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Injured Worker Can Sue Workers Compensation Insurance Company for Egregious Conduct

On September 4, 2018, the N.C. Court of Appeals delivered a stinging rebuke to a workers compensation insurance company after their unethical treatment of an injured worker.

In Seguro-Suarez v. Key Risk Insurance Company et. al, the Court of Appeals ruled that an injured worker could sue the workers compensation insurance company for extreme malfeasance in civil court, despite the case originating from a workers compensation claim.

In 2003, Mr. Suarez was working for Southern Fiber when he fell nearly two stories down onto the concrete below. As a result of the fall, the injured worker suffered multiple broken bones and a severe traumatic brain injury. Mr. Suarez nearly died from his injuries, but thanks to multiple surgeries, including a brain surgery, he survived. The worker never fully recovered, however, and he has permanent brain injury. Mr. Suarez needs assistance with dressing, feeding, bathing, and other basic needs.

Key Risk was the worker's compensation carrier for Southern Fiber and, according to the opinion of Court, tried various methods to either deprive the injured worker of medical care or terminate his benefits all together. These tactics included getting the injured worker's daughter to provide care to Mr. Suarez (for free) rather than a medical facility, denying medical care ordered by the doctors, and sending Mr. Suarez to a neurologist with a known reputation for releasing brain injured workers to work. Key Risk also hired a private detective to perform undercover surveillance of the injured worker, and they edited the surveillance footage to make it appear as if Mr. Suarez was not injured. They also forced the injured worker to submit to independent medical evaluations (which determined that Mr. Suarez was indeed severely injured).

These tactics by Key Risk did not fool the courts. The N.C. Industrial Commission repeatedly ordered Key Risk to provide care and benefits to Mr. Suarez. When the insurance company lost before the Industrial Commission, they appealed and appealed, all the way to the N.C. Supreme Court. The NC appellate courts also ordered Key Risk to pay the injured worker his benefits and provide medical care.

Having exhausted legal remedies to escape liability for the workers compensation claim, Key Risk then pulled its dirtiest trick yet. According to the Court's opinion, the insurance company hired a private detective to take much edited undercover video footage of Mr. Suarez to the Lincolnton Police Department. There, the private detective encouraged and convinced law enforcement officers that Mr. Suarez was committing insurance fraud. Apparently, the Lincolnton police Department did not bother to scrutinize the private detective's story or seriously review the extensive medical records of the injured worker. Instead, they arrested Mr. Suarez and charged him with multiple felonies for insurance fraud on October 24, 2013. Key Risk then used this opportunity to try to deny Mr. Suarez further benefits and force him to repay the benefits they had given him.

Mr. Suarez was placed in jail. While there, he was examined by a court-ordered expert who determined that Mr. Suarez's condition was legitimate. In a later court hearing on the case, the judge presiding over the criminal matter criticized law enforcement and the district attorney's office for being used by Key Risk. All criminal charges were eventually dropped, but not before Mr. Suarez spent over a year in custody.

The injured worker then sued Key Risk and their employees for malicious prosecution, abuse of process, and unfair and deceptive trade practices in civil court.

In a stunning move, Key Risk moved to dismiss Mr. Suarez's claims, arguing that since his claims arose out of a worker's compensation case, he could not receive any compensation for the horrible treatment by the insurance company. In short, Key Risk argued that a workers' compensation carrier had complete immunity in civil court for anything done to an injured worker, as the worker's compensation act was the only remedy available (and consequently, did not provide remedy for this type of bad action by an insurance company).

The N.C. Court of Appeals rejected this argument. They wrote, "taken to its logical end, (Key Risk's) argument would allow a worker's compensation carrier to hire an assassin to kill and injured employee in order to terminate ongoing workers' compensation but avoid tort liability for wrongful death...". The Court then ruled that the injured worker's claims could proceed.

The Suarez case is an example of how far insurance companies will go to escape paying legitimate claims. Fortunately, N.C. courts have made it clear that insurance companies will not be able to escape justice when they do resort to such tactics.

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