Scruggs, Carla v. Amazon.com Services, LLC

FILED
Dec 19, 2022
06:34 AM(CT)
TENNESSEE
WORKERS' COMPENSATION
APPEALS BOARD
TENNESSEE BUREAU OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
Carla Scruggs ) Docket Nos. 2021-08-0875
) 2021-08-0876
v. )
) State File Nos. 39617-2021
Amazon.com Services, LLC, et al. ) 800483-2021
)
)
Appeal from the Court of Workers’ ) Heard December 2, 2022
Compensation Claims ) in Nashville, Tennessee
Kenneth M. Switzer, Chief Judge )
Affirmed and Remanded
In this interlocutory appeal, the employer asserts the trial court erred in awarding attorneys’
fees for a frivolous appeal following our earlier remand. Initially, the employee reported
injuring her left knee at work as a result of two separate accidents that occurred
approximately three weeks apart. It was only after the second accident that the employee
reported both incidents to the employer. After the cases were consolidated, the employer
filed a motion for summary judgment, asserting that the employee failed to give proper
notice of the first alleged accident. Following a hearing, the trial court issued an order
denying the employer’s motion for summary judgment and a separate order for continued
medical treatment for any left knee condition found to arise primarily out of the
employment. The employer appealed, and we concluded, in pertinent part, that the
employer’s appeal was frivolous. As a result, we remanded the case for a determination of
reasonable attorneys’ fees and costs arising from the frivolous appeal. Following entry of
the trial court’s order awarding attorneys’ fees, the employer has appealed. Upon careful
consideration of the record and the relevant statutory and regulatory provisions, we affirm
the trial court’s order and remand the case.
Presiding Judge Timothy W. Conner delivered the opinion of the Appeals Board in which
Judge Pele I. Godkin and Judge Meredith B. Weaver joined.
W. Troy Hart and Adam C. Brock-Dagnan, Knoxville, Tennessee, for the employer-
appellant, Amazon.com Services, LLC
Jonathan L. May, Memphis, Tennessee, for the employee-appellee, Carla Scruggs
1
Factual and Procedural Background
In our previous opinion issued June 27, 2022, we summarized the factual
background of this case as follows:
On April 9, 2021, Carla Scruggs (“Employee”) allegedly injured her
left knee when she lifted a tote while working for Amazon.com Services,
LLC (“Employer”). Employee did not immediately report the injury to
Employer or seek medical treatment. Rather, she finished her shift and went
home where she took over-the-counter medications and used ice and heat to
manage her pain. Employee continued to work her scheduled shifts until
April 30, when she slipped in liquid at work and allegedly injured the same
knee. Employee reported the April 9 and April 30 incidents to Employer on
April 30 and was initially seen at AmCare, Employer’s on-site medical clinic,
where she was given ibuprofen, ice, and a wrap for her knee. Employer later
provided a panel of physicians from which Employee selected Dr. Frederick
Wolf as her authorized physician.
Dr. Wolf first evaluated Employee on May 5 and noted she was
having difficulty with her left knee. Medical records reflect Employee
reported symptoms that “began as a result of an injury at work on 04/9/2021.”
Employee described “pulling totes on the line [and], as she pivoted she felt a
pop in her left knee and has had difficulty since that time.” Dr. Wolf ordered
an MRI, obtained x-rays, which revealed no fracture, and placed Employee
on light-duty restrictions. On May 17, Employer submitted a Notice of
Denial for the April 9, 2021 injury . . . . Thereafter, an MRI of Employee’s
left knee was performed that revealed a lateral meniscus tear, and Dr. Wolf
recommended surgery. On June 8, Dr. Wolf noted that Employee’s claim
“was denied a number of weeks ago but we were never informed of this.”
Employee filed a petition for benefit determination and, following an
unsuccessful mediation, two requests for expedited hearing, one for each date
of injury. In response, Employer filed a Motion to Dismiss, which the trial
court noted should be treated as a motion for summary judgment and which
the trial court denied. The court’s order allowed Employer an opportunity to
file a motion for summary judgment. The court also consolidated
Employee’s two claims and set the matter for a hearing. The parties agreed
to address both Employee’s requests for benefits and the motion for summary
judgment Employer anticipated filing at the same hearing. On February 4,
2022, Employer filed a motion for summary judgment. After a March 16,
2022 hearing, the trial court issued an order denying Employer’s motion for
summary judgment on April 6 and an order awarding medical benefits to
Employee on April 7.
2
In considering the first appeal of this case, we evaluated whether Employer’s appeal was
frivolous:
Specifically, Employee asserts, in part, that “there was no legitimate factual
or legal issue that would suggest a reasonable chance of success for
[Employer] on appeal.” Employee asserts Employer “took no meaningful
steps in the discovery phase of this cause beyond issuance of standard written
discovery . . ., took no fact witness depositions, nor did it take the deposition
of [Employee]. [Employer] took no expert medical depositions . . . [and] did
not even ask the Authorized Treating Physician to complete one of its
customary causation questionnaires before showing up on appeal to make
empty arguments about what such medical opinions might mean for the
case.” Employee further points to the fact that Employer failed to put on any
proof outside the cross-examination of Employee, and “did not even touch
upon summary judgment in its appeal, other than to include it on the Notice
of Appeal and list it in the ‘Statement of Issues’ in its brief.”
As we have noted previously, a frivolous appeal is one that is devoid
of merit or brought solely for delay. Yarbrough v. Protective Servs. Co., Inc.,
No. 2015-08-0574, 2016 TN Wrk. Comp. App. Bd. LEXIS 3, at *11 (Tenn.
Workers’ Comp. App. Bd. Jan. 25, 2016); see also Burnette v. WestRock, No.
2016-01-0670, 2017 TN Wrk. Comp. App. Bd. LEXIS 66, at *15 (Tenn.
Workers’ Comp. App. Bd. Oct. 31, 2017) (“Stated another way, a frivolous
appeal is one that . . . had no reasonable chance of succeeding.” (internal
citation and quotation marks omitted)). Litigants “should not be required to
endure the hassle and expense of baseless litigation. Nor should appellate
courts be required to waste time and resources on appeals that have no
realistic chance of success.” Yarbrough, 2016 TN Wrk. Comp. App. Bd.
LEXIS 3, at *10-11 (internal citations omitted). We agree that Employer
presented no credible argument on appeal and that it had no realistic chance
of success on appeal. Thus, we conclude Employer’s appeal is devoid of
merit and is frivolous, and Employee is entitled to recover reasonable
attorneys’ fees and costs associated with the frivolous appeal, the amount of
which shall be determined by the trial court on remand.
(Footnote omitted.)
Following remand, the trial court gave both parties the opportunity to present
evidence and argument on the frivolous appeal issue, and it conducted a hearing on
September 8, 2022. Following the hearing, the court ordered payment of attorneys’ fees in
the amount of $10,080.00. No costs were sought or awarded. Employer has appealed.
3
Standard of Review
The standard we apply in reviewing a trial court’s decision presumes that the court’s
factual findings are correct unless the preponderance of the evidence is otherwise. See
Tenn. Code Ann. § 50-6-239(c)(7) (2022). The interpretation and application of statutes
and regulations are questions of law that are reviewed de novo with no presumption of
correctness afforded the trial court’s conclusions. See Mansell v. Bridgestone Firestone N.
Am. Tire, LLC, 417 S.W.3d 393, 399 (Tenn. 2013). We are also mindful of our obligation
to construe the workers’ compensation statutes “fairly, impartially, and in accordance with
basic principles of statutory construction” and in a way that does not favor either the
employee or the employer. Tenn. Code Ann. § 50-6-116 (2022).
Analysis
The parties have raised several issues on appeal. Employer asserts that we exceeded
our authority in remanding this case for an award of attorneys’ fees and costs following
our finding that Employer’s initial appeal was frivolous. It has not challenged our original
conclusion that the first appeal was frivolous or the amount subsequently awarded by the
trial court in attorneys’ fees. Employer’s sole issue is whether we have the statutory or
regulatory authority to remand a case for an award of attorneys’ fees and costs following a
frivolous appeal finding. For her part, Employee raises three issues, which we have
restated as: (1) whether Employer’s failure to put the Tennessee Attorney General’s office
on notice of the dispute is fatal to this appeal; (2) whether Employer has alleged any error
on the part of the trial court; and (3) whether the current appeal is frivolous and, if so,
whether an additional award of fees is merited.
Authority Related to Frivolous Appeals
All authority exercised by an administrative tribunal must have statutory or
regulatory support. Entertainer 118 v. Metro Sexually Oriented Bus. Licensing Bd., No.
M2008-01994-COA-R3-CV, 2009 Tenn. App. LEXIS 550, at *8 (Tenn. Ct. App. Aug. 14,
2009) (concluding a metropolitan charter cannot grant an administrative tribunal powers
not authorized by its enabling legislation). In some circumstances, an administrative
tribunal is expected to apply a higher court’s interpretation of relevant statutes or
regulations or other common law principles. See, e.g., All Access Coach Leasing, LLC v.
McCord, No. M2020-01368-COA-R3-CV, 2021 Tenn. App. LEXIS 428 (Tenn. Ct. App.
Oct. 28, 2021) (concluding an administrative review tribunal had correctly applied
common law principles in determining whether certain workers were employees or
independent contractors). Hence, in evaluating the issues raised in this case, we must look
to the language of relevant statutes and regulations as well as our appellate courts’ prior
interpretations of those statutes and regulations.
4
First, in Tennessee Code Annotated section 4-3-1409(a), the legislature declared
“that the independence of the bureau of workers’ compensation is paramount.”
Consequently, the legislature granted certain authority to the Administrator of the
Tennessee Bureau of Workers’ Compensation (“Bureau”), including the “development and
maintenance of an organizational structure to ensure fair, equitable, expeditious, and
efficient administration of the workers’ compensation law.” Tenn. Code Ann. § 4-3-
1409(b)(A).
Moreover, in Tennessee Code Annotated section 50-6-118, the Bureau was given
the authority to promulgate rules in accordance with the Uniform Administrative
Procedures Act (“UAPA”) to “establish and collect penalties” for certain actions
committed by a party in a workers’ compensation case. All such penalties, except for those
related to an employer’s failure to provide workers’ compensation coverage or qualify as
a self-insured entity, are paid “to the bureau for use by the bureau, at the discretion of the
administrator, to offset the cost of administering this chapter.” Tenn. Code Ann. § 50-6-
118(b). 1 Penalties assessed by the Bureau in accordance with section 50-6-118 are subject
to the provisions of the UAPA, which provides for, among other things, appeal of a penalty
to an agency member designated by the Administrator, who will conduct a contested case
hearing in accordance with the UAPA. For purposes of this analysis, it is significant to
note that section 50-6-118 does not address frivolous appeals or provide for the imposition
of any penalties associated with such appeals.
Thereafter, in Tennessee Code Annotated section 50-6-233, the legislature provided
the Administrator with additional authority as follows:
(a)(1) There is conferred upon the administrator the power to enforce this
chapter that relate[s] to the assurance of payments of the awards under this
chapter.
....
(b) In addition to the rulemaking authority granted in § 50-6-118, and
subsection (a), the administrator . . . may promulgate rules and regulations
implementing this chapter.
One such regulation is Tenn. Comp. R. & Regs. 0800-02-22-.09(4), which states:
When it appears to the appeals board that an appeal was frivolous or taken
solely for delay, the appeals board may, either upon motion of a party or of
1
Penalties related to an employer’s failure to provide workers’ compensation coverage or qualify as a self-
insured entity are paid into the Uninsured Employers’ Fund. See Tenn. Code Ann. § 50-6-118(b).
5
its own motion, award expenses, including reasonable attorney’s fees,
incurred by the appellee as a result of the appeal.
The regulation noted above, however, is not the only provision that addresses frivolous
appeals in workers’ compensation cases. Tennessee Code Annotated section 50-6-225(d)
states as follows:
When a reviewing court determines pursuant to motion or sua sponte that the
appeal of an employer or insurer is frivolous, or taken for purposes of delay,
a penalty may be assessed by the court, without remand, against the appellant
for a liquidated amount.
Here, Employer argues that the language of Tennessee Code Annotated section 50-
6-225(d), which describes awarding a “penalty” for a “liquidated amount” without remand,
is inherently inconsistent with the language in Tenn. Comp. R. and Regs. 0800-2-22-.09(4),
which provides for an award of “expenses, including reasonable attorney’s fees” following
a frivolous appeal finding. As a result of this inconsistency, Employer argues, the
regulation must give way to the statute. Before addressing such assertions, however, it is
necessary to address certain of Employee’s arguments.
Challenges to the Validity of a Statute or Regulation
Tenn. Comp. R. and Regs. 0800-02-22-.10(2) provides that “[w]hen the validity of
a statute of this state or an administrative rule or regulation of this state is drawn into
question . . . the party raising such question shall serve a copy of the party’s notice of
appeal, and any subsequent brief on the Attorney General of Tennessee.” (Emphasis
added.) The use of the word “shall” creates a mandate, not an option. Cf. Gentry v.
Arapazuma, Inc., No. 2019-06-2140, 2022 TN Wrk. Comp. App. Bd. LEXIS 30, at *11 n.3
(Tenn. Workers’ Comp. App. Bd. July 19, 2022) (“As we have noted previously, the use
of the word ‘must’ in the rule signals a requirement, not a suggestion.”) Thereafter,
subparagraph (4) of the same regulation gives the Attorney General an opportunity to file
a brief and, if oral arguments are scheduled, be heard. Here, it is undisputed that the
Tennessee Attorney General’s office was not served with a copy of Employer’s notice of
appeal or brief. Thus, to the extent Employer is challenging the validity of Tenn. Comp.
R. and Regs. 0800-02-22-.09(4), we agree with Employee that Employer has failed to
properly preserve the issue for appeal. 2
2
During oral argument, Employer asserted that, pursuant to Rule 24.04 of the Tennessee Rules of Civil
Procedure, a trial court is obligated to direct a party to provide notice to the Attorney General when the
validity of a regulation is challenged, and that this was not done here. We conclude, however, that this
procedural rule must give way to Tenn. Comp. R. and Regs. 0800-02-22-.10(2). Tennessee Code Annotated
section 50-6-239(c)(1) states: “Whenever the administrator has adopted an alternate procedural or
evidentiary rule that conflicts with the Tennessee Rules of Civil Procedure or the Tennessee Rules of
Evidence, the rule adopted by the administrator shall apply.” Tenn. Code Ann. § 50-6-239(c)(1) (2022).
6
That conclusion, however, does not end our inquiry. In addition to challenging the
validity of the regulation in question, Employer also argues that we have misinterpreted
and/or misapplied the language of Tennessee Code Annotated section 50-6-225(d), which
we address below.
Issues Preserved for Appeal
Employee next argues that this appeal is flawed because Employer does not allege
any errors on the part of the trial court in its order awarding attorneys’ fees. Employer has
not challenged the amount of the trial court’s award; however, at the hearing before the
trial court, Employer did raise the issue of whether we had the authority to remand the case
for an award of attorneys’ fees and costs following our frivolous appeal finding. The trial
court concluded the issue was beyond the scope of its authority and did not specifically
address it in its order. During the hearing, however, the trial court commented that “such
a question is best posed to the Appeals Board if that is what [Employer] is inclined to do.”
In short, the issue was presented and argued at the hearing, included in the notice of appeal,
and addressed in the briefs. Therefore, we conclude the issue was properly preserved for
appeal. See Tenn. Comp. R. & Regs. 0800-02-22-.05(3) (briefs in interlocutory appeals
must “specify the issues presented for review”).
Remedies for a Frivolous Appeal
Employer hinges its argument on three components of Tennessee Code Annotated
section 50-6-225(d): “penalty,” “liquidated amount,” and “without remand.” 3 It is also
crucial, in our view, to note the use of the word “may” in this subsection. Thus, when a
reviewing court concludes an appeal is frivolous, that tribunal may award a penalty, without
remand, for a liquidated amount. The use of the word “may” in a statute indicates a
permissive, not mandatory, action. See, e.g., Embraer Aircraft Maint. Servs. v.
AeroCentury Corp., 538 S.W.3d 404, 408 (Tenn. 2017) (addressing the “use[] of the
permissive word ‘may’” in a Tennessee statute).
The question then arises whether an award of a “penalty” in a “liquidated amount”
by the reviewing court is the only possible remedy in workers’ compensation cases where
a party has filed a frivolous appeal. On this point, there is significant precedent to guide
our analysis. For example, in Cherokee Ins. Co. v. McNabb, No. E2010-02348-WC-R3-
WC, 2011 Tenn. LEXIS 768 (Tenn. Workers’ Comp. Panel Aug. 29, 2011), the Supreme
Court’s Special Workers’ Compensation Appeals Panel concluded an insurer’s appeal was
frivolous. Id. at *12. Citing the relevant language as noted above, now codified in
subsection 50-6-225(d), the Court assessed a penalty of $2,000.00 against the insurer for
the frivolous appeal. Id.3
Tennessee Code Annotated section 50-6-225(e) includes virtually identical language applicable in cases
where the employee has filed a frivolous appeal.
7
Yet, in Ferrell v. APAC-Tennessee, Inc., No. M1999-02260-WC-R3-CV, 2000
Tenn. LEXIS 722 (Tenn. Workers’ Comp. Panel Dec. 1, 2000), the Workers’
Compensation Appeals Panel took a different approach. There, the Court commented on
the employer’s defense of the claim:
[I]f a defendant is so uninterested in exerting either the effort or expense of
defending itself at trial that it chooses to offer no medical proof, no exhibits
and no witnesses to rebut the plaintiff’s more than adequate showing, then
any appeal pursued with a corresponding level of disinterest must necessarily
be viewed as frivolous and as a waste of this court’s time. This court clearly
has the authority to award damages for frivolous appeals sua sponte.
Id. at *10-11. Instead of awarding a penalty in a specified amount, however, the Court
cited the same statutory language noted above but remanded the case to the trial court “for
imposition of appropriate penalty for frivolous appeal which may include, but need not be
limited to, costs, interest on the judgment, expenses[,] and attorney fees.” Id. at *12(emphasis added). Thus, the Appeals Panel has interpreted the word “penalty” as used in
section 225(d) more broadly than is advocated by Employer in this case, and the Appeals
Panel has further explained that a “penalty” may include attorneys’ fees and expenses in
the context of this statute.
Even more recently, the Supreme Court’s Special Workers’ Compensation Appeals
Panel addressed a frivolous appeal in a similar manner. In Harris v. Mastec N. Am., Inc.,
No. M2016-02307-SC-R3-WC, 2017 Tenn. LEXIS 894 (Tenn. Workers’ Comp. Panel Jan.
9, 2018), the Appeals Panel concluded that the employer’s appeal was frivolous. Instead
of awarding a set penalty against the employer, the Appeals Panel remanded the case to the
trial court “for a determination of reasonable attorneys’ fees and expenses incurred by [the
employee] in defending the appeal.” Id. at *11. In doing so, the Appeals Panel cited the
same statutory language upon which Employer relies in the present case. See also
Reatherford v. Lincoln Brass Works, No. 01S01-9707-CV-00145, 1998 Tenn. LEXIS 33,
at *5 (Tenn. Workers’ Comp. Panel Jan. 26, 1998) (the case was remanded to the trial court
pursuant to Tennessee Code Annotated section 50-6-225 “for the assessment of
damages . . . as upon a frivolous appeal”).
Moreover, in 1992, the full Tennessee Supreme Court addressed the issue of a
frivolous appeal in Wells v. Sentry Ins. Co., 834 S.W.2d 935 (Tenn. 1992). 4 Despite having
the clear statutory authority to award a penalty, without remand, for a liquidated amount,
the Court explained as follows:
4
At the time Wells was decided, the same statutory language as noted above appeared in Tennessee Code
Annotated section 50-6-225(i).
8
The defendants have cited no evidence or rule of law which would entitle
them to a reversal or other relief from the decree of the trial court. We,
therefore, conclude this appeal is frivolous, and award to the plaintiff
damages against the defendants, which shall consist of all costs incurred on
appeal, interest on the award until paid, expenses incurred by the plaintiff as
a result of the appeal, including a reasonable attorneys’ fee, the amount of
which shall be determined by the trial judge upon remand.
Id. at 938-39 (emphasis added). Significantly, despite the language in section 50-6-225,
the Supreme Court chose not to impose a penalty for a set amount it determined, but it
instead remanded the case to allow the trial court to determine an award “to the plaintiff”
for the frivolous appeal, including a reasonable attorneys’ fee.
Thus, both the Tennessee Supreme Court and its Special Workers’ Compensation
Panel, relying on the same or substantially similar statutory language as is at issue in the
present case, have crafted different remedies for frivolous appeals, which includes cases in
which a set penalty was awarded and cases where the appellate court remanded the case
for an award of “damages,” including attorneys’ fees and costs. Given this authoritative
precedent, we conclude that the provisions of Tennessee Code Annotated section 50-6-
225(d) and (e) are not inherently inconsistent with Tenn. Comp. R. and Regs. 0800-02-22-
.09(4). Instead, subsections 225(d) and (e) provide a remedy, but not the only remedy, for
frivolous appeals. The Bureau’s Administrator, through its rulemaking authority, has
articulated another remedy for frivolous appeals that is consistent with the Supreme Court’s
interpretation of the frivolous appeal remedies authorized by Tennessee Code Annotated
section 50-6-225. Therefore, we find Employer’s arguments without merit.
Frivolous Appeal
Finally, although we have concluded Employer’s arguments in this appeal are
without merit, we do not find that the arguments were so devoid of merit, or taken solely
for delay, as to support another penalty or award of attorneys’ fees and costs. We therefore
decline Employee’s request for an additional award of fees and costs in this matter.
Conclusion
For the foregoing reasons, we affirm the trial court’s order awarding attorneys’ fees
to Employee for a frivolous appeal and remand the case.
9
TENNESSEE BUREAU OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
Carla Scruggs ) Docket Nos. 2021-08-0875
) 2021-08-0876
v. )
) State File Nos. 39617-2021
Amazon.com Services, LLC, et al. ) 800483-2021
)
)
Appeal from the Court of Workers’ ) Heard December 2, 2022
Compensation Claims ) in Nashville, Tennessee
Kenneth M. Switzer, Chief Judge )
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Appeals Board’s decision in the referenced
case was sent to the following recipients by the following methods of service on this the 19th day
of December, 2022.
Name Certified First Class Via Via Sent to:
Mail Mail Fax Email
Adam C. Brock-Dagnan X acbrock-dagnan@mijs.com
wth@mijs.com
Jonathan May X jmay@forthepeople.com
cwoods@forthepeople.com
Kenneth M. Switzer, Chief Judge X Via Electronic Mail
Penny Shrum, Clerk, Court of X penny.patterson-shrum@tn.gov
Workers’ Compensation Claims
Olivia Yearwood
Clerk, Workers’ Compensation Appeals Board
220 French Landing Dr., Ste. 1-B
Nashville, TN 37243
Telephone: 615-253-1606
Electronic Mail: WCAppeals.Clerk@tn.gov