the original award. Mr. Spratt reasonably believed he would receive treatment to rehabilitate his back, and only realized the award was insufficient after the time for appeal had passed. Id. at 278. Therefore, the Court held the “law of the case doctrine” did not apply in this case, and the compensation court erred in holding Mr. Spratt was precluded from bringing this appeal resulting in the ruling being reversed and remanded. Id. at 278, 279. 

The Spratt  ruling provides some clarity in determining when awards of medical and rehabilitation services can be modified in Nebraska. Essentially, the Nebraska Supreme Court has made it clear that the workers’ compensation court has the statutory authority to modify these awards, to the extent it is necessary to restore the injured employee to gainful or suitable employment, or the interests of justice require it. This could have major implications for how workers’ compensation cases get resolved at the Trial level.

 

If you have questions about this case and/or how it impacts matters you are reviewing, please do not hesitate to reach out to our talented attorneys. Sodoro Law Group is a full-service law firm responding to the legal needs of clients in Nebraska, Iowa, Kansas, Missouri, and South Dakota.

For more information, or to contact the team at Sodoro Law Group, go to https://www.sodorolaw.com or email Kelsey Sievers at kseivers@sodorolaw.com.