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

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1997-12-22T00:00:00Z

Document:
State ex rel. Wyoming Workers' Compensation Div. v. Gerdes1997 WY 153951 P.2d 1170Case Number: 96-176Decided: 12/22/1997Supreme Court of Wyoming

STATE 
of Wyoming, ex rel., WYOMING WORKERS' COMPENSATION DIVISION,

Appellant (Petitioner),

v.

Debra L. GERDES, Appellee 
(Respondent).

 

          
                       

 

 

Appeal from The Workers' Compensation 
Division.

  

 

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 Appellant.

 Bert T. Ahlstrom, Jr., Cheyenne, for 
Appellee.

 

Before TAYLOR, C.J., and THOMAS, 
MACY and LEHMAN, JJ., and CARDINE, J. (Retired).* 

  * CARDINE, Ret.J., deceased July 22, 
1997.

 

    TAYLOR, Chief 
Justice. 

  [¶1]      Appellee sustained a work-related knee 
injury in November 1993, for which she received temporary total disability 
payments through June 1995. The Wyoming Workers' Compensation Division 
denied further benefits on June 9, 1995, 
after receiving a letter from appellee's doctor which stated she had reached 
maximum medical improvement. Appellee objected, and after a hearing before the 
Office of Administrative Hearings, the hearing examiner awarded retroactive 
benefits and ordered benefits to continue on the condition that appellee schedule 
future surgery.  The Workers' 
Compensation Division appealed, claiming that the retroactive award was 
precluded by appellee's failure to comply with statutory filing requirements while her case was 
pending before the Office of Administrative Hearings, and that future benefits 
were not appropriate. The Workers' Compensation Division also claims that the 
hearing examiner's decision was not supported by sufficient 
evidence.

 

 [¶2]        We affirm the hearing examiner's 
award of retroactive benefits, and reverse and remand that portion of the award 
which encompassed prospective benefits.

 

I. ISSUES

 

 [¶3]        Appellant, State ex rel. Wyoming 
Workers' Compensation Division (Division), presents two issues for review, which 
are essentially echoed by appellee:

 

    A. Whether the Office of 
Administrative Hearings order awarding prospective and 
retroactive temporary total 
disability benefits, for which no claims had been filed, is in accordance with 
law.

 

    B. Whether the Office of 
Administrative Hearings order awarding temporary total disability 
benefits is supported by 
substantial evidence.

 

  

II. FACTS

 

  [¶4]      In November 1993, while employed at 
Magic City Enterprises, appellee, Debra L. Gerdes (Gerdes), suffered a 
compensable injury to her left knee. Following her injury, Gerdes underwent four 
arthroscopic surgeries, the last two 
performed by Dr. David A. Kieffer. The surgeries did little to alleviate her 
condition, which was complicated by a back injury she sustained in a 1992 car 
accident.

 

  [¶5]      Gerdes received temporary total 
disability benefits from the time of her 1993 injury until June 7, 1995. On that 
date, Dr. Kieffer wrote the Division stating he had examined Gerdes and that her 
condition had reached maximum medical improvement. Dr. Kieffer recommended she 
consult with the Division of Vocational Rehabilitation for possible training and suggested 
Gerdes be evaluated for assignment of a permanent partial impairment 
rating.

 

  [¶6]      The Division sent Gerdes a final 
determination letter dated June 9, 1995, notifying Gerdes that the temporary 
total disability benefits were terminated as of June 7, 1995 because she had 
reached maximum medical improvement. The final determination informed Gerdes she 
would be contacted regarding a future 
evaluation for permanent partial disability benefits. The letter concluded with 
notification that she had a right to contest the determination by written 
objection on or before July 5, 1995.

 

  [¶7]      Gerdes objected to the final 
determination by letter dated June 29, 1995. Her letter stated that after 
consultation with Dr. John E. Winter, she had been referred to Dr. Wayne Gersoff 
at Rose Medical Center in Denver, 
Colorado. On that basis, she specifically denied she had reached maximum medical 
improvement.  The case was referred 
to the Office of Administrative Hearings on July 3, 1995 and a hearing was held on September 19, 
1995.

 

  [¶8]      At the hearing, Gerdes testified she was 
in considerable and constant pain and was told by Dr. Gersoff that her condition 
may improve with further surgery. She also testified that surgery had not been 
scheduled due to the Division's verbal denial of compensability. Gerdes 
testified she had formerly worked as a filling station clerk and an office clerk, but was 
currently unable to work or perform her former job at Magic City Enterprises.

 

  [¶9]      Gerdes also presented documentary 
evidence, including: a letter from Dr. Kenneth A. Pettine, dated May 30, 1995, 
which stated her back injury and knee injury "continue[] to be symptomatic" and 
had caused her to fall on several 
occasions; Dr. Winter's report, written June 14, 1995; and Dr. Winter's referral 
to Dr. Gersoff, dated June 29, 1995. Gerdes also submitted Dr. Gersoff's report, 
which stated:

 

    IMPRESSION: I explained to 
Debbie that she certainly does have a very difficult situation. I explained 
to her that I certainly have a 
great deal of concern about what her expectations might be after any 
type of knee surgery. I thought 
that her best option at this point would probably be to repeat 
the arthroscopy with repeat 
debridement and to further assess the patellofemoral joint area; and at the 
same time also do a tibial tubercle 
transfer to try to eliminate some of the * * * discomfort and 
also probably give her more 
stability * * *. The last resort would possibly be a patellectomy but 
I certainly discouraged her from 
this because of the negative impact it will have on her function. I 
also described to her that it 
really is an end-stage procedure.

 

    PLAN: She would like to 
consider her options and will get back to us. I informed her that I will send 
a copy of this note to Dr. 
Winter.

 

  [¶10] 
  In addition to the June 7, 
1995 letter from Dr. Kieffer, the Division rebutted Gerdes' evidence with a 
report from an independent medical examination, conducted at the request of the 
Division, which determined Gerdes had reached maximum medical improvement with a 
three percent whole person permanent impairment and was able to work in a "sedentary" 
job.

 

  [¶11] 
  The hearing examiner 
concluded that Gerdes' testimony and the report from Dr. Gersoff were 
persuasive, and that additional surgery may "improve her function and reduce the 
disabling effects of her compensable 
injury." The hearing examiner also found that the temporary total disability benefits should be paid for the period 
prior to the hearing. In addition, Gerdes was awarded continuing benefits on the 
condition she schedule the additional recommended surgery.

 

  [¶12] 
  At that point, the Division 
objected, contending that Gerdes had not appropriately filed claims pursuant to 
Wyo. Stat. § 27-14-404(d) (Cum.Supp. 1993) during the pendency of the contested 
case. The hearing examiner rejected this argument.  Noting that the Division's final 
determination letter did not state that 
Gerdes must continue to file for benefits during the pendency of her appeal in 
order to preserve her claim, the hearing examiner determined that the Wyoming 
Worker's Compensation Act did not require the application of Wyo. Stat. § 
27-14-404(d) after notification that benefits were terminated and the matter referred for 
hearing.

 

  [¶13] 
  The written order awarding 
benefits issued on December 6, 1995.  
The Division filed a timely appeal to the district court, which was 
certified to this court pursuant to W.R.A.P. 12.09(b).

 

III. STANDARD OF REVIEW

 

  [¶14] 
  Our standard of review of 
the hearing examiner's factual findings is well settled:

 

    "If, after examining the 
entire record, we find substantial evidence to support the agency's 
finding, we will not substitute our 
own judgment for that of the agency. Instead, we will uphold the 
agency's finding. Substantial 
evidence is relevant evidence which a reasonable person might accept as 
supporting     the agency finding. * * * In 
addition, we examine only the evidence which favors the prevailing 
party, allowing every favorable 
inference, while omitting consideration of any conflicting evidence. * * 
*"

 

      * * 
*

 

    This rule clearly 
encompasses the proposition that the reviewing court does not reweigh the 
evidence. On judicial review of an 
agency determination, the burden * * * is assigned to the appellant 
to demonstrate that the agency's 
findings and conclusions are not supported by substantial evidence.

 

Wyoming Steel & Fab, 
Inc. v. Robles, 882 P.2d 873, 876 (Wyo. 1994) (quoting Sinclair Trucking v. 
Bailey, 848 P.2d 1349, 1351 (Wyo. 1993)).

 

 [¶15]     While the reviewing court may not 
substitute its judgment for that of the agency when reviewing findings of fact, 
a similar precept does not apply to agency conclusions of law. An agency's 
conclusions of law will be affirmed only if they are in accordance with law. 
Matter of Cordova, 882 P.2d 880, 882 (Wyo. 
1994); Aanenson v. State ex rel. 
Wyoming Worker's Compensation Div., 842 P.2d 1077, 1079 (Wyo. 1992) (quoting 
State ex rel. Wyoming Workers' Compensation Div. v. White, 837 P.2d 1095 (Wyo. 
1992) and Employment Security Com'n v. 
Western Gas Processors, Ltd., 786 P.2d 866, 871 (Wyo. 1990)). Where the 
determination to be reviewed is a mixed question of law and fact, the reviewing 
court will defer to the agency's 
findings of basic fact, but will correct misapplication of the law to those 
facts. Aanenson, 842 P.2d  at 1080 (quoting Union Pacific R.R. Co. v. State Bd. 
of Equalization, 802 P.2d 856, 860-61 (Wyo. 1990)).

 

IV. DISCUSSION

 

    A. APPLICATION OF WYO. STAT. 
§ 27-14-404(d) TO PENDING CONTESTED CASES

 

 [¶16]     The Division claims that because 
Gerdes did not file claim certification pursuant to Wyo. Stat. § 27-14-404(d) 
while her contested claim was pending, the hearing examiner had no authority to 
award benefits for that time period. Wyo. Stat. § 27-14-404 provides, in 
relevant part:

 

      (a) If after a 
compensable injury is sustained and as a result of the injury the employee is 
subject to temporary total 
disability as defined under W.S. 27-14-102(a)(xviii), the injured employee is 
entitled to receive a temporary 
total disability award for the period of temporary total disability as provided 
by W.S. 
27-14-403(c).

 

      * * 
*

 

      (c) Payment 
under subsection (a) of this section shall cease if:

  

        (i) 
Recovery is complete to the extent that the earning power of the employee at a 
gainful occupation for which he is 
reasonably suited by experience or training is substantially 
restored;

      
or

 

(ii) The employee has an ascertainable loss1 and qualifies for benefits under 
W.S. 27-14-405 or 27-14-406.

 

      (d) * * * 
Benefits under subsection (a) of this section shall not be paid 
if:

 

        (i) 
An employee or his personal representative fails to file a claim for benefits 
within thirty (30) days after the 
first day immediately succeeding the first thirty (30) days of 
any certified period of temporary 
total disability;

 

        (ii) 
A claim is filed without the signature of the claimant and certification by the 
attending health care 
provider[.]

 

See also Wyoming Workers' 
Compensation Rules, Regulations and Fee Schedules, ch. 5, § 2(a)(i) (1995) (a 
claim for temporary total disability ("TTD") must be filed within sixty days 
after the first day of certified temporary total 
disability).

 

 [¶17]     Although the language of Wyo. 
Stat. § 27-14-404(d) is unambiguous as applied to ongoing temporary total 
disability claims, the statute is silent as to whether these procedural 
requirements apply after benefits are terminated and the claimant awaits a 
contested case hearing. Therefore, we must discern whether the legislature 
intended the statutory requirements in Wyo. Stat. § 27-14-404(d) to apply while 
an objection to the Division's final 
determination is pending. Painter v. State ex rel. Wyoming Workers' Compensation 
Div., 931 P.2d 953, 954-55 (Wyo. 
1997).

 

  [¶18] 
  Our method of statutory 
construction was set forth in detail in Parker Land and Cattle Co. v. Wyoming 
Game and Fish Com'n, 845 P.2d 1040, 1042-45 (Wyo. 1993), where we 
stated:

 

    We read the text of the 
statute and pay attention to its internal structure and the functional 
relation between the parts and the 
whole. * * * If an ambiguous statute has been construed by an 
agency charged with administering 
it, we will accord deference to, but are not bound by, that construction. After all, the final construction of an 
ambiguous statute is a question for the court.

 

After examining the Wyoming 
Worker's Compensation Act as a whole, looking at the component parts as well as 
its purposes and underlying policy considerations, we conclude that the 
procedures mandated in Wyo. Stat. § 27-14-404(d) do not apply to claims which 
accrue during contested case proceedings.

 

 [¶19]     Pursuant to the legislature's 
specific direction, the Wyoming Worker's Compensation Act must be construed to 
assure "the quick and efficient delivery of indemnity and medical benefits to 
injured and disabled workers" and that 
"benefit claims cases be decided on their merits * * *." Wyo. Stat. § 27-14-101 
(1997). We do not doubt that the quick and efficient delivery of ongoing 
temporary total disability benefits is aided by mandatory filings pursuant to 
Article 4, Employee Benefits, Wyo. Stat. §§ 27-14-401 through 27-14-408 (1993), and Article 5, Claim 
Procedure, Wyo. Stat. §§ 27-14-501 through 27-14-511 (1993). See Higgins v. 
State ex rel. Wyoming Workers' Compensation Div., 739 P.2d 129, 133 (Wyo.), 
cert. denied, 484 U.S. 988, 108 S. Ct. 508, 98 L. Ed. 2d 507 (1987). Periodic 
certifications allow the Division to effectively monitor entitlement to these 
benefits in the presence of a substantial number of continuing claims. However, 
the purpose of the procedural requirements of Wyo. Stat. § 27-14-404(d) does not 
appertain to the period following a final determination that benefits be 
terminated. After a final determination, no number of filings or certifications 
will reinstate the benefits or allow the claim to be heard on its 
merits.

 

  [¶20] 
  The purpose of awarding 
temporary total disability benefits is to provide income for an injured employee 
while he or she recovers. We have recognized that the legislature intended 
workers who are temporarily injured to 
be compensated until their earning power is substantially restored. Sims v. State ex rel. Wyoming 
Workers' Compensation Div., 872 P.2d 555, 557 (Wyo. 1994) (quoting State ex rel. 
Wyoming Workers' Compensation Div. v. Ohnstad, 802 P.2d 865, 867 (Wyo. 1990)). A 
final determination terminating these benefits triggers the employee's duty to 
submit a timely objection, thereby 
removing the case to a "contested" status, governed by the provisions of Article 
6 of the Wyoming Worker's Compensation Act. Under Article 6, the hearing 
examiner has exclusive jurisdiction to determine the merits of the case. Wyo. 
Stat. § 27-14-602(c) (Cum.Supp. 1993). The claimant must come to the hearing prepared to prove substantive entitlement 
to continued benefits. Martinez v. State ex rel. Wyoming Workers' Compensation 
Div., 917 P.2d 619, 621 (Wyo. 1996); Higgins, 739 P.2d  at 131. Thus, the 
claimant must show that he or she meets the conditions set forth in Wyo. Stat. § 
27-14-404(c). Sims, 872 P.2d  at 557; see 
also Ohnstad, 802 P.2d  at 867 and Pacific Power and Light v. Parsons, 692 P.2d 226, 228 (Wyo. 1984). If the claimant prevails on the merits at the hearing, 
retroactive benefits may be awarded. Higgins, 739 P.2d  at 
133.

 

  [¶21] 
  While the Division claims 
that the filing requirements are necessary in order "to monitor the conditions 
of all injured employees applying for disability benefits," literal compliance 
with the statute demands more than can reasonably be expected of a prudent 
person in the assertion of his or her rights. "In the last analysis, because it is the claimant's rights 
whose destruction is at stake, the decisive test ought to be the reasonableness of his or her belief and conduct." 7 
Arthur Larson, Workers' Compensation Law, § 78.43(l) at 15-371 
(1997).

 

  [¶22] 
  The Division fails to state 
why the procedural filing requirements are necessary after it has terminated 
benefits.  Instead, it relies on the 
mandatory nature of the statutory language to provide a procedural bar. However, 
the Division does not claim it lacked notice that Gerdes was seeking continuing 
benefits during the pendency of the 
case. Neither is this a situation where the claimant sought additional 
compensation or asserted injury not within the scope of her original claim and 
objection. In fact, the Division does not suggest any adverse effect due to 
Gerdes' failure to comply with the procedural requirements of Wyo. Stat. § 27-14-404(d). To the 
contrary, the record shows that the Division received letters and reports from 
medical providers during the pendency of the case. In addition, Gerdes complied 
with the Division's request to undergo an independent medical examination two 
weeks before the date of the hearing.

 

  [¶23] 
  The strict application of 
Wyo. Stat. § 27-14-404(d) would serve only to burden a claimant with the 
attendant costs of continued certification, even though the Division has 
predetermined that these costs are not 
compensable. Thus, the application of the procedural requirements found in 
Article 4 of the Wyoming Worker's Compensation Act during the pendency of a 
contested case does not further efficient service to an injured claimant, but 
rather prevents a meritorious claim from being decided based on the merits of the case.

 

 [¶24]     We therefore find that the hearing 
examiner was not precluded from awarding retroactive benefits to Gerdes. 
However, the Wyoming Worker's Compensation Act does not authorize the hearing 
examiner's award of claims which accrue 
after the hearing date.  The hearing 
examiner is limited to the issues which exist at the time of the hearing. Thus, 
to the extent that the hearing examiner's award ordered payment of benefits 
which accrued after the date of the hearing, the award is reversed and remanded 
for modification in accord with our holding.

 

    B. SUFFICIENCY OF THE 
EVIDENCE

 

 [¶25]     Although the Division concedes 
that Gerdes presented sufficient evidence to support her assertion that she had 
not reached maximum medical improvement, the Division contends she failed to 
present evidence that her earning power 
had not been substantially restored. See Wyo. Stat. § 27-14-404(c)(i). "[I]f 
gainful employment permits the employee to earn income while recovery from an 
injury occurs, there is no necessity for the temporary disability benefits to 
substitute for such income."  
Shassetz v. State ex rel. Wyoming Workers' Safety and Compensation Div., 
920 P.2d 1246, 1250 (Wyo. 1996). However, "if a claimant is unable to perform 
remunerative work with reasonable consistency, without pain and discomfort, 
temporary disability is deemed total." Pacific Power and Light, 692 P.2d  at 
229.

 

 [¶26]     A review of the record indicates 
sufficient evidence to support the hearing examiner's conclusion that Gerdes 
remained temporarily totally disabled at the time of the hearing. The letter 
from Dr. Kieffer recommends vocational rehabilitation for training in a 
different occupation, and Dr. Gersoff notes a "great deal of patellofemoral pain 
* * *." The report submitted after the independent medical examination states 
that Gerdes is able to return to a 
sedentary job, but the job must allow for "mixed sitting and standing" and 
requires total restriction on "kneeling or stooping" while at work. At the 
hearing, Gerdes testified she had previously worked as a clerk at a gasoline 
station and had secretarial experience, but was unable to work at the present time. She also testified she continued to 
be in considerable pain and had "fallen down" on several occasions due to her 
injury.

 

  [¶27] 
 We find that the record 
contains sufficient evidence to support the conclusion that Gerdes was unable to 
work with reasonable consistency without pain and discomfort. Therefore, the 
retroactive award of temporary total disability benefits is 
affirmed.

 

V. CONCLUSION

 

 [¶28]     The procedural requirements of 
Wyo. Stat. § 27-14-404(d) do not apply during the pendency of a contested case, 
and the hearing examiner may properly award retroactive temporary total 
disability benefits if the claimant 
prevails on the merits. The record contained sufficient evidence to support the 
hearing examiner's conclusion that Gerdes had not reached maximum medical 
improvement, nor had her earning power been substantially restored. To the 
extent that the order contained an award of prospective benefits, the order is reversed and 
remanded for modification in accord with this opinion.

 

  

FOOTNOTES

1 
"Ascertainable loss" is a term specifically defined in the Wyoming Worker's 
Compensation Act and is commonly measured at the point of 
"maximum medical improvement." Wyo. Stat. § 27-14-102(a)(ii) (Cum.Supp. 
1993).