Case Title: Tenorio v. State ex rel. Wyoming Workers' Compensation Div

Citation: 

Docket Number: 96-14

State: wyoming

Court: Wyoming Supreme Court

Date: 1997-01-24T00:00:00Z

Document:
Tenorio v. State ex rel. Wyoming Workers' Compensation Div1997 WY 13931 P.2d 234Case Number: 96-14Decided: 01/24/1997Supreme Court of Wyoming
 
Francis TENORIO, Appellant (Claimant-Respondent),

v.

STATE of Wyoming, ex 
rel., WYOMING WORKERS' COMPENSATION DIVISION, Appellee (Petitioner).

 

Appeal from District 
Court, Laramie County, Nicholas G. Kalokathis, J.

Bernard Q. 
Phelan, Cheyenne, for appellant. 

William U. Hill, 
Attorney General; John W. Renneisen, Deputy Attorney General; Gerald W. Laska, 
Senior Assistant Attorney General; and Jennifer A. Evans; Assistant Attorney 
General, Cheyenne, for appellee.

Before 
TAYLOR, C.J., and THOMAS, MACY and LEHMAN, JJ., and ROGERS, District 
Judge.

TAYLOR, Chief 
Justice.

[¶1]      Appellant appeals 
the district court's reversal of the hearing examiner's order granting her 
permanent partial disability benefits. The district court found that the hearing 
examiner erred in refusing to consider the Wyoming Workers' Compensation 
Division's evidence of an intervening cause of injury and remanded the case for 
further consideration. We affirm the district court's decision.

I. ISSUES

[¶2]      Appellant, 
Francis Tenorio (Tenorio), presents the following issues for our 
review:

I

In a workers' 
compensation case, is an application for permanent partial disability, pursuant 
to W.S. § 27-14-405, an application for additional benefits based upon an 
"increase" in incapacity due solely to the injury pursuant to the "reopening" 
statute found at W.S. § 27-14-605?

II

Does the doctrine of res 
judicata preclude an inquiry regarding compensability of the injury after 
compensability has been determined regarding claims for medical and temporary 
total disability for the same injury?

[¶3]      Appellee, the 
Wyoming Workers' Compensation Division (the Division), phrases the debate as a 
single issue:

Whether the hearing 
examiner erred in ruling that the Division's payment of medical and temporary 
total disability benefits for a work injury estopped it from denying permanent 
disability benefits and relieved Claimant of her burden of proving her permanent 
physical impairment resulted from her work accident.

II. FACTS

[¶4]      Tenorio was 
injured in a work-related accident in January 1989. The Division paid for 
various medical treatments, including surgeries to Tenorio's cervical spine and 
shoulder. The Division also paid for temporary total disability during certain 
periods of time between 1989 and 1994. In early 1995, Tenorio reached maximum 
medical improvement and filed a claim for permanent partial disability of twenty 
percent. The Division contested Tenorio's claim, alleging that the permanent 
partial disability was not due solely to her work-related injury but was caused, 
at least in part, from a subsequent car accident in 1991.

[¶5]      A contested case 
hearing was held on April 25, 1995. The hearing examiner made no findings 
regarding the cause of the twenty percent disability; instead, he reasoned as 
follows:

The Division has raised 
the issue as to whether the employee/claimant's permanent impairment is a result 
of the industrial accident or exposure. As the Division has paid for the 
surgeries and temporary total disability in this case, the employee is not 
required to prove that her permanent physical impairment is a result of the 
industrial accident or work exposure.

[¶6]      The Division 
appealed the order granting benefits to the district court, which reversed the 
hearing examiner's decision on procedural and substantive grounds. The district 
court found that Tenorio's current claim for permanent partial disability should 
have been a petition for modification or additional benefits brought pursuant to 
Wyo. Stat. § 27-14-605 (1991), which requires a claimant to prove an increase in 
incapacity due solely to the work-related injury. Therefore, the district court 
determined that the hearing examiner erred when finding that Tenorio need only 
show "maximum medical improvement." The district court also found that the 
Division's previous payments for medical treatment and temporary total 
disability did not preclude the Division from raising the issue of intervening 
cause in the determination of whether the permanent physical impairment resulted 
solely from the work-related injury. Consequently, the district court reversed 
and remanded the case for further action. This timely appeal 
followed.

III. STANDARD OF 
REVIEW

[¶7]      The issues on 
appeal are a matter of law. Pursuant to W.R.A.P. 12.09, our review of an agency 
action is in accordance with Wyo. Stat. § 16-3-114(c)(ii)(A) (1990) which 
requires a reviewing court to "[h]old unlawful and set aside agency action, 
findings and conclusions found to be * * * [a]rbitrary, capricious, an abuse of 
discretion or otherwise not in accordance with law[.]" We accord no special 
deference to the conclusions of the district court, instead reviewing the action 
as if it came to us directly from the agency. Martinez v. State ex rel. Wyoming 
Workers' Compensation Div., 917 P.2d 619, 621 (Wyo. 1996); Wyoming Steel & 
Fab, Inc. v. Robles, 882 P.2d 873, 875 (Wyo. 1994). If the agency's conclusions 
of law are correct, its decision will be affirmed. Martinez, 917 P.2d  at 621; 
Matter of Corman, 909 P.2d 966, 970 (Wyo. 1996). If the agency has not invoked 
and applied the correct rule of law, we correct it. Martinez, 917 P.2d  at 621; 
Matter of Gneiting, 897 P.2d 1306, 1308 (Wyo. 1995).

IV. 
DISCUSSION

[¶8]      The parties take 
exception to the district court's comment that they "reexamine the procedural 
posture of this case" and on remand, bring Tenorio's claim as a request for 
benefit modification or increase under Wyo. Stat. § 27-14-605(a). The parties 
contend that Tenorio's first application for permanent benefits pursuant to Wyo. 
Stat. § 27-14-405 (1991) is a new claim for benefits which does not entail "an 
increase or decrease" in disability, but a determination as to the permanent 
effect of the original disability, thus rendering Wyo. Stat. § 27-14-605(a) 
inapplicable to this case. We agree.

[¶9]      Initially, we 
note that the determination of the claimant's rights is guided by the statute in 
effect at the time the injury occurred in January 1989. State ex rel. Director, 
Worker's Compensation Division v. Tallman, 589 P.2d 835, 838 (Wyo. 1979). As it 
does today, the Wyoming Worker's Compensation Act authorized several separate 
categories of benefits: medical benefits; temporary total disability benefits; 
permanent disability benefits; and death benefits. Wyo. Stat. §§ 27-14-401 
through 27-14-406 (1991). Wyo. Stat. § 27-14-605(a) generally set forth the 
basis for modification of, or an addition to, benefits which were previously 
awarded. We have characterized this provision as allowing a "reopening" of the 
claimant's case upon a showing of an increase or decrease in benefits, fraud, or 
mistake. Stockdale v. Transystems Services, Inc., 908 P.2d 980, 982 (Wyo. 
1995).

[¶10]   When a claimant sustains permanent 
impairment from the injury after receiving total temporary benefits, however, 
the legislature has expressly provided for a transition from temporary to 
permanent benefits. Wyo. Stat. § 27-14-404(c) mandates the cessation of payments 
for total temporary benefits when the employee's recovery is complete, or as in 
this case, when "[t]he employee has an ascertainable loss and qualifies for 
[permanent] benefits under W.S. 27-14-405 or 27-14-406." An "ascertainable loss" 
is 

that point in time in 
which it is apparent that permanent physical impairment has resulted from a 
compensable injury, the extent of the physical impairment due to the injury can 
be determined and the physical impairment will not substantially improve or 
deteriorate because of the injury[.]

Wyo. Stat. § 
27-14-102(a)(ii) (1991). Wyo. Stat. § 27-14-405(a) states, in relevant 
part:

Subject to W.S. 
27-14-602, upon receipt of a physical impairment rating * * * an employee shall 
receive compensation for specific losses provided by this section. * * * An 
employee shall not receive compensation authorized under this section while 
receiving benefits under W.S. 27-14-404 or 27-14-406.

Thus, Tenorio's 
case was not "reopened" under Wyo. Stat. § 27-14-605, but proceeded as 
specifically required by Wyo. Stat. §§ 27-14-404(c) and 27-14-405(a). 

[¶11]   Although Tenorio's request for 
permanent partial disability benefits under Wyo. Stat. § 27-14-405 arose after 
her award of temporary benefits, this does not relieve her of showing a causal 
relationship between the work-related injury and the permanent impairment. A 
worker's compensation claimant must prove each essential element of her claim by 
a preponderance of the evidence. Martinez, 917 P.2d  at 621; Pittman v. State ex 
rel. Wyoming Workers' Compensation Div., 917 P.2d 614, 617 (Wyo. 1996). To 
receive permanent partial disability benefits, Wyo. Stat. § 27-14-404(c) 
required Tenorio to show not only that she had suffered a permanent impairment 
which would not substantially change in the future, but also the extent to which 
the permanent impairment resulted from the compensable injury.

[¶12]   Tenorio contends that when the 
Division and her employer failed to object to her award of medical and temporary 
total disability benefits after knowledge of her car accident, any issue 
relating to the impact of the car accident on her work-related injury was 
necessarily decided in her favor. She argues that the uncontested award is a 
final determination as to all issues which could have been raised at that time. 
Tenorio's argument relies on Wyo. Stat. § 27-14-606 (1991), which 
provides:

Each determination or 
award within the meaning of this act is an administrative determination of the 
rights of the employer, the employee and the disposition of money within the 
worker's compensation account as to all matters involved. No determination shall 
be final without notice and opportunity for hearing as required by this 
act.

Thus, Tenorio 
concludes that the Division and her employer are precluded by the operation of 
res judicata and collateral estoppel from challenging the causation of her 
current claim.

[¶13]   The doctrines of res judicata and 
collateral estoppel incorporate "`a universal precept of common-law 
jurisprudence * * *'" that a right, question or fact put in issue, and directly 
determined by a court of competent jurisdiction, cannot be disputed in a 
subsequent suit by the same parties or their privies. Matter of Paternity of 
SDM, 882 P.2d 1217, 1220 (Wyo. 1994) (quoting Delgue v. Curutchet, 677 P.2d 208, 
213-14 (Wyo. 1984)).1 While the interests of finality 
served by these doctrines are the same, this court has carefully distinguished 
the two:

[A]lthough many cases 
speak of res judicata in the administrative context, they actually apply 
collateral estoppel. * * * Collateral estoppel is the appropriate doctrine since 
collateral estoppel bars relitigation of previously litigated issues. * * 
* Res judicata on the other hand bars relitigation of previously litigated 
claims or causes of action.

Slavens v. Board 
of County Com'rs for Uinta County, 854 P.2d 683, 685-86 (Wyo. 1993) (emphasis in 
original). Here, Tenorio's claim for permanent partial disability benefits is a 
new claim which has not been the subject of a previous determination. Martinez, 
917 P.2d  at 622; Herring v. Welltech, Inc., 660 P.2d 361, 366 (Wyo. 1983); see 
also Mattis v. Husky RMP Properties, Inc., 790 P.2d 1279, 1282 (Wyo. 1990). 
Rather, Tenorio argues that the issue of the impact of her car accident has 
reached finality. Therefore, res judicata does not apply and collateral estoppel 
is the appropriate doctrine for our consideration.

[¶14]   Generally, four factors are 
considered when determining the application of collateral estoppel:

"(1) whether the issue 
decided in the prior adjudication was identical with the issue presented in the 
present action; (2) whether the prior adjudication resulted in a judgment on the 
merits; (3) whether the party against whom collateral estoppel is asserted was a 
party or in privity with a party to the prior adjudication; and (4) whether the 
party against whom collateral estoppel is asserted had a full and fair 
opportunity to litigate the issue in the prior proceeding."

Kahrs v. Board 
of Trustees for Platte County School Dist. No. 1, 901 P.2d 404, 406 (Wyo. 1995) 
(quoting Slavens, 854 P.2d at 686). Tenorio correctly asserts that each of these 
factors are present in her case: the parties are the same; the Division's 
determinations post-1991 for full payment of total temporary disability benefits 
necessarily included the conclusion that the 1991 car accident did not have any 
impact on the extent of her injuries at that time; and her employer had numerous 
opportunities to fully and fairly litigate this issue each time a claim for 
benefits was received after the employer learned of the car 
accident.

[¶15]   However, as a common law doctrine, 
collateral estoppel may be modified in applicability and scope by statute. 
Astoria Federal Sav. and Loan Ass'n v. Solimino, 501 U.S. 104, 111 S. Ct. 2166, 
115 L. Ed. 2d 96 (1991); II Kenneth C. Davis and Richard J. Pierce, Jr., 
Administrative Law Treatise, § 13.3 at 256 (3rd ed. 1994). "Although 
administrative estoppel is favored as a matter of general policy, its 
suitability may vary according to the specific context of the rights at stake, 
the power of the agency, and the relative adequacy of agency procedures." 
Solimino, 501 U.S.  at 109-110, 111 S. Ct.  at 2170. "Courts do not * * * have free 
rein to impose rules of preclusion, as a matter of policy, when the 
interpretation of a statute is at hand." Id. at 108, 111 S. Ct.  at 
2169.

[¶16]   In this case, the right at stake is 
an award of future worker's compensation benefits based on an uncontested award 
of prior benefits. Pursuant to our holdings in Martinez, 917 P.2d 619 and 
Herring, 660 P.2d 361, we conclude that the legislature did not intend the 
Division's uncontested award of benefits to rise to the level of a "final 
adjudication" necessary to apply the doctrine of issue preclusion to outstanding 
claims for worker's compensation benefits.

[¶17]   In Herring, construing the 1983 
provisions of the Act, we held that an employer (and in turn, the Division) 
could not dispute that an injury was work-related when there has been an 
acknowledgment to the contrary and approval of benefit payments, except in those 
situations within the ambit of the "reopening" statute. Herring, 660 P.2d  at 
366. We further held, however, that the statutory right to a hearing for "each 
award of compensation or allowance of any expense claim" preserved the 
employer's right to challenge the propriety of future claims on the basis of 
causation. Id.

[¶18]   In Martinez, we found that the 
clear language of Wyo. Stat. § 27-14-606 and this court's decisions interpreting 
that statute required the employee/claimant to prove that he was entitled to 
receive benefits for all outstanding claims despite previous awards for 
the same injury.

It is true in the case at 
bar that the employer and the Workers' Compensation Division did not contest the 
compensability of the initial injury. In fact, the employer signed the consent 
and waiver form, consenting to the first payment of temporary total disability 
benefits to the employee. We agree that the employer and the Workers' 
Compensation Division were estopped from contesting the compensability of the 
initial injury * * *. However, as we explained earlier in this opinion, the same 
analysis does not apply to the employee's outstanding claims. Since each new 
claim or award involved a separate administrative determination under § 
27-14-606, the employer and the Workers' Compensation Division were entitled to 
contest the employee's outstanding claims by arguing that [another incident] 
caused his current disability.

Martinez, 917 P.2d  at 622 (emphasis added).

[¶19]   The application of collateral 
estoppel to the Division's uncontested determinations requires a legislative 
intent that the issue has reached "a final adjudication on the merits." To the 
contrary, however, we have recognized that to place finality on the employer's 
ability to dispute an employee's right to receive benefits on any further claims 
after the employee's first claim has been approved "would effectively nullify 
the provisions of § 27-14-606." Martinez, 917 P.2d  at 621. So too, we must 
recognize the legislature's intent to provide a distinct forum for "a final 
adjudication on the merits." When the legislature provided for a continuing 
right to notice and hearing with the submission of each claim, it provided a 
distinct forum for contested cases. In any contested case, "[t]he hearing 
examiner has exclusive jurisdiction to make the final administrative 
determination of the validity and amount of compensation payable under [the 
workers' compensation] act." Wyo. Stat. § 27-14-602(c) (1991). Were we to apply 
collateral estoppel to the uncontested factual determinations of the Division in 
future claims for benefits which are contested, we would nullify the 
legislature's express intent that the hearing examiner be the final arbiter on 
the merits of a contested case.

[¶20]   Tenorio argues that this 
construction ignores precedent in which we have given uncontested determinations 
the same deference as those which were contested. In Wyoming State Treasurer, 
Worker's Compensation Division v. Svoboda, 573 P.2d 417, 419-20 (Wyo. 1978), we 
held:

Whether a claim is 
adjudicated under the formal-dispute procedures, or informally by the clerk of 
the district court - where there is no employer objection - the character of the 
award as a judicial determination is not changed.

The basis for 
our holding was the necessary finality given to a judicial determination of the 
district court. However, in 1986, the entire Wyoming Workers' Compensation Act 
was revised. "As part of the 1986 revision, worker's compensation decisions were 
entrusted to the executive branch of government" and the term "judicial 
determination" was replaced with the term "administrative determination." State 
ex rel. Wyoming Workers' Compensation Div. v. Jerding, 868 P.2d 244, 248-49 
(Wyo. 1994). This represented a substantive change in the application of legal 
rules and principles. Id. Thus, collateral estoppel afforded to a judicial 
determination under the former statute does not necessarily apply to an 
administrative determination under the revised statute.

[¶21]   The test is whether the common law 
rule of preclusion would be consistent with the legislature's intent when 
enacting the Wyoming Workers' Compensation Act. Solimino, 501 U.S.  at 108, 111 S. Ct.  at 2169-2170. In addition to the specific provisions discussed above, the 
purpose of the Wyoming Workers' Compensation Act is to provide benefits as 
quickly and efficiently as possible to those employees who are lawfully entitled 
to receive them. Were the employer collaterally estopped from raising the issue 
of causation after approving the payment of an initial claim, an objection would 
arise whenever there was the slightest doubt as to causation. As a result, the 
swift payment of legitimate claims may be substantially delayed.

[¶22]   For these reasons, we hold that the 
application of collateral estoppel to the Division's uncontested award of 
benefits in subsequent proceedings for outstanding claims is contrary to the 
intent of the legislature. In so holding, we do not ignore Tenorio's legitimate 
concern that an employer may withhold its objection to benefits, the event which 
triggers the employee's right to a hearing, until the employee's witnesses are 
absent, their memories fade, or the evidence stale. While we do not disagree 
that the possibility of mischief is present, there is no evidence in this case 
that Tenorio was the victim of any such abuse.

[¶23]   In summary, the statutory language 
of the Wyoming Workers' Compensation Act confers finality on the benefits paid 
to the employee through uncontested determinations, subject to the exceptions 
found in Wyo. Stat. § 27-14-605. However, there is nothing in the statutory 
language that guarantees a claimant future benefits on the basis of a prior 
award. Neither is there any public policy which favors the payment of an 
unjustified worker's compensation claim.

[¶24]   In this case, the Division does not 
contest the compensability of Tenorio's original claim nor does it seek to 
retract any payments already made to Tenorio. The Division contests only future 
permanent partial disability payments. Therefore, the district court correctly 
concluded that Tenorio must prove that the extent of her current claim is the 
result of her work-related injury. Similarly, the effect of the subsequent car 
accident on the injuries claimed by Tenorio has not been the subject of a final 
adjudication on the merits before a hearing examiner. The previous failure to 
object to an award of benefits does not estop the presentation of evidence that 
Tenorio's car accident was the cause, or partial cause, of her current permanent 
disability.

V. CONCLUSION

[¶25]   The district court is affirmed and 
the order granting benefits entered by the hearing examiner is remanded for 
further action consistent with this opinion.

FOOTNOTES

1We have applied the doctrines of res 
judicata and collateral estoppel in worker's compensation claims adjudicated 
before the Office of Administrative Hearings. Matter of Worker's Compensation 
Claim of Hemme, 914 P.2d 824, 827 (Wyo. 1996); Stockdale, 908 P.2d  at 983; 
Matter of Swasso, 751 P.2d 887, 890-91 (Wyo. 1988). We have also held that the 
Division is estopped, subject to the provisions of Wyo. Stat. § 27-14-605(a), 
from redetermining the compensability of an injury as it relates to claims which 
have been approved or paid. Martinez, 917 P.2d  at 622; Herring v. Welltech, 
Inc., 660 P.2d 361, 366 (Wyo. 1983).