Unbaking the Cake? Southern District splits with Eastern District on Impact of Enhanced Benefit on Qualifying Injuries in SIF Cases: Walton v. Treasurer of Missouri

Last November, the Eastern District of the Missouri Court of Appeals ruled in Ryan v. State of Missouri, Second Injury Fund that a portion of a prior award of enhanced permanent partial disability (PPD) benefits could be factored into determining whether a claimant's preexisting injury meets the threshold for a qualifying preexisting disability under the statute allowing for benefits against the Second Injury Fund.  Last week, the Southern District sharply criticized and refused to follow Ryan in a similar situation, holding that strict construction and the rules of statutory interpretation required a different result.

In Walton v. Treasurer of Missouri as Custodian of Second Injury Fund, handed down March 20, 2025, the Southern District – like the Eastern District before it – analyzed two subsections of Section 287.220.3(2), which sets out the conditions that must be met for a claim to proceed against the Fund.  Specifically, both courts interpreted subsection (2)(a)a, which requires an employee have “a medically documented pre-existing disability equaling a minimum of fifty weeks of” PPD, and subsection (2)(a)a(ii), which allows for benefits against the Fund if such an injury was “a direct result of a compensable injury. . .” 

Ryan v. State of Missouri, Second Injury Fund

The facts of both cases are strikingly similar.  In Ryan, the claimant had multiple prior injuries, many of which resulted in PPD that easily exceeded the 50 week threshold.  One of those injuries, a 2011 right shoulder and spine injury, resulted in an Award of 20% of the shoulder, or 46.4 weeks, and 20% to the cervical spine, or 80 weeks.  In addition, the ALJ awarded a 15% enhancement of benefits against the Fund.  The Fund did not appeal that award.

Ryan’s primary injury was in 2015.  He settled those claims with the employer and proceeded to trial against the Fund.  His vocational expert opined he was unable to return to work in any substantial gainful employment, which the Fund did not dispute.  The medical expert determined the PTD was “a direct result of his 2015 primary injuries in connection with his . . . 2011 injuries,” including the right shoulder injury that resulted in 46.4 weeks of benefits.  The ALJ awarded benefits against the Fund, finding that the 2011 right shoulder was a qualifying injury under the statute despite the 20% award.  To reach this conclusion, the ALJ deconstructed the enhancement of the prior award against the Fund and found that 6.98 weeks of benefits should be added to the prior award, putting the total amount of disability over the threshold. 

The Fund filed an application for review to the Commission, who reversed that portion of the Award.   Although the Commission agreed Ryan was permanently and totally disabled as a result of a combination of his primary injury and the pre-existing injuries, it disagreed with the ALJ’s decision to enhance the shoulder injury to make it qualify under the Act.  And, since Ryan's experts relied on all prior injuries, including the now non-qualifying injury, it was unable to conclude he was PTD as a result of the primary injury and all qualifying injuries.

That decision was appealed to the Eastern District, which first analyzed prior Supreme Court cases discussing the legislative changes that led to the adoption of this new Section 3.  It noted that those cases confirmed that, to prevail on a claim against the Fund, only injuries that met the statutory threshold could be considered.  It acknowledged that this issue – whether enhanced benefits awarded against the Fund can raise a prior disability to a qualifying level – was an issue of first impression.

Ultimately, the Eastern District found that they can.  It found nothing in the statutory language that precluded it from incorporating the enhanced benefits, and found that “Case law is clear that the enhancement is for additional PPD which exceeds the sum of the individual disability, current and prior, due to them coexisting and continuing.” (emphasis added).

The Court then turned to subsection 2(a)a(ii) and found that despite the enhancement coming from the synergistic effect between the injuries prior to 2011 and his 2011 claim, it was the “direct result” of a compensable injury.  It found that the “PPD weeks awarded to the right shoulder disability and enhanced PPD were all part of one award that is final and unappealable.  In other words, without the 2011 primary injury to the right shoulder, there is no enhanced PPD derived in part from that right shoulder.  Therefore, the enhanced PPD at issue here is a direct result of the 2011 work injury to the right shoulder.”   Because all of the criteria of Section 287.220.3 were met, the Eastern District reversed the Commission and remanded with instructions to grant PTD benefits from the Fund.

Walton v. Treasure of Missouri as Custodian of Second Injury Fund

Like Ryan, the claimant in Walton had several preexisting injuries, the first of which was a shoulder injury that resulted in a 20% disability, or 46.4 weeks.  The second injury was for a lower back, which settled at 30% body as a whole, or 120 weeks, clearly a qualifying injury.  The Fund settled a claim against it for the second injury for a 10% enhancement.  The Southern District noted that “although the parties dispute whether the Enhanced PPD was ‘apportioned’ between Appellant’s left shoulder and lower back, this total – 16.64 weeks – was calculated by using a 10% enhancement of the left shoulder (4.64 weeks) and a 10% enhancement of the lower back (12 weeks) injuries.”  Thus, it appears that the Southern District was conceding that, mathematically at least, it was possible to determine how much of the enhanced disability was attributable to the shoulder injury.

The primary injury in Walton was a 2017 injury involving multiple body parts.   Experts once again found the Employee was permanently and totally disabled, and that this disability was the result of a synergistic effect between the primary injuries and all of the prior injuries, including the 20% prior shoulder injury.  The Commission once again denied benefits, finding the first injury was not a qualifying injury under the statute.  The Southern District framed the issue as whether the Commission erred in finding that the first injury was not a qualifying injury under the Act “because it was considered in isolation from some portion of the Enhanced PPD award from the previous Fund Settlement.”

Like the Eastern District, the Southern District noted the Supreme Court cases interpreting this section, and agreed that “these opinions make clear that any disability that does not reach the required fifty-week threshold under Subsection 3 may not be considered in the determination of PTD.”  It also agreed with the Eastern District’s conclusion that the Supreme Court decisions did not answer the question at hand.  It then noted the Eastern District’s decision in Ryan, but ultimately disagreed with its holding: “Under strict construction, we cannot give Subsection 3 “broader application [or meaning] than is warranted by its plain and unambiguous terms.  Here, the plain and unambiguous language of Subsection 3 is that a disability 'equals' a minimum of fifty weeks of PPD compensation when, as relevant here, the compensable injury is worth fifty weeks of disability compensation."

Nor did the Southern District agree with the Eastern District's finding that the enhanced benefit was the “direct result” of a compensable injury, as required by subsection 2(a)(ii).  In a footnote, the Court cited the dissent in Ryan, who concluded that “the disability addressed by enhanced PPD, therefore, is not something that can be assigned to any one body part.”  Or, as the Court put it, “once the cake is baked, you cannot turn it back into the eggs you made it with.” 

Walton is being appealed, and it's likely the Supreme Court will eventually decide which District is correct. In the meantime, attorneys who represent injured workers' in this scenario should probably, if possible, have their experts address the synergistic effect without considering any injuries that may not qualify.

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