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

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1990-02-06T00:00:00Z

Document:
Jackson v. State ex rel. Wyoming Workers' Compensation Div1990 WY 12786 P.2d 874Case Number: 89-103Decided: 02/06/1990Supreme Court of Wyoming
GORDON 
JACKSON,

 APPELLANT 
(EMPLOYEE-CLAIMANT),

v. 

STATE OF WYOMING, EX 
REL., WYOMING WORKERS' COMPENSATION DIVISION, APPELLEE 
(OBJECTOR-DEFENDANT).

Appeal from the District 
Court, Sweetwater County, Jere Ryckman, J.

Richard H. 
Honaker (argued) and David A. Hampton of Honaker & Hampton, Rock Springs, 
for appellant.

Joseph B. Meyer, 
Atty. Gen., Ron Arnold and Robert A. Nicholas, Senior Asst. Attys. Gen. 
(argued), for appellee. 

Before 
CARDINE, C.J., and THOMAS, URBIGKIT, MACY and GOLDEN, JJ.

CARDINE, Chief 
Justice.

[¶1]      This appeal 
concerns the propriety of a summary judgment issued by an administrative hearing 
officer in a worker's compensation case. The summary judgment denying appellant 
Gordon Jackson's application for modification was, upon Jackson's petition for 
review, affirmed by the district court. Because we find such summary 
adjudication fails to comport with the procedures statutorily mandated for 
worker's compensation cases and, therefore, exceeds the statutory authority of 
the office of independent hearing officers, we reverse the decision of the 
district court and remand to the administrative agency for a full 
hearing.

BACKGROUND

[¶2]      On December 30, 
1980, Jackson slipped and twisted his neck while working for Stansbury Coal 
Company at a mine north of Reliance, Wyoming. He applied for and received 
temporary total disability compensation for approximately 21 months following 
the accident. Dr. Earl Plunkett, the first of many physicians to examine Jackson 
during that period, informed the Wyoming Worker's Compensation Division 
(Division) in July 1981 that he could not, at that time, determine whether 
Jackson would suffer any permanent disability from the accident. He noted, 
however, that Jackson's participation in physical therapy was greatly encumbered 
by continuing pain and recommended that he be treated by the University of Utah 
Pain Clinic. Jackson's employer encouraged those rehabilitative efforts and 
asked the Division to suspend any permanent disability determinations until 
treatment at the pain clinic was completed.

[¶3]      The treating and 
examining physicians at the pain clinic found that Jackson's condition was 
deteriorating due to the lack of a sustained exercise program and indicated that 
underlying psychological difficulties may have contributed to his inability to 
follow such a program. They suggested that his potential for recovery, and 
accordingly the accuracy of any prognosis regarding the extent of his permanent 
disability, depended largely on whether or not these psychological problems 
could be overcome. To that end, it was recommended that Jackson undergo 
examination by the Stress Management and Biofeedback Institute of Wyoming 
(Institute) in Cheyenne.

[¶4]      During June and 
July 1982, personnel at the Institute examined Jackson and concluded that his 
traumatic injury had developed into chronic pain syndrome. The severe pain in 
his neck and right shoulder and arm could not be alleviated even by strong 
narcotics, causing Jackson to experience continual stress and depression. As a 
result, he had become unwilling or unable to use his right arm. While the 
physicians at the Institute did not consider him, under those conditions, to be 
a good candidate for rehabilitation, they withheld opinion as to any permanent 
disability and strongly suggested Jackson receive psychological 
counselling.

[¶5]      After reviewing 
the Institute's report, Jackson's employer agreed to a program of counselling 
combined with the continued exercise therapy but concluded that Jackson's 
recovery had stabilized sufficiently to warrant the termination of temporary 
total disability compensation and to afford the opportunity to make a 
preliminary determination of his permanent disability. The Division ordered a 
disability evaluation and, on October 22, 1982, awarded Jackson compensation for 
permanent partial disability, rated at 10 percent physical impairment of the 
whole body. It is clear from the record that the Division did not consider that 
action to constitute a determination of whether Jackson was vocationally 
disabled.

[¶6]      In early 1985, 
Jackson sought to modify that permanent partial disability award to 54 percent 
of the whole body, based on an evaluation by orthopedic surgeon Dr. Ross 
McNaught. In two letters, dated July 29, 1983, and November 21, 1983, McNaught 
observed, as had the physicians who previously examined Jackson, that Jackson 
was at the time of examination completely unable to engage in heavy work due to 
chronic pain, despite some prospect for improvement. Accordingly, McNaught 
avoided any prognosist relating to the vocational component of Jackson's 
disability and based his 54 percent impairment rating solely on the loss of 
mobility in his upper extremities. The Division granted Jackson a modification 
award on March 11, 1985.

[¶7]      More than two 
years later, between June and September 1987, Jackson contacted the Division, 
complaining that he had been unfairly denied benefits by the actions of both the 
Division and his former attorney. He claimed total vocational disability and 
announced his intent to seek further compensation. He was told, in response, 
that the Division had "never been advised that [Jackson was] 100% totally 
disabled from [his] injury only." On January 6, 1988, Jackson filed a claim for 
permanent total disability compensation, and the Division objected. The hearing 
officer set a contested case hearing in the matter for October 6, 1988. The 
Division moved for summary judgment on September 1, 1988.

[¶8]      In opposition to 
that motion, Jackson submitted two letters from Dr. McNaught, dated December 3, 
1987, and September 16, 1988, concerning his prior and present evaluations of 
Jackson's condition. The letters outlined Jackson's history of conservative 
treatment and the worsening of his condition despite his efforts at 
rehabilitation through exercise and heat treatments. McNaught stated that 
Jackson now suffered a 60 percent physical impairment of the whole body and was 
100 percent vocationally disabled. He explained that his earlier rating of 
Jackson's condition had been based solely on the loss of mobility suffered 
between Jackson's accident and the examination, and that, in deference to a 
pending assessment of his prospects for rehabilitation, no consideration had 
been given to Jackson's ultimate vocational disability. McNaught's "wait and 
see" attitude with respect to his earlier disability evaluation was consistent 
with the approach taken by both the University of Utah Pain Clinic and the 
Stress Management and Biofeedback Institute of Wyoming, and which had been 
implicitly approved by Jackson's employer and the Division. All prior diagnostic 
efforts concluded that, at the time of the examination, Jackson could not work. 
However, they also concluded that a final evaluation of his permanent vocational 
disability should await additional efforts at physical, psychological and 
vocational rehabilitation and a subsequent evaluation of the potential success 
of those efforts. The history of the employer's and the Division's acquiescence 
to such advice appears to reflect the good judgment that our worker's 
compensation scheme seeks to rehabilitate injured workers at least as much as it 
seeks to compensate.

[¶9]      The Division 
supported its summary judgment motion largely through the statements of 
Jackson's primary physician, Dr. Glen Sheppard, which indicated that, at least 
since the time of the 1985 permanent partial disability award, Jackson had 
always been totally disabled. The record suggests that the hearing officer 
considered the deposition testimony of Dr. Sheppard. While it did not, however, 
contain a copy of that deposition, it did contain a number of letters from the 
doctor. We have been afforded the opportunity to examine that deposition only 
due to its inclusion as an appendix to the Division's briefs. Although we make 
no determination as to whether such evidence served as a basis for the hearing 
officer's decision, we do observe that, had it been properly before him, he 
would have been forced to note that Sheppard was a general practitioner, not an 
orthopedist, and that he had only a passing familiarity with the manner in which 
disability ratings were made, never having made such a determination himself. 
The record clearly shows, however, that neither Sheppard, nor any physician 
other than McNaught, performed or purported to perform a disability evaluation 
on Jackson which served as the basis of a worker's compensation 
award.

[¶10]   The hearing officer concluded that 
Jackson had failed to establish the existence of any factual issue concerning 
the grounds necessary for a modification of his prior award, and granted summary 
judgment to the Division.1 On March 29, 1989, the district 
court affirmed.

DISCUSSION

[¶11]   When the Division objected to his 
application to modify the earlier disability award, Jackson became entitled to 
have the matter determined by the contested case procedures of the Wyoming 
Administrative Procedure Act (WAPA). W.S. 27-14-602(b) (June 1987 Repl.) states 
in pertinent part:

"If either the division 
or the employer object to the right of the employee to receive compensation, as 
to the amount of compensation or to amounts or procedures claimed for medical 
and health care, or at the request of the employee, the case shall be 
immediately referred to a hearing examiner who shall set the case for hearing at 
the earliest opportunity. The case shall be determined by a hearing examiner 
following the contested case procedures of the Wyoming Administrative Procedure 
Act."

[¶12]   We have frequently explained that a 
basic purpose of the WAPA is to assure that controverted issues underlying 
contested cases will be fully developed before agency fact finders. A record of 
material and substantial evidence must be created so that a reviewing court can 
determine whether such factual development occurred or whether, instead, the 
agency's actions were based on unwarranted or undeclared assumptions. Board of 
County Comm'rs v. Teton County Youth Services, Inc., 652 P.2d 400, 413-14 (Wyo. 
1982); Glenn v. Board of County Comm'rs, 440 P.2d 1, 3 (Wyo. 1968). In the 
service of that legislative purpose, WAPA provides Jackson a number of important 
procedural rights. W.S. 16-3-107 provides in part:

"(a) In any contested 
case, all parties shall be afforded an opportunity for hearing * * 
*.

* * * * * *

"(c)(j) Opportunity shall 
be afforded all parties to respond and present evidence and argument on all 
issues involved."

Those rights 
gain more specific substance from the provisions of W.S. 16-3-108 which 
state:

"(a) * * * Subject to 
these requirements [concerning admissibility of evidence] and agency rule if the 
interests of the parties will not be prejudiced substantially testimony may 
be received in written form subject to the right of cross-examination as 
provided in subsection (c) of this section.

* * * * * *

"(c) A party may conduct 
cross-examinations required for a full and true disclosure of the facts and a 
party is entitled to confront all opposing witnesses." (emphasis 
added)

In addition, 
W.S. 16-3-110 mandates:

"A final decision or 
order adverse to a party in a contested case shall be in writing or dictated 
into the record. The final decision shall include findings of fact and 
conclusions of law separately stated. Findings of fact if set forth in statutory 
language, shall be accompanied by a concise and explicit statement of the 
underlying facts supporting the findings."

It is clear 
that, consistent with the purposes of the WAPA, these provisions were designed 
by the legislature to serve two related functions: to promote the full and fair 
development of factual issues and to permit a court, reviewing such development, 
to determine the reasonableness of agency action.

[¶13]   The hearing Jackson received did 
not permit him to fully and fairly develop facts material to the hearing 
officer's decision. In particular, he was deprived of the opportunity to respond 
and present evidence and argument on what proved to be the most crucial issue in 
this case, and he was denied the opportunity to cross-examine Dr. Sheppard on 
that same issue. It is evident from the summary judgment proceedings that the 
hearing officer accorded great weight to Sheppard's declaration that Jackson had 
been "totally disabled" at the time of his earlier permanent partial disability 
award. Even a cursory examination of the record, however, suggests that few, if 
any, of the physicians involved with Jackson used the term "totally disabled" 
with its legal definition in mind. The usage of the term was, therefore, 
ambiguous and susceptible to more than one interpretation. Nevertheless, Jackson 
was deprived of an opportunity to explore what Sheppard meant by the term, 
whether Sheppard was purporting to have conducted the type of disability 
determination required by statute, and whether Sheppard was even qualified to 
make such a determination. By granting summary judgment, Jackson was denied the 
ability to fully develop facts material to the disposition of his case. This, 
the hearing officer may not do.

[¶14]   We have held it essential to 
surviving judicial review that the record of a contested agency action contain 
such factual findings as would permit a court to follow the agency's reasoning 
from the evidentiary facts on record to its eventual legal conclusions. Larsen 
v. Oil and Gas Conservation Comm'n, 569 P.2d 87, 90-91 (Wyo. 1977); Powell v. 
Board of Trustees, Crook County School District No. 1, 550 P.2d 1112, 1120 (Wyo. 
1976). Similarly, we have held that a contested case hearing must provide, and 
the record of that proceeding must document, information sufficient to the 
making of a reasonable decision. Absent such information, the agency decision 
must be set aside as arbitrary. Western Radio Communications, Inc. v. Two-Way 
Radio Service, Inc., 718 P.2d 15, 20 (Wyo. 1986); Monahan v. Board of Trustees, 
Elementary School District No. 9, 486 P.2d 235, 237 (Wyo. 1971). The need for 
such strict compliance with statutory provisions relating to the content of the 
agency record derives largely from a need to ascertain whether contested case 
hearings actually provide statutorily mandated procedural protections. To assure 
the due process protections inherent in the WAPA's statutory scheme will be 
given effect, this court requires strict compliance with those procedural 
provisions.

[¶15]   Foremost among the procedural 
protections of the WAPA is the requirement that contested cases be determined 
following trial-type proceedings. Foster's, Inc. v. City of Laramie, 718 P.2d 868, 873 (Wyo. 1986); Scarlett v. Town Council, 463 P.2d 26, 29 (Wyo. 1969). 
While administrative agencies are afforded considerable latitude in the 
procedures to be followed in such hearings, that flexibility does not go so far 
as to permit procedures which are contrary to statutory mandate or procedures 
which allow the agency to act without collecting the necessary facts. Cook v. 
Zoning Bd. of Adjustment, 776 P.2d 181, 185 (Wyo. 1989); Holding's Little 
America v. Board of County Comm'rs, 712 P.2d 331, 333 (Wyo. 1985); First 
National Bank of Thermopolis v. Bonham, 559 P.2d 42, 48-49 (Wyo. 
1977).

[¶16]   Both general due process 
considerations of fairness and specific statutory restrictions directly limit 
the manner in which an agency may exercise its designated responsibilities. Cody 
Gas Company v. Public Service Comm'n, 748 P.2d 1144, 1148 (Wyo. 1988). 
Additional restrictions are imposed by the often stated principle that an agency 
enjoys only those powers which the legislature has expressly conferred and the 
corollary rule of construction that statutes under which an agency purports to 
exercise a doubtful power must be strictly construed against the exercise of 
that power. Hupp v. Employment Security Comm'n, 715 P.2d 223, 225 (Wyo. 1986); 
Tri-County Electric Ass'n, Inc. v. City of Gillette, 525 P.2d 3, 8-9 (Wyo. 
1974).

[¶17]   In the present case, neither the 
worker's compensation statutes nor the WAPA expressly grants the hearing officer 
the power to determine cases by summary judgment. Nor do those enactments 
authorize the adoption of procedural rules which directly contravene the general 
procedures mandated for contested cases by the WAPA or which permit the hearing 
officer to decide such cases without the collection of necessary facts.2 In fact, the WAPA, on its face, 
requires agencies to provide full blown trial-type proceedings which include the 
right to cross-examination, the right to appear with counsel, and the right to a 
written decision separately stating the findings and conclusions of the trier of 
fact. Wyoming Bd. of Equalization v. State ex rel. Basin Electric Power Coop., 
637 P.2d 248, 251 (Wyo. 1981). We have concluded in the past that such rights 
are "procedures required by law" and that their denial amounts to reversible 
error.3 Buck Draw Field Area v. Wyoming Oil 
and Gas Conservation Comm'n, 721 P.2d 1070, 1076 (Wyo. 1986). Likewise, where 
procedures adopted for worker's compensation cases permitted the determination 
of a case without a statutorily mandated hearing, we have held the order denying 
benefits void. Herring v. Welltech, Inc., 660 P.2d 361, 366-67 (Wyo. 
1983).

[¶18]   The sole exception to that rule 
will not benefit the Division in the present case. We have recognized that 
principles of due process do not demand a trial-type hearing with full 
WAPA-mandated procedures in cases where the agency is confronted with no 
disputed factual questions - where the agency's sole task is to determine 
questions of law or public policy. Walker v. Karpan, 726 P.2d 82, 83-87 (Wyo. 
1986). Thus, we have held that a contested case hearing should be provided where 
the factual allegations on the face of a claimant's pleadings raise the proper 
statutory grounds for modification; conversely, we have held that no such 
hearing is required if those pleadings establish he is not entitled to relief as 
a matter of law. Herring v. Welltech, Inc., 715 P.2d 553, 556-57 (Wyo. 1986). 
The present case clearly goes beyond a determination that Jackson's pleadings 
were prima facie insufficient. No such determination was made, and it is 
unlikely that such a determination could be made under the appropriate standard 
of review. Once the hearing officer proceeded beyond the face of the pleadings 
to a consideration of factual matters, the present state of relevant 
legislation, and the opinions of this court interpreting that legislation, 
required the hearing officer to consider those matters only after full contested 
case proceedings.

[¶19]   After considering the cases and 
commentaries cited by the Division in support of a contrary position, we 
conclude that our holding in this case is not inconsistent with the views 
expressed therein. While a persuasive argument can be made recommending the 
broad use of summary judgment-type mechanisms in administrative adjudication, we 
note the following comments from 1 C. Koch, Administrative Law and Practice, §§ 
5.77 and 5.79 (1985):

"Summary judgment adds 
efficiency to a quasi-judicial process as it does to the judicial process. 
Agency decisions are often controlled by questions of law or policy and can be 
made without an evidentiary hearing where the facts can be obtained otherwise 
or are not in dispute.

* * * * * 
*

"Some agencies have 
searched for techniques to reach decisions on individual disputes by the notice 
and written comment procedures which have been effective in rulemaking. Where 
formal adjudication is required for such decisions, however, the agencies are 
not free to cut off the right to oral hearing." (emphasis added)

Similarly, after 
careful perusal of the extensive case law cited by the Division, we agree with 
the following evaluation:

"A long line of cases 
establishes the rule that even when a statute mandates an adjudicatory 
proceeding, neither that statute, nor due process, nor the APA requires an 
agency to conduct a meaningless evidentiary hearing when the facts are 
undisputed. But all these cases concern either statutes that do not clearly 
require a hearing before the agency action in question, statutes whose wording 
and legislative history condition a hearing on a preliminary showing of a 
disputed issue of fact, or at minimum agencies that have exercised their 
rulemaking powers to establish statutorily-permitted threshold prerequisites to 
a hearing. We refuse to extend their rule to this case, one where the agency 
summarily disregarded a controlling statute that clearly mandates a hearing." 
(citations omitted) United States v. Cheramie Bo-Truc # 5, Inc., 538 F.2d 696, 
698-99 (5th Cir. 1976).

In the present 
case, the worker's compensation statutes clearly mandate a WAPA contested case 
hearing, and none of the exceptions outlined in Cheramie are 
present.

[¶20]   The decision of the district court 
is reversed and the case remanded to the hearing officer for proceedings 
consistent with this opinion.

FOOTNOTES

1 W.S. 27-14-605 (June 
1987 Repl.) permits such modifications "on the ground of increase or decrease of 
incapacity due solely to the injury, or upon grounds of mistake or fraud." 
Jackson appears to have argued from the facts set out above that his prior award 
was only preliminary insofar as his incapacity had been evaluated solely on the 
basis of his physical impairment, the extent of his vocational impairment having 
been, as yet, unknown. Thus, he argued alternatively that either, taking both 
components of disability into account, his incapacity has now increased, or it 
was a mistake to make a preliminary evaluation that failed to account for both 
components of his disability.

2 It should be noted that 
under the worker's compensation statutes, as they existed prior to 1986, W.S. 
27-12-607 (June 1983 Repl.) expressly made the Wyoming Rules of Civil Procedure 
applicable to the adjudication of such cases, unless some other provision of the 
act provided otherwise. Presumably, under such a scheme, summary judgments would 
be available unless expressly prohibited. However, the 1986 revision of those 
statutes effectively changed contested worker compensation cases from judicial 
to administrative proceedings. Hohnholt v. Basin Electric Power Co-op, 784 P.2d 233 (Wyo. 1989). No provision comparable to that contained in W.S. 27-12-607 was 
retained in the present statutory scheme. Accordingly, the trier of fact in 
compensation cases has been divested of a portion of the flexibility formerly 
afforded by the Rules of Civil Procedure and placed under the specific 
constraints of WAPA. See FMC v. Lane, 773 P.2d 163, 166-67 (Wyo. 
1989).

3 W.S. 16-3-114(c)(ii)(D) 
requires a reviewing court to "hold unlawful and set aside agency action * * * 
found to be * * * without observance of procedure required by law."