Case Title: Mitchell v. BWK Joint Venture

Citation: 560 P.2d 1292

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 1977-02-22T00:00:00Z

Document:
560 P.2d 1292 (1977) Raymond MITCHELL, Claimant-Appellee, v. BWK JOINT VENTURE, Employer-Appellant, and Hawaiian Insurance & Guaranty Co., Insurance Carrier-Appellant. No. 5753. Supreme Court of Hawaii. February 22, 1977. *1294 W.K. Watkins, Jr., Honolulu, for employer-appellant and insurance carrier-appellant. Ralph E. Corey, Honolulu, for claimant-appellee. Before RICHARDSON, C.J., and KOBAYASHI, OGATA, MENOR and KIDWELL, JJ. OGATA, Justice. This is an appeal by BWK Joint Venture, employer-appellant, and Hawaiian Insurance & Guaranty Co., insurance carrier-appellant (hereinafter referred as appellants) from a decision and order of March 25, 1974, made by the Labor and Industrial Relations Appeals Board of the State of Hawaii (hereinafter board) and from a subsequent order of May 29, 1974, made by the board denying a petition for reconsideration. The decision and order of the board held that the scrotal hydrocele which Raymond Mitchell, claimant-appellee (hereinafter appellee), experienced was causally related to an industrial accident involving appellee and that he was entitled to certain medical as well as compensation benefits. We affirm. There is no question that appellee was injured in an industrial accident on January 10, 1970. He was then employed by BWK Joint Venture as a boilermaker at the Hawaiian Electric Kahe Power Plant. He was struck in the lower abdomen and pubic region by heavy boiler tubes weighing between 1200 pounds to 1500 pounds, as they were being hoisted. He was stunned by the impact and while returning home from work that afternoon he felt pain in his back, left hip and leg. The next day he had difficulty getting out of bed. Because of severe pain in his left low back and his left leg, he reported the injuries to his employer on Monday, January 12, 1970.[1] Appellee has not been gainfully employed since that time, except for five days in 1971, when he was employed by Chicago Bridge & Iron Company. By decision of the Director of Labor and Industrial Relations, dated November 24, 1970, the appellee was found to have sustained personal injury by accident arising out of and in the course of his employment on January 10, 1970. The director stated that the nature of this injury was "degenerative arthrosis of lumbosacral spine," and appellee was awarded temporary total disability benefits from January 12, 1970, to March 22, 1970, and from March 25, 1970, to April 7, 1970. He was also awarded 1% permanent partial disability of the whole man. No appeal was taken from this order. Thereafter, appellee did not seek medical aid until he went to see Dr. R.J. Parker, a chiropractor, on February 18, 1971, who treated him for his back condition as well as for his scrotal hydrocele. On March 25, 1971, appellee informed the Workers' Compensation Division that he had been receiving treatments from Dr. Parker; that these treatments were made necessary because of the injuries he sustained on January 10, 1970. The director then issued his decision on November 2, 1971, in the form of a supplemental award awarding temporary total disability benefits to the appellee, beginning April 30, 1970, to March 24, 1971, and from March 30, 1971, through such time *1295 as is determined by the director that such disability ends. However, on November 16, 1971, at the request of the appellants, who claimed that HRS § 386-89 (1975 Supp.) required a showing of substantial evidence that there has been a change in or a mistake in the determination of a fact concerning claimant's physical condition, the director reopened his decision of November 2, 1971, for further reconsideration. On August 16, 1972, after further hearing, the director issued his decision in which he found that appellee "had suffered a recurrence of symptoms of the industrial injury of January 10, 1970." The decision also noted that the director had rendered a decision on November 2, 1971, holding the employer liable to pay benefits, but that decision had been reopened on the appellants' asserted grounds that appellee's condition had not changed and that the award of November 24, 1970 should not have been reopened. Appellants' contention that appellee's hydrocele was non-industrial was also noted in that decision. The director found that the appellee was totally disabled from April 30, 1970, through March 24, 1971; from March 30, 1971, through May 11, 1972, and at the hearing on May 11, 1972, he found that appellee was and continued to be totally disabled from work. The decision of the director held the employer liable to pay to the appellee total disability compensation benefits from April 30, 1970, through March 24, 1971, and from March 30, 1971, to such date as the disability ends. The decision further found that there was no evidence to show that appellee was injured while he was employed by Chicago Bridge & Iron Company, and, therefore, it was exonerated from appellee's claim for compensation.[2] Although appellants again requested the director to reopen his last decision under the provisions of HRS § 386-89 (1975 Supp.), the appellants were notified by the director that their request for reopening would be treated as a notice of appeal to the board. On March 25, 1974, the board rendered its written decision and order in which it held that after appellee's industrial accident of January 10, 1970, he developed a scrotal hydrocele which was causally related to the industrial accident; that appellee's hydrocele had been corrected by surgery; that all medical and hospital bills received by appellee from February 1971 to December 1972 for the treatment of his low back and hydrocele, including surgery, are within the scope of coverage as defined in HRS ch. 386; and that appellee's second hydrocele is not related to the industrial accident. The board further concluded that the director's ruling on November 24, 1970, on temporary total disability was final; that appellee was not entitled to temporary total disability for the period following the director's initial award and prior to February 12, 1971; that appellee was found to be temporarily totally disabled between February 12, 1971, and December 28, 1972; and that appellee was not totally disabled within the meaning of the Workers' Compensation Act after December 28, 1972, through December 1973. The decision and order provided that since the appellee prevailed on the most important issue on appeal, the appellee was entitled to recover his attorney's fees and costs. It further ordered a remand of this case to the director for further investigation and determination of appellee's disfigurement and permanent disability. On January 31, 1974, appellants filed with the board Employer's Proposed Decision and Order and Supporting Memorandum, under which appellants proposed to the board 58 separate findings of fact. The proposed decision and order also contained the appellants' recommended conclusions of law. The board in its decision and order of March 25, 1974, rejected appellants' proposed findings 12-23, 25-27, 30-37, 39, 41, 43-44, 48-55, and 57, for the reason that these findings of fact had been disapproved *1296 by the board or were repetitious of testimony which was already in evidence regardless of whether or not the repetition was accurate. Appellants contend that the wholesale rejection of their proposed findings by the board is contrary to HRS § 91-12, which requires a ruling on each proposed finding, as follows: Appellants also assert that the board did not take into consideration and did in fact reject their proposed findings 42, 47, and 56, which were expressly indicated in the board's decision and order as having been accepted and incorporated by reference into the decision. For this reason they further contend that the board violated HRS § 91-12. In In re Terminal Transportation, Inc., 54 Haw. 134, 504 P.2d 1214 (1972), we said with respect to the requirement of HRS § 91-12, that "the agency shall incorporate in its decision a ruling upon each proposed finding so presented" by any party: 54 Haw. at 139, 504 P.2d at 1217. In NLRB v. Sharples Chemicals, Inc., 209 F.2d 645 (6th Cir.1954), the respondent had submitted 53 proposed findings to the NLRB. Of such findings 20 were accepted by the Board and remainder rejected. Section 8(b) of the Administrative Procedure Act required the agency to rule on each proposed finding and to include in the record a statement of the reasons and basis for its decision. The respondent contended that the Board violated this section. In regard to this contention the court stated: 209 F.2d at 652-653. See also American President Lines, Ltd. v. N.L.R.B., 340 F.2d 490 (9th Cir.1965). From the foregoing, we are satisfied that the board did not commit error in rejecting appellants' proposed findings of fact. However, appellants further argue that the rejection by the board of proposed findings 32-36, 39, 41-44, 47-48 and 51-57, was arbitrary and capricious. We disagree. Proposed findings 32-36, summarized in detail the testimony of one of appellants' expert medical witnesses, Dr. Herbert Luke. Essentially, his testimony was that because there was no indication in the medical record of any direct blow to claimant's genitalia when he was struck by the boiler tubes, the hydrocele that developed subsequently could not have been caused by that industrial accident. Proposed findings 39 and 41-43 related to testimony of Dr. Andrew Morgan, which also outlined his testimony in detail, similar in form to proposed findings 32-36. Dr. Morgan testified that his medical opinion was that appellee had a chronic inflammatory hydrocele, while Dr. Luke testified that his medical opinion was that appellee's hydrocele was caused by congenital conditions. Proposed findings 44 and 47 are also simply the summary of the testimony of Dr. R.J. Parker, chiropractic doctor, who appeared in appellee's behalf. The remaining proposed findings, 48 and 51-57,[3] related to testimony furnished by Dr. Cesar de Jesus, who also appeared in claimant's behalf. All of these proposed findings are simply the testimony of these four medical witnesses and how they testified. If these proposed findings are proper and should have been adopted, the findings that the board would be compelled to adopt would not constitute findings of basic facts, but merely the testimony of the witnesses. It is stated in 2 Cooper, State Administrative Law, at p. 478 (1965), that when "an agency merely summarizes the testimony of all the witnesses, and then ... sets forth the ultimate conclusions of fact and law in statutory language," it is not a sufficient compliance to make findings of fact. Charlton v. Dan Brosnahan Constr. Co., 108 So. 2d 624 (Fla.App. 1959); American Transp. Co. v. Public Serv. Comm'n, 239 Ind. 453, 154 N.E.2d 512, 158 N.E.2d 653 (1958); Weston v. New Jersey State Board of Optometrists, 32 N.J. Super. 502, 108 A.2d 632 (1954). We do not discern anything in the proceedings of the board with reference to this case which indicates that the "powers and resources of government should not be used in a manner giving an appearance of being arbitrary and capricious." In re Western Motor Tariff Bureau, Inc., 53 Haw. 14, at 19, 486 P.2d 413, at 416 (1971). On the contrary, there is a presumption that public officers performing their duties have complied with the applicable procedural requirements; it is for appellants to overcome this presumption. 2 Cooper, State Administrative Law, at 706. The decision of the director dated August 16, 1972, which supplemented the *1298 initial award of November 24, 1970, by granting to the claimant temporary total disability benefits from April 30, 1970, through March 24, 1971, and from March 30, 1971, until a future date to be determined by the director, was issued under HRS § 386-89(c) (1975 Supp.). The provisions of this section authorize the director to review a compensation case at any time within a period of ten years after the last payment of compensation or the rejection of a claim, upon the application of a claimant because of a change in or a mistake in a determination of fact relating to the physical condition of the injured employee. Before the director may grant the relief requested by the injured employee under HRS § 386-89(c) (1975 Supp.), there must be a showing by substantial evidence of such a change in or mistake in a determination of fact relating to his physical condition. Appellants recognized such authority when they requested that the director reconsider a similar decision that was issued on November 2, 1971. The appellants in their request for such reconsideration to the director stated: The board, therefore, upon appeal from the director was fully aware of the relevant statutory authority. The only avenue available for the director, and upon appeal therefrom, the board, to relate the appellee's hydrocele to the accident of January 10, 1970, was to reopen the award of November 24, 1970 under HRS § 386-89(c) (1975 Supp.). As the hearing opened on November 26, 1973, the chairman of the board remarked: The two issues which will be heard at this time are: Based upon the record in this case, including the decision and order of March 25, 1974, which we sustain for reasons set forth herein, we hold that the board did not commit error in reopening the director's order of November 24, 1970. It is also contended by appellants that the board unlawfully concluded that appellee's *1299 hydrocele was causally related to the industrial accident of January 10, 1970. We think that this issue is now precluded by what we said in De Fries v. Association of Owners, 999 Wilder, 57 Haw. 296, 555 P.2d 855 (1976); De Victoria v. H & K Contractors, 56 Haw. 552, 545 P.2d 692 (1976); Akamine v. Hawaiian Packing & Crating Co., 53 Haw. 406, 495 P.2d 1164 (1972). We said in De Victoria v. H & K Contractors, 56 Haw. at 561-562, 545 P.2d at 699, "that a proceeding brought by a claimant under HRS § 386-89(c) is plainly a `proceeding for the enforcement of a claim for compensation under [our workmen's compensation] chapter.' HRS § 386-85. Where, as here, the primary issue is whether or not an injury is related to a work accident, a claimant is entitled to the same presumption on review of a case once closed that his claim is for a covered injury as that in an original hearing." In De Fries v. Association of Owners, 999 Wilder, supra, we were faced with a problem where a claimant sought to obtain a review of a compensation case under HRS § 386-89(c) (1975 Supp.). In that case, we invoked the presumption of covered work injury under HRS § 386-85. There we held that "substantial evidence" as used in HRS § 386-85 means a high quantum of evidence, and concluded that the presumption had not been overcome by the employer that the arthritic condition of the claimant was work connected. Further, we explained Akamine v. Hawaiian Packing & Crating Co., supra, as follows: 57 Haw. at 305, 555 P.2d at 860-861. On whether appellee's hydrocele was causally related to the industrial accident, the board in its decision and order said: We think that these findings are reasonably clear, especially in light of the presumption that "the claim is for a covered work injury" in the absence of substantial evidence to the contrary. There is substantial evidence in the record to sustain the findings when we consider the presumption in HRS § 386-85. De Fries v. Association of Owners, 999 Wilder, supra; De Victoria v. H & K Contractors, supra; Akamine v. Hawaiian Packing & Crating Co., supra. Appellants also contend that if the order of November 24, 1970, was lawfully reopened, the board nevertheless unlawfully awarded temporary total benefits to the appellee after March 22, 1970. It is difficult to comprehend appellants' arguments as to this contention. Under HRS § 386-89(c) (1975 Supp.) the board on appeal from the director is authorized to "review a compensation case and issue a decision which may award, terminate, continue, reinstate, increase, or decrease compensation." This section further states: "The decision shall not affect any compensation previously paid, except that an increase of the compensation may be made effective from the date of the injury, and if any part of the compensation due or to become due is unpaid, a decrease of the compensation may be made effective from the date of the injury, and any payment made prior thereto in excess of such decreased compensation shall be deducted from any unpaid compensation in such manner and by such method as may be determined by the director." However, the decision and order of March 25, 1974, did not disturb the order of November 24, 1970 with respect to temporary total disability by providing further disability payments to appellee after April 7, 1970. In fact the decision and order expressly set aside the provision in the order of August 16, 1972, which awarded further temporary total disability benefits from April 30, 1970 through February 12, 1971. Consequently, we do not interpret appellants' argument to mean that the board should have adjusted the temporary total disability compensation paid appellee under the order of November 24, 1970. The fact that appellee applied for unemployment compensation and subsequently received such benefits while he was in receipt of temporary total disability benefits may affect his credibility; however, the issue of credibility is one within the primary responsibility of the board as the fact finder whose determination will not be disturbed lightly. De Victoria v. H & K Contractors, supra. Appellants advance the further contention that the decision and order of the board is illegal because it is without the support of reliable, probative and substantial evidence and, therefore, in violation of HRS § 91-10 and § 91-14 (1975 Supp.). This contention is based upon appellants' reasoning that the board awarded appellee disability "benefits for periods of time during which his temporary total disability was solely due to the surgery for correcting appellee's scrotal hydrocele ... or during periods in which he had collected *1301 unemployment compensation on his professed ability to be gainfully employed." We have already discussed and disposed in the preceding part IV, the subject of collecting unemployment compensation and its effect on appellee's credibility before the board. We have further stated previously that appellee sought to have the director to reopen his claim according to HRS § 386-89(c) (1975 Supp.) on the basis of a change in or of a mistake in a determination of fact related to his physical condition. We agree with the board that there is substantial evidence in the record considering the presumption to support its decision and order that the hydrocele was caused by the industrial accident of January 10, 1970. HRS § 386-93(b) (1975 Supp.) provides in pertinent part as follows: The appellants contend that the board unlawfully awarded attorney's fees and costs to the appellee in its decision and order of March 25, 1974. They predicate their contention on the argument that they did not lose their appeal before the board; that they had substantially reduced the amount of temporary total disability benefits that the director in its decisions of August 16, 1972, and April 10, 1973, had awarded to the appellee. The board stated in its decision and order that "the most important issue in Employer's appeal related to the question of whether the Claimant was entitled to further temporary total disability based upon the contention that Claimant's disabling scrotal hydrocele was causally related to his industrial accident." Under the decision, the appellee prevailed on this point; and the appellants lost. A careful examination of the record reveals that almost all of the witnesses to this case were called by the parties to testify with respect to the cause of appellee's hydrocele. We are satisfied that the appellee has prevailed on the crucial issue in this case before the board and that appellants did not. In the quoted language of the statute, the legislature plainly indicated its intent that if the employer appeals a decision of the director and he loses he should be assessed attorney's fees and costs. It does not provide for a proration of such fees and costs if he should prevail in some minor aspect of the appeal. Cf. Abreu v. Raymond, 56 Haw. 613, 546 P.2d 1013 (1976). The appellants finally contend that the board erred in its order of May 29, 1974 which denied their petition for reconsideration. Appellants claim that error was committed because that order was made in violation of HRS § 91-11. The administrative procedure act requires that officials of the agency who are to render a final decision in a contested case shall be familiar with the evidence relevant thereto. HRS § 91-11 states: After the board had rendered its decision and order on March 25, 1974, appellants on April 24, 1974, filed with the board a petition *1302 for reconsideration of that decision and order and the order of April 5, 1974, relating to attorney's fees and costs. The petition for reconsideration was denied by the board on May 29, 1974, by a simple order made by two of its members, one of whom was not a member at the time this appeal was heard. There is no indication in the record that the board served a copy of the order on appellants, or that appellants were given an opportunity to file exceptions and present arguments to the members of the board, before the order denying reconsideration took effect. Under In re Terminal Transportation, Inc., 54 Haw. 134, 504 P.2d 1214 (1972); and In re Oahu Terminal Serv., Inc., 52 Haw. 221, 473 P.2d 573 (1970), we are bound to hold that the procedures followed by the board were contrary to the requirements set forth in HRS § 91-11, if we construe the term "final decision" to include an order denying a petition for reconsideration. In our view, the term "final decision" as used in HRS § 91-11, means a decision on the merits of a case after a hearing thereon, in which the parties are given opportunity to present all the material evidence relative to the subject of the controversy, such decision determining the rights, duties or privileges of the parties involved in the proceedings. We do not believe that the term "final decision" was intended to apply to an order denying a petition for reconsideration of a substantive decision which takes effect without going through the safeguards provided in HRS § 91-11, because all the required officials participating in the "final decision" had heard the evidence. Under such circumstances, we hold that neither due process nor this statute would require a copy of the proposed order denying reconsideration be first served on the parties and also each adverse party be given an opportunity to file exceptions and present argument before the proposed order takes effect. Moreover, the language of HRS § 386-87(d) (1975 Supp.) vests in the board the discretionary power to grant a reopening of this decision and order.[4] HRS § 91-1(5) defines a "contested case" to be "a proceeding in which the legal rights, duties or privileges of specific parties are required by law to be determined after an opportunity for agency hearing." Under HRS § 386-87(d) (1975 Supp.) the board has exercised its discretion and denied the appellants' petition for reconsideration. It was not required to give appellants a hearing before such a denial. Nor is there anything to indicate that such a denial was an abuse of discretion. Consequently, the requirements of HRS § 91-11 are inapplicable to a denial of a petition for reconsideration. This is not to say that HRS § 91-11 would be inapplicable if the petition for reconsideration is granted by the board. In that event it would be applicable if any member of the board did not participate in the agency hearing relative to the final disposition of the appeal. There being no error in the record, the judgment is affirmed. [1] In the Employer's Report of Industrial Injury, dated January 23, 1970, which is an integral part of the record, the employer admitted liability for these injuries. [2] Chicago Bridge & Iron Company was dismissed with prejudice from this case after it was appealed to the board by stipulation filed on November 9, 1972. [3] The substance of appellants' proposed finding 56, that Dr. de Jesus testified that he did not know the cause of claimant's hydrocele, is in fact incorporated in the decision and order. [4] HRS 386-87 (1975 Supp.) states in pertinent part: (d) In the absence of an appeal and within thirty days after mailing of a certified copy of the appellate board's decision or order, the appellate board may, upon the application of the director or any other party, or upon its own motion, reopen the matter and thereupon may take further evidence or may modify its findings, conclusions or decisions. The time to initiate judicial review shall run from the date of mailing of the further decision if the matter has been reopened. If the application for reopening is denied, the time to initiate judicial review shall run from the date of mailing of the denial decision.