Case Title: State ex rel. Wyoming Workers' Safety and Compensation Div. v. Jackson

Citation: 

Docket Number: 98-110

State: wyoming

Court: Wyoming Supreme Court

Date: 1999-12-21T00:00:00Z

Document:
State ex rel. Wyoming Workers' Safety and Compensation Div. v. Jackson1999 WY 175994 P.2d 320Case Number: 98-110Decided: 12/21/1999Supreme Court of Wyoming
 
STATE OF WYOMING, Ex Rel. WYOMING WORKERS SAFETY AND 
COMPENSATION DIVISION,

 Appellant 
(Petitioner),

v.

LILA A. JACKSON, Appellee 
(Respondent).

Appeal from the W.R.A.P. 
12.09(b) Certification from the District Court of Albany County, The Honorable 
Jeffrey A. Donnell, Judge.

William U. Hill, 
Attorney General; Gerald W. Laska, Senior Assistant Attorney General; and 
Bernard P. Haggerty, Assistant Attorney General, Representing 
Appellant.

Kennard F. 
Nelson of Kirkwood, Nelson & Vang, P.C., Laramie, WY., Representing 
Appellee.

Before 
LEHMAN, C.J., and THOMAS, MACY, GOLDEN, and TAYLOR,* 
JJ.

* Retired November 2, 
1998.

LEHMAN, Chief 
Justice.

[¶1]      The question 
presented is whether, under the Wyoming Worker's Compensation Act, collateral 
estoppel may be premised on an uncontested denial of a claim by the Worker's 
Compensation Division (Division). Relying on Tenorio v. State, ex rel. Workers' 
Compensation Div., 931 P.2d 234, 237 (Wyo. 1997), we conclude that an 
uncontested denial of a claim by the Division will not be given collateral 
estoppel effect in subsequent proceedings for outstanding claims. We affirm the 
hearing examiner's order awarding benefits.

ISSUES

[¶2]      We adopt the 
injured worker's statement of the issue:

Did the Hearing 
Examiner commit error in finding that Mrs. Jackson's failure to timely object to 
a final determination addressed to her physician and denying payment of a $45.00 
claim did not preclude further claims?

FACTS

[¶3]      Appellee Lila 
Jackson (Jackson) suffered a work-related injury in December of 1992. While 
working as a bus driver for the Laramie Senior Center, she slipped and fell 
climbing the bus steps, injuring her left ankle. She timely filed an injury 
report. After review, the Division concluded that Jackson's injury was covered 
by the Worker's Compensation Act.

[¶4]      The ankle did not 
respond to therapy, and surgery was required. In March of 1993, Jackson 
underwent the first of three surgeries on her ankle. This surgery did not solve 
her problems, however, and pain and swelling in the ankle continued. In May of 
1994, Jackson underwent another surgery. This time, the bones in her ankle were 
fused, and she was fitted with an ankle support brace. The brace attaches to the 
heel of Jackson's shoe, and its two metal supports run up the sides of her leg 
to another attachment just below the knee.

[¶5]      The brace 
significantly alters Jackson's gait, causing a limp and creating excessive 
strain on her right hip and right knee. Prior to wearing the brace, Jackson did 
not have any hip or knee problems. Two months after being fitted with the brace, 
however, Jackson began experiencing pain in her right hip and right knee. First 
diagnosed with trochanteric bursitis (bursitis of the hip), Jackson has since 
developed degenerative arthritis in both joints. In just three years, Jackson's 
condition has deteriorated to the point that her orthopedic surgeon believes 
both joints need to be replaced.

[¶6]      Sometime in the 
fall of 1996, Jackson's orthopedic surgeon filed a claim with the Division, 
seeking payment of a $45 bill for treatment of Jackson's hip and knee. On 
October 2, 1996, the Division issued a final determination, addressed to the 
orthopedic surgeon, denying the $45 claim. This final determination 
provided:

FINAL 
DETERMINATION

DENIAL OF AMOUNT IN 
QUESTION $45.00

The Division has reviewed 
the response and denied payment on the referenced bill in the amount shown above 
for the following reason(s).

The hips and knees have 
not been established as part of the original workers' compensation left ankle 
injury. This denial is based upon the Division's authority to review all medical 
records pursuant to Wyoming Statute 27-14-401(b).

The orthopedic 
surgeon did not file an objection. Although Jackson filed an objection, it was 
three days late. The matter was referred to the Division's Internal Hearing 
Unit, which concluded, on April 18, 1997, that Jackson's objection was untimely 
and that the October 2, 1996 final determination was not subject to further 
administrative or judicial review.

[¶7]      In the meantime, 
on November 6, 1996, the Division issued another final determination, this time 
denying Jackson's claim for temporary total disability (TTD) benefits. The final 
determination, this time addressed to Jackson, stated that "Trochanteric 
bursitis has not been established as part of the original workers' compensation 
left ankle injury." Jackson timely objected and requested that "the relationship 
of her current symptoms to the ankle injury should be referred for hearing." The 
matter was set for hearing before a hearing examiner from the Office of 
Administrative Hearings (OAH). Although the TTD issues settled before the 
hearing, a hearing was held to determine Jackson's outstanding claims for 
medical bills relating to treatment for her hip and knee 
problems.

[¶8]      At the hearing, 
the Division argued that Jackson's failure to timely object to the October 2, 
1996 final determination precluded her from establishing that her hip and knee 
ailments are compensable. For her part, Jackson disagreed with the Division and 
also presented evidence that established, to a reasonable degree of medical 
certainty, her hip and knee problems were directly related to the December 1992 
ankle injury and its subsequent treatment.

[¶9]      The OAH awarded 
benefits. First, it found Jackson was not precluded from establishing the 
relationship between the hip/knee ailments and the ankle injury. It also found 
that Jackson had sustained her burden of establishing that her right hip and 
right knee problems were directly related to the ankle injury and the treatment 
therefor. The Division petitioned for review in the district court, which 
certified the case pursuant to W.R.A.P. 12.09.

STANDARD OF 
REVIEW

[¶10]   Pursuant to W.R.A.P. 12.09, our 
review of the hearing examiner's decision is governed by Wyo. Stat. Ann. § 
16-3-114(c)(ii)(A) (Lexis 1999) 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[.]" The issue on appeal presents a question of law. If the hearing 
examiner's conclusions of law are correct, its decision will be affirmed. 
Tenorio v. State, ex rel. Workers' Compensation Div., 931 P.2d 234, 237 (Wyo. 
1997); Martinez v. State, ex rel. Workers' Compensation Div., 917 P.2d 619, 621 
(Wyo. 1996). If the hearing examiner has not invoked and applied the correct 
rule of law, we correct it. Tenorio, 931 P.2d  at 237; Martinez, 917 P.2d  at 
621.

DISCUSSION

[¶11]   The Division does not contest the 
medically established fact that Jackson's right knee and right hip ailments are 
directly related to the December 1992 left ankle injury and its subsequent 
treatment. Instead, the Division argues that this issue was decided by the 
Division's uncontested final determination (which denied the orthopedist's $45 
claim) issued on October 2, 1996, and Jackson's failure to timely object to that 
final determination estops her from litigating the issue. We 
disagree.

[¶12]   This court examines four factors 
when determining whether collateral estoppel applies:

(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.

Tenorio, 931 P.2d  at 238-39. Here, the Division correctly asserts that each of the factors is 
present in this case. The parties are the same; the October 2, 1996 final 
determination included the conclusion that Jackson's hip and knee problems were 
not related to the ankle injury; and Jackson had an opportunity to litigate the 
issue, but did not file a timely objection. Nevertheless, we have recognized 
that collateral estoppel may be modified in applicability and scope by statute. 
Tenorio, 931 P.2d  at 239. Therefore, we must review the relevant statutes to 
determine whether the common law rule of collateral estoppel is consistent with 
the legislature's intent when enacting the Worker's Compensation Act. Id. at 
240. In this case, the application of collateral estoppel to the Division's 
uncontested denial of a claim requires a legislative intent that the issue has 
reached a final adjudication on the merits. Id. at 239.

[¶13]   The Division argues that Wyo. Stat. 
Ann. § 27-14-601(k)(vi) (Lexis 1999) evidences the legislature's intent that an 
uncontested final determination by the Division is sufficient to invoke 
collateral estoppel. That statute provides:

(iv) If timely 
written request for hearing is not filed, the final determination by the 
division pursuant to this subsection shall not be subject to further 
administrative or judicial review.

We do not find 
the Division's argument persuasive. Section -601(k)(iv) merely provides that 
failure to object to a final determination precludes further administrative or 
judicial review of the claim at issue. This does not necessarily mean that an 
uncontested final determination will be given preclusive effect in subsequent 
proceedings for outstanding claims. While this statute bars Jackson from 
contesting the denial of the $45 claim by her orthopedist, we do not find it 
dispositive of the issue before the court.

[¶14]   Instead, our decision is guided by 
the analysis found in Tenorio, 931 P.2d 234. In that case, we held 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." 931 P.2d  at 240. Although the present case concerns 
an uncontested denial of benefits and Tenorio involved an uncontested award of 
benefits, the analysis remains the same. In discerning the legislature's intent 
in this area, the Tenorio court acknowledged that the legislature has provided a 
"distinct forum," the Office of Administrative Hearings, for final adjudications 
on the merits. 931 P.2d  at 240. We also recognized that the legislature intended 
that the Office of Administrative Hearings, and not the Division, be the final 
arbiter of contested cases: "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." Id. 
Indeed, "[t]he hearing examiner has exclusive jurisdiction to make the final 
administrative determination of the validity and amount of compensation payable 
under this act." Wyo. Stat. Ann. § 27-14-602(c) (Lexis 
1999).

[¶15]   Relying on the foregoing statutes 
and our decision in Tenorio, we hold that an uncontested final determination by 
the Division denying a worker's compensation claim will not be given collateral 
estoppel effect in subsequent proceedings for outstanding claims. Here, the 
October 2, 1996 final determination went uncontested and was not heard by a 
hearing examiner. Under these circumstances, collateral estoppel does not 
preclude Jackson from establishing, for purposes of her outstanding claims, that 
her hip and knee ailments are directly related to her December 1992 ankle injury 
and its treatment.

CONCLUSION

[¶16]   In Tenorio, we held 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." 931 P.2d  at 240. Just as we will not give collateral 
estoppel effect to an uncontested award of benefits by the Division, we will not 
give collateral estoppel effect to an uncontested Division determination denying 
benefits. The hearing examiner's order awarding benefits is affirmed.