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Construction firm penalized additional 5% for worker’s injuries


A construction company that appealed the Indiana Workers Compensation Board’s award of medical and disability to a worker who fell through the roof not only lost its appeal, but saw the worker’s award increased by 5% by the court.

In KNK Group v. Sarver, the Indiana Court of Appeals on Monday affirmed the board’s ruling that the company did not carry workers compensation insurance and acted in bad faith when it denied that an accident occurred or that it employed the man who suffered serious injuries on its job site.

On Nov. 10, 2015, Doug Sarver was replacing a roof at an antique mall when he fell through, resulting in fractured ribs, muscle spasms, and shoulder and low back pain.

He sought workers compensation benefits for his injuries through KNK Group, which he said was his employer because he was paid by check from that company. However, Humphreys Construction, which owned KNK and, at least in part, several other construction firms, argued that the company was inactive, had no bank accounts and a negative net worth.

Mr. Sarver amended his claim to name Humphreys and several of its other companies, as well as the antique mall. Humphreys did not have workers compensation insurance, according to court documents.

Mr. Sarver testified that he was paid $16 per hour and performed work for the construction companies approximately 40 to 50 hours per week. Medical records show he was disabled from the date of his accident until March 28, 2016, and that his physician had determined in 2019 that Mr. Sarver had a 6% whole body impairment.

Humphreys contended that Mr. Sarver was not an employee and that no accident even occurred.

The workers compensation board, however, noted that two supervisors testified that the incident did occur and was caused by a failure to use a safety harness. The board found Humphreys’ statements to be not credible, and found no evidence that the firm had submitted a first report of employee injury or illness as required under Indiana law.

The board also held that Humphreys acted in bad faith and assessed penalties for violation of Indiana code. The antique mall was secondarily liable for failure to obtain a certificate of compliance confirming Humphreys — or its subsidiaries — had workers compensation coverage.

The board awarded Mr. Sarver $8,000 for temporary total disability, $10,000 for permanent partial disability, an additional $18,000 in TTD/PPD as a penalty, $6,000 in attorney fees, and the reimbursement of all medical costs to Mr. Sarver’s insurance carrier.

The appellate court affirmed the board’s decision and remanded the case with the instruction to increase Mr. Sarver’s award by 5%.