Wis.LIRC WC Decision: Erickson - October 31, 1994 - ND � 8.17 - Formal Hearing Procedure - Scope of issues on remand; ND� 9.3 - Mistake or Newly Discovered Evidence - Collateral estoppel or res judicata effect, previous decisions set aside based on mistake or new evidence and new decision issued; ND � 8.17 - Formal Hearing Procedure

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

KRISTIN ERICKSON, Applicant

CITY OF MENASHA PUBLIC WORKS, Employer

EMPLOYERS INSURANCE OF WAUSAU, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 90053201

Administrative Law Judge Edward W. J. Falkner issued his Findings of Fact and Order in this case on March 25, 1994, following a hearing on February 28, 1994. The employer and the insurer (collectively, the respondent) have submitted a petition for commission review of the administrative law judge's findings and order. Thereafter, both the respondent and the applicant submitted briefs. The respondents have previously conceded jurisdictional facts, a weekly wage of $454.40, and a compensable injury on July 13, 1989. The insurer had previously paid, pursuant to Administrative Law Judge Falkner's January 13, 1992 Order in claim no. 90-053201, temporary total disability to May 24, 1991 in the amount of $12,401.56 and permanent partial disability equal to 25 percent loss of use of the left ankle, $8,187.50. Subsequent developments after the hearing, relayed to the Labor and Industry Review Commission (the commission), caused the commission to remand this matter for further hearing and proceedings on the issues of causation, nature and extent of disability and liability for medical expenses. At or before the remand hearing, the parties stipulated that the following issues were not disputed: (a) causation of left ankle and leg problems out of the July 31, 1989 injury and (b) treatment expense out of that injury. Administrative Law Judge Falkner's Order dated January 13, 1992 is reaffirmed in that respect. The commission has carefully reviewed the entire record in this case, including the briefs submitted by the parties. The commission hereby sets aside the administrative law judge's Findings of Fact and Order and substitutes the following therefor:

MODIFIED FINDINGS OF FACT

1. Procedural posture.

The applicant was born in January 1953 and had been a sanitation worker for the employer for about five years at the time of her injury. She suffered a conceded work injury to her ankle on July 31, 1989, as she jumped down from a garbage truck.

As noted above, by Order dated January 13, 1992, Administrative Law Judge Falkner awarded 25 percent permanent partial disability compared with amputation at the ankle, as well as temporary total disability through May 24, 1991. Both parties appealed the decision, and the commission affirmed.

The parties also came before ALJ Falkner on the applicant's claim of an unreasonable refusal to rehire, claim no. 89-046079. ALJ Falkner found against the applicant and dismissed her application on that issue by decision dated September 10, 1992. The commission affirmed this decision on petition by the applicant.

However, two interesting points arose on the petition for commission review of the unreasonable refusal to rehire claim. First, the applicant asked the commission to send the case back for further hearing because, after ALJ Falkner's decision, the applicant was fired in January 1993. The commission refused, stating that the discharge in January 1993 could not establish an unreasonable refusal to rehire in 1991-92, the period covered in claim no. 89- 046079.

The second interesting point was that the applicant was released to work without restriction by her treating doctor in the summer of 1992. This obviously undercut the decision by ALJ Falkner, affirmed by the commission, in claim no. 90-053201 to the effect that the applicant had 25 percent permanent partial disability at the ankle with a healing plateau in May 1991.

The insurer wrote to the commission on this point during the commission review of the refusal to rehire allegation in claim no. 89-046079. The insurer stated that the applicant "changed her medical determination" to the effect that she recovered without disability. This change, the insurer contended, established that the applicant was not forthright about her condition. The insurer asked the commission to reconsider the applicant's disability claim in no. 90-053201 in light of the new disability rating.

The employer agreed with its insurer, and formally petitioned the commission to set aside its order in claim no. 90-053201 on the basis of the applicant's release without restriction or disability by her doctor. The employer contended the release was new evidence, and that the applicant's permanent partial disability claim having evaporated, the decisions of ALJ Falkner and the commission awarding the permanent partial disability were based on mistake of fact. The employer asked that the decision in claim no. 90-053201 be set aside, that the commission find the applicant was not entitled to permanent partial disability, and that the payment of permanent partial disability be reimbursed.

The applicant responded that the applicant's complete recovery was not new evidence, but a change in circumstance. She asked the commission let Administrative Law Judge Falkner's decision in claim no. 90-053201 stand. She also argued that if the commission considered her to have continued healing to the point of no disability, that it award temporary total disability during the renewed period of temporary disability until she reached her healing plateau.

On May 13, 1993, then, the commission issued two decisions. The first dealt with the refusal to rehire case and, as noted above, affirmed the dismissal of the application on that issue in claim no. 89-046079. The second dealt with the underlying disability case and set aside both Administrative Law Judge Falkner's decision in hearing no. 90-053201 and the commission's affirmance of that decision. The commission then remanded claim no. 90- 053201 to the department under sec. 102.18 (4)(c), Stats.

The commission's Remand Order specifically required further hearing and decision on the issues of causation, nature and extent of disability, and liability for medical expense. In other words, the remand order was written in broad language requiring the parties to start over on the issues of the nature and extent of disability in claim no. 90-053201. The remand hearing was noticed, scheduled and held on the issues of primary compensation and medical expense. In apparent recognition of the scope of the remand order, the parties stipulated that causation and amount of medical expense were not at issue. It is ALJ Falkner's decision on remand, dated March 25, 1994, that is now before the commission for review.

2. Evidence on remand.

The applicant presented two exhibits on remand. The first is a referral letter dated November 9, 1993, from the applicant's treating physician, Luther M. Strayer, M.D., to another doctor, Dr. Alt. The referral letter states:

"At some point in the fall of 1991, I was required to make a disability evaluation and felt that [the applicant] had a 13% permanent partial disability of the person as a whole, second to this injury, but as she is has [sic] continued to improve over time by June of 1992, I found that she was probably able to return to work. Her disability award which was given to her at that time, is now being protested by her employer and her lawyer is now seeking evaluation."

The applicant also submitted a report from Steven Alt, M.D., dated November 29, 1993, which stated:

"In my medical opinion, Dr. Strayer's clinical assumption in October of 1991 that [the applicant's] Achilles' problem had reached a healing plateau, failing to have improved further following nearly one year of conservative, non-surgical treatment, was indeed very reasonable. In addition, the documented medical circumstances at that time justified the estimation of permanent partial disability and the application of permanent physical restrictions.

"As can happen, in any given case, after the treating physician has reached the clinical conclusion that the patient's course has demonstrated a definite plateau in healing, the patient's condition having leveled off, with the prospect for future improvement, despite the application of any further treatment, is considered unlikely, never-the-less, a patient may go on to enjoy further healing and functional improvement without any further intervention. In the case of [the applicant], she did enjoy a further, renewed, spontaneous period of 'healing' or improvement and with the application of formal physical therapy, eventual, full recovery by August 1992."

The respondent submitted two exhibits. The first is a statement by Dr. Strayer in response to the employer's attorney stating that, as of August 17, 1992, the applicant's disability was zero, that she no longer had pain, and that she was capable of the "forceful pushing off" activities he had earlier restricted her from. The second is a note from Dr. Strayer dated June 25, 1992, stating:

"Has essentially no more discomfort. Basically has only minimal pain as she describes it. Is able to run, jump, do 100 one-legged step-ups with her left leg without discomfort. She has been working with physical therapy and restrengthening and thinks her strength is nearly normal although I do not have formal note from therapy.

"At this point in time, she has a chance to return to work as a common laborer in the City of Menasha and she thinks she can do this work. I think it is probably safe for her to do so as long as she tries to alternate any jumping or springing upward between both legs instead of concentrating all of the time on the left as she had in the past...."

Attached to this note is a release from Dr. Strayer allowing the applicant to return to work as a common worker on medium duty on July 1, 1992.

There was also some testimony at the remand hearing. Basically, the applicant said her pain lessened after May 24, 1991 (the healing plateau originally fixed in Administrative Law Judge Falkner's January 13, 1992 Order, but that between May and October 1991 she was in extreme pain, that by January 1992 she had improved enough to cause Dr. Strayer to remove the lift from her shoe, and that she had therapy until August 1992. She also testified that she was first offered reemployment by the employer in July 1992, and in fact worked as a relief bridge tender for various periods thereafter until she was returned to her pre-injury job in September 1992.

3. Analysis and decision.

Based on this record, the commission finds that the applicant continued to heal to the point of no disability, at a very gradual rate, until July 1, 1992. Because the applicant neither was offered work by the employer during this period nor worked for any other employer, she is entitled to temporary total disability during this healing period. Section Ind 80.47, Wis. Adm. Code. However, the permanent partial disability paid under the January 13, 1992 decision of ALJ Falkner, as affirmed by the commission, was overpaid.

The commission finds a July 1, 1992 end of healing for two reasons. First, the commission does not believe that the applicant's condition could have much improved beyond the extent described in Dr. Strayer's June 25, 1992 note. Second, the record does not indicate that the applicant was examined by Dr. Strayer between June 25 and August 17, 1992. Rather, the doctor rewrote his release because the applicant had completed physical therapy. Thus, the record contains basis for finding an improvement in her condition after July 1.

The commission therefore finds that the applicant is entitled to temporary total disability from May 24, 1991 to July 1, 1992 (57 weeks and 4 days). The applicant's weekly compensation rate for temporary total disability is $302.93 (two-thirds of $454.40). This results in an additional award for temporary total disability of $17,469.97.

However, from this award must be subtracted the amount overpaid in permanent partial disability of $8,187.50, leaving a net award for disability of $9,282.47. The applicant also approved an attorney fee of 20 percent under sec. 102.26, Stats. The percentage fee is based on the net award for disability thereunder. The fee is thus $1,856.49 (20 percent of $9,282.47). The fee shall be deducted from the applicant's award, leaving $7,425.98 payable to the applicant within 30 days.

Because the record indicates the applicant has reached an end of healing without disability, a final order is issued.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

ORDER

The decision of the administrative law judge dated January 13, 1992, is affirmed with respect to causation and medical treatment expense pursuant to stipulation by the parties. The decision of the administrative law judge on remand, dated March 25, 1994, is modified to conform to the foregoing and, as modified is affirmed. Within 30 days from the date of the decision, the employer and its insurer shall pay all of the following: (1) To the applicant, Kristin Erickson, the sum of Seven thousand four hundred twenty-five dollars and ninety-eight cents ($7,425.98) for permanent partial disability. (2) To the applicant's attorney, Mark V. Sewall, the sum of One thousand eight hundred fifty-six dollars and forty-nine cents ($1,856.49) as attorney fees.

Dated and mailed at Madison, WI October 31, 1994
101 : CD8000 ND � 8.17

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

James R. Meier, Commissioner

MEMORANDUM OPINION

a. The employer's position.

The employer objects to a memorandum in the administrative law judge's March 25, 1994 decision dealing with the applicant's new unreasonable refusal to rehire claim. As part of ALJ Falkner's decision, the memorandum opinion is set aside under this decision. The commission's decision in this case does not address any issues on the applicant's refusal to rehire claim.

b. The insurer's position.

The insurer argues that the remand order was limited in scope, and in effect permits only new evidence to establish that the applicant was not permanently disabled. The insurer contends the commission should not consider evidence that the healing period should be extended. It argues that Administrative Law Judge Falkner's decision should be rewritten to deny permanent partial disability and award no new temporary total disability. In essence, the insurer contends the remand hearing should have been limited to discrediting Dr. Strayer's first opinion, thus creating a legitimate doubt concerning compensation for disability, and should not have attempted to determine the actual nature and extent of the applicant's disability.

However, that was not the intent of the remand order nor were the terms of the remand order limited as the insurer suggests. Indeed, the remand order used the broadest possible language to allow all issues to be reconsidered.

c. The applicant's position.

The applicant's position is close to the reverse of the insurer's. She claims that the permanent partial disability award may not be disturbed, but the only issue on remand was whether she should get additional temporary disability as well. The commission rejects this argument for the same reasons it rejects the insurer's.

d. Collateral estoppel/res judicata and remand under sec. 102.18 (4)(c), Stats.

Both the applicant and insurer advance collateral estoppel and res judicata arguments. In essence, the applicant and the insurer each want the commission to change some part of Administrative Law Judge Falkner's January 13, 1992 Order while arguing that other parts may not be changed. They simply disagree on which parts. The logical inconsistency here is apparent.

Lengthy discussion of these arguments is unnecessary, given the commission's remand under sec. 102.18 (4)(c), Stats., in this case. That statute specifically authorizes the commission, on the grounds of mistake or new evidence, to set aside a decision, take new evidence, and issue a new decision. Because ALJ Falkner's January 13, 1992, decision and the commission decision affirming it were later set aside, those decisions have no collateral estoppel or res judicata effect.

e. One last point.

In an earlier brief to the commission the employer suggested the administrative law judge was lazy in accepting the treating doctor's opinion "by default." In the commission's memorandum opinion dated May 14, 1992, the commission stated that it found the administrative law judge's analysis was not lazy. The administrative law judge then read the employer's brief and wrote them a note saying he did not like being called lazy. The employer now claims it was therefore denied due process in subsequent proceedings before this same administrative law judge on the grounds of bias. However, the commission reviewed this case under its independent authority as fact finder and reaches the same result as the administrative law judge. It sees no evidence of bias.

cc: ATTORNEY JAMES R MACY
GODFREY & KAHN SC

ATTORNEY MARK V SEWALL
SIGMAN JANSSEN STACK WENNING & SUTTER

ATTORNEY JOHN S WILLIAMSON JR

ATTORNEY JENNIFER LEE EDMONDSON
STILP & WELLS

NOTE: This decision was subsequently amended as follows:

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

KRISTIN ERICKSON, Applicant

CITY OF MENASHA PUBLIC WORKS, Employer

EMPLOYERS INSURANCE OF WAUSAU, Insurer

WORKERS COMPENSATION DECISION
Claim No. 90053201

AMENDED ORDER

Pursuant to sec. 102.18 (4) (b) and (c), Stats., the commission amends its decision in this matter dated October 31, 1994, as follows:

1. Delete the last sentence in the second full paragraph on page 8, and substitute:

"Thus, the record contains no basis for finding an improvement in her condition after July 1."

2. In the first subparagraph of the DECISION paragraph, delete "for permanent partial disability."

Dated and mailed November 2, 1994