Title: Rio All Suite Hotel & Casino v. Phillips

State: nevada

Issuer: Nevada Supreme Court

Document:

426 Nev, Advance Opinion 34+
IN THE SUPREME COURT OF THE STATE OF NEVADA

 

RIO ALL SUITE HOTEL AND CASINO; No. 59191
AND SEDGWICK CMSICANNON

COCHRAN MANAGEMENT SERVICES, Fi L ED
INC.,

Anpeltents, SEP 3.02010

KATHRYN PHILLIPS,
Respondent.

Appeal from a district court order denying a petition for
judicial review in a workers’ compensation action. Eighth Judicial District
Court, Clark County; Susan Johnson, Judge.

Affirm

Lewis Brisbois Bisgaard & Smith LLP and J. Michael McGroarty, Las

Vegas,
for Appellants.

Evan Beavers, Nevada Attorney for Injured Workers, and Gary T. Watson,
Deputy Attorney for Injured Workers, Carson City,
for Respondent.

BEFORE THE COURT EN BANC.

OPINION
/By the Court, HARDESTY, J.

 

*The Honorable
the decision of this matter.

 

ina Pickering, Justice, did not participate in

 
4

 

While descending a staircase at work, respondent Kathryn
Phillips injured her ankle on one of the stops. In this appeal, we address
ithe standard to be applied to determine whether an employee secking
Iworkers’ compensation benefits has demonstrated, pursuant to NRS
1616C.150(1), that her injury “arose out of" her employment. In situations
in which an employee's injury is caused by a neutral risk—a risk that is
inot personal to the employee or solely employment-related—we adopt the
increased-risk test, which evaluates whether the employee was exposed to
ja risk greater than that faced by the general public. If so, then the
Jemployee’s injury is deemed to have arisen out of his or her employment.

FACTS

Phillips was employed for 17 years by appellant Rio All Suite
Hotel & Casino in Las Vegas, Nevada, as a poker and blackjack dealer. In
JOctober 2006, Phillips was working her usual eight-hour shift. Upon
{taking her first 20-minute break of the day, Phillips started walking down,
ithe stairs that led to the employees’ break room. Phillips grabbed the
handrail with her right hand, took a step down with her right foot and
then, according to Phillips, the accident occurred as follows:

(When I stepped down on my left foot, it just
twisted over. ... I never missed a step. I just sat
down on the stair that my butt was on, which was
a couple up from it. But, my leg just was sitting
there. I didn't lose my balance. I didn’t even slip
at all, Just that foot twisted around.

Phillips did not contend that the stairs were defective or contained debris.
Phillips was subsequently transported to the hospital, where
x-rays revealed that she fractured her ankle. ‘The following day, Phillips
jwas evaluated at Concentra Medical Centers and filled out a workers’
compensation claim form. On the form, the treating physician indicated

 
om ae

 

that Phillips’ injury was work-related. A few days later, Phillips
underwent surgery to repair her ankle.

In November 2006, Rio's third-party administrator, Sedgwick
CMS,? denied Phillips’ workers’ compensation claim because she did not
“provo[] by a preponderance of the evidence that fher] injury arose out of
the course of fher] employment” pursuant to NRS 616C.150(1). Phillips
requested a hearing before the Nevada Department of Administration,
Hearings Division. Citing this court's decision in Mitchell v, Clark County
Sch. Dist., 121 Nev. 179, 111 P.3d 1104 (2005), the hearing officer affirmed
Sedgwick CMS's determination, stating that “the claim is not compensable
under workers[] compensation.” The hearing officer indicated that if
Phillips’ claim had been filed pre-Mitchell she would have received
lcompensation; however, “Mitchell has changed the landscape for injuries
loceurring on-the-job and whether they are covered under workers{]
Jcompensation.”

Phillips appealed the hearing officer's decision. The appeals
officer reversed the hearing officer's decision and found that Phillips
established that she “was injured in the course and scope of her
lemployment” pursuant to NRS 616C.150(1). The appeals officer found
‘that Phillips’ case was “distinguishable” from Mitchell because Phillips’
injury did not result from an “unexplained fall.” Without elaborating, the
appeals officer also stated that “(t]he Mitchell [clout mentions the
inherent dangerousness of stairways.” Rio and Sedgwick filed a petition

2At the time of Phillips’ accident, Rio's third-party administrator
was Sedgwick CMS, but Cannon Cochran Management Services, Inc., is
{the administrator appellant in this appeal.

 
 

for judicial review of the appeals officer's decision. The district court
Jentered an order denying Rio and Sedgwick’s petition for judicial review,
finding that the appeals officer's decision did not violate NRS 233B.135(3),
relating to the standard of review of an agency’s decision. Rio and its
{third-party administrator (collectively, Rio) appeal the district court's
decision
DISCUSSION

When reviewing a district court's denial of a petition for
judicial review of an agency decision, this court engages in the same
analysis as the district court: we “determine whether the agency's
decision was arbitrary or capricious and was thus an abuse of the agency's
discretion.” Bob Allyn Masonry v. Murphy, 124 Nev. 279, 282, 188 P.3d
126, 128 (2008) (quoting Weaver v. State, Dep't of Motor Vehicles, 121
Nev. 494, 498, 117 P.3d 193, 196 (2005)). We defer to an agency's findings
lof fact as long as they are supported by substantial evidence. Law Offices
lof Barry Levinson v. Milko, 124 Nev. 355, 362, 184 P.3d 378, 383-84
(2008). Questions of law are reviewed de novo. Bob Allyn Masonry, 124
Nev. at 282, 183 P.3d at 128.

Under NRS 616C.150(1), to receive workers’ compensation for
[an injury, the injured employee must “establish by a preponderance of the
jevidence that [her] injury arose out of and in the course of [her]
lemployment.” The parties do not dispute that Phillips’ injury occurred
Jduring the course of her employment. Rather, the dispute centers on
whether her injury “arose out of” her employment.

‘This court first interpreted the phrase “arose out of’ in the
context of NRS 616C.150(1) in Rio Suite Hotel & Casino v. Gorsky, 113
Nev. 600, 604, 939 P.2d 1043, 1045-46 (1997). In Gorskv, a casino
lemployee on his way to clock out after his shift ended fell on a flat surface

 
while walking down a hallway that was clear of “any obstacle or foreign
lsubstance.” Id, at 601, 939 P.2d at 1044. This court concluded that the
lemployee did not satisfy the NRS 616C.150(1) “arose out of” prong
Ibecause he failed to present “evidence which demonstrated that his work
lenvironment caused him to fall.” Id, at 604, 939 P.2d at 1046. Instead,
the evidence indicated that his fall was due to his multiple sclerosis. Id, at
[604-05, 989 P.2d at 1046,

This court held that it is insufficient for the employee to show
that the injury occurred merely because the employee was at work and
lemphasized that “the Nevada Industrial Insurance Act is not a mechanism
which makes employers absolutely liable for injuries suffered by
lemployees who are ‘on the job.” Id, at 605, 939 P.2d at 1046. An
lemployee must demonstrate that a “causal connection” exists “between the
jworkplace conditions and how those conditions caused the injury.” Td, at
1604, 939 P.2d at 1046.

We revisited our Gorsky holding in Mitchell, where an

 

jemployee who fell on a flat surface at work while walking toward a
staircase and then rolled down the stairs could not explain the reason for
her fall. Mitchell, 121 Nev. at 180-82, 111 P.3d at 1105, 1106. The
jemployee argued that because she did not have a health affliction that
[caused her to fall and “because staircases are inherently dangerous,” her
injury “arose out of her employment.” Id, at 181, 111 P.8d at 1106. The
/appeals officer determined that the employee's fall did not arise out of her

jemployment, and the district court denied her petition for judicial review.
id. at 181, 111 P.3d at 1105.

In affirming the district court's judgment, we reiterated the
Istandard enunciated in Gorsky and stated that the focus of the NRS

 

 
}616C.150(1) inquiry is not whether an employee's injury resulted from a
personal affliction. Mitchell, 121 Nev. at 182-83, 111 P.3d at 1106-07.
Rather, the employee must show that “the origin of the injury is related to
jsome risk involved within the scope of employment.” Id, at 182, 111 P.3d
Jat 1106 (quoting Gorsky, 113 Nev. at 604, 939 P.2d at 1046). ‘Thus,
because the employee in Mitchell could not explain how the conditions of

 

/her employment caused her to fall on the flat surface, we determined that
‘the appeals officer correctly concluded that she failed to demonstrate the
requisite “causal connection.” Id, We take this opportunity to clarify that
determining the type of risk faced by the employee is an important first
step in analyzing whether the employee's injury arose out of her
employment. In particular, whether an employee has a personal affliction
is relevant to the question of what risk the employee faced and, ultimately,
whether the employee's injury is compensable.

As enunciated initially in Gorsky, an injury arises out of
jemployment if there is “a causal connection between the injury and the
lemployee’s work,’ in which ‘the origin of the injury is related to some risk
involved within the scope of employment.” Mitchell, 121 Nev. at 182, 111
|P.3d at 1106 (quoting Gorsky, 113 Nev. at 604, 939 P.2d at 1046). The

types of risks that an employee may encounter during employment are

lcategorized as “those that are solely employment related, those that are
purely personal, and those that are neutral.” K-Mart Corp. v. Herring,
188 P.3d 140, 146 (Okla. 2008); see also Bentt v. Dept. of Employment
Services, 979 A.2d 1226, 1252 (D.C. 2009); 1 Arthur Larson & Lex K.
[Larson, Larson’s Workers’ Compensation Law §§ 4.01-4.03, at 4-2 to 4-3
(2010).

 

 
Injuries resulting from employment-related risks are “all the
Jobvious kinds of injurfies) that one thinks of at once as industrial
jinjurfies]” and are generally compensable. 1 Larson & Larson, supra, §
4.01, at 4-2. Slips and falls that are due to employment risks “include
{tripping on a defect at employer's premises or falling on uneven or slippery
ground at the work site.” Ill, Consol, Tel, Co, v. Industrial Com’n, 732
N.E.2d 49, 53 (Ill. App. Ct. 2000) (Rakowski, J., specially concurring),

Generally, injuries caused by employment-related risks are deemed to

 

arise out of employment and are compensable. See Bentt, 979 A.2 at
1282; Herring, 188 P.3d at 146; 1 Larson & Larson, supra, § 4.01, at 4-2.
Personal risks are those that are “so clearly personal that,
leven if they take effect while the employee is on the job, they could not
possibly be attributed to the employment.” 1 Larson & Larson, supra, §
4.02, at 4-2. For example, “a fall caused by the [employee's] personal
condition,” such as a bad knee, epilepsy, or multiple sclerosis, is a personal
risk. Mitchell, 121 Nev. at 181 n.7, 111 P.3d at 1106 n.7; see also Gorsky,
118 Nev. at 604-05, 939 P.2d at 1046 (determining that substantial

 

jevidence supported the appeals officer's determination that the employee's
injury did not arise out of his employment, as the evidence indicated that
his fall was due to his multiple sclerosis). As such, an employee's injury
resulting from a personal risk is not compensable. See Gorsky, 113 Nev.
lat 603, 605, 939 P.2d at 1045, 1046; see also Bentt, 979 A.2d at 1232;
Herring, 188 P.3d at 146; 1 Larson & Larson, supra, at 4-1, ch. 4.

Finally, neutral risks are those that are “of neither distinctly
Jemployment nor distinctly personal character.” 1 Larson & Larson, supra,
§ 4.03, at 4-2, See also Mitchell, 121 Nev. at 181 n.7, 111 P.Sd at 1106 n.7

 

(An unexplained fall, originating neither from employment conditions nor

 

 
from conditions personal to the [employee], is considered to be caused by a

 

neutral risk."). Here, Phillips’ injury occurred while traversing a staircase
that was free of defects, and there is no evidence that a risk personal to
Phillips caused her fall. ‘Thus, we conclude that Phillips’ risk of injury
falls within the neutral-risk category.

To determine whether an injury caused by a neutral risk
“arose out of” employment, courts typically apply one of the following three
tests: increased-risk test, actual-risk test, or positional-risk test. Seo, 0.6.
Herring, 188 P.3d at 146; see also 1 Larson & Larson, supra, § 3.01, at 2-4,
‘The most widely utilized is the increased-risk test, see 1 Larson & Larson,

 

supra, § 3.03, at 3-4.1, which “examines whether the employment exposed
the claimant to a risk greater than that to which the general public was
jexposed.” Herring, 188 P.3d at 146. The actual-risk test ignores whether
the risk is common to the public and permits an employee to recover for
his injury “when the employer subjects the worker to the very risk that
injures him.” Id, Finally, the positional-risk test is a “but for” approach
{that evaluates “whether the claimant would have been injured ‘but for the
fact that the conditions and obligations of the employment placed [the]
claimant in the position where he was injured.” Mitchell, 121 Nev. at 182,
111 P.3d at 1106 (alterations in original) (quoting 1 Larson & Larson,
supra, § 3.05, at 3-6). We take this opportunity to provide guidance and
clarity to the bench and bar by adopting a single test to be applied when
determining whether an injury caused by a neutral risk “arose out of”
employment.

We have expressly rejected the positional-risk test for two
reasons. See id. at 183, 111 P.3d at 1106-07. First, the test conflicts with

NRS 616C.150(1) because it reduces the two-prong analysis to one prong:

 

 
 

whether the employee was injured on the job. Id, at 183, 111 P.3d at 1107.
inconsistent with NRS

 

‘Second, the test heavily favors employees and it
616A.010(4), which requires a neutral construction of the Nevada
Industrial Insurance Act (NITA), Id, Our rejection of the positional-risk
test stands.

Although the actualrisk test and positional-risk test are
separate tests, application of the two tests is very similar. In Bivins v, St.
| John’s Regional Health Center, an employee suffered an injury from an
unexplained fall and filed a claim for workers’ compensation benefits. 272
S.W.3d 446, 447-49 (Mo. Ct. App. 2008). In denying the employee's claim,
‘the Labor and Industrial Relations Commission equated the two tests and
determined that the injury would only be compensable under “the but for
reasoning of the positional or actual risk doctrine.” Id, at 449 (emphasis
added). ‘The court agreed with the Commission's determination and
affirmed the order denying compensation. Id, at 452.

The similarity in application of the two tests is further
/highlighted in Green Hand Nursery, Inc. v. Loveless, where the court
stated that it applies “the ‘actual risk’ test to determine whether an injury
‘arises out of the employment.” 684 S.E.2d 818, 822 (Va. Ct. App. 2009).
/But, in affirming the award of workers’ compensation, the court said that
“[tJhe commission could properly infer from thef ] facts that, but for her job
duties and the physical obstacles confronting her, she could have avoided
injury.” Id. (emphasis added). This language is nearly identical to the
positional-risk test previously rejected in Nevada. See Mitchell, 121 Nev.
Jat 182, 111 P.8d at 1106. Because its application is strikingly similar to
the application of the positional-risk test that we have already rejected, we

also reject the actual-risk test, and instead adopt the increased-risk test to

 
een

 

determine whether an injury resulting from a neutral risk is
|compensable.*

Under the increased-risk test, an employee may recover if she
|is subjected “to a risk greater than that to which the general public [is]
exposed.” Herring, 188 P.3d at 146. Even if a risk to which the employee
is exposed “is [not] qualitatively . . . peculiar to the employment,” the
injury may be compensable as long as she faces an “increased quantity of a
risk.” 1 Larson & Larson, supra, § 3.03, at 3-4.1. Thus, when an employee
“is exposed to a common risk more frequently than the general public,”
there may be an increased risk. Nascote Industries v. Industrial Com'n,
820 N.E.2d 531, 535 (Ill. App. Ct. 2004); see also 1 Larson & Larson,
supra, § 3.03, at 3-4.

 

We conclude that the increased-risk test strikes an
adequate balance between the employee's right to receive compensation
for a work-related injury and the employer's right not to be held liable for
levery injury suffered by an employee in the workplace. Maintaining such
Ja balance satisfies the requirement in NRS 616A.010 that Nevada's
| workers’ compensation laws be interpreted in a neutral manner.

The act of descending a staircase at work, in and of itself, does
fnot present a greater risk than that faced by the general public; however,
lwhen an employee is required to use the stairs more frequently than a
member of the general public, she faces an increased risk of injury. See
|Nascote Industries, 820 N.E.2d at 535; see also 1 Larson & Larson, supra,

We previously applied the increased-risk test in one very narrow
lcontext—to determine whether a sexual assault that occurred at the
claimant's place of work arose out of her employment. See Wood v.
‘Safeway, Inc., 121 Nev. 724, 734, 121 P.3d 1026, 1032-33 (2008).

10

 
 

§ 9.03, at 34.1 to 3-5, Moreover, steps of an unusual height, see Haley v,
‘Springs Global U.S., Inc,, 681 S.E.2d 62, 65 (Va. Ct. App. 2009), or the
manner in which an employee is required to perform her job may increase
her risk of falling on a staircase. See Marion Correctional Center v.
Henderson, 458 S.E.2d 301, 303 (Va. Ct. App. 1995) (determining that
because “[o]bservation of the guard towers [as the employee descended the
staircase] was one of the security functions of his employment,” the
jemployee faced an increased risk of falling).

Here, we conclude that substantial evidence in the record
supports the conclusion that under the increased-risk test, Phillips’ injury
arose out of the course of her employment. Phillips worked eight-hour
shifts, during which she was required to take six periodic breaks. To
access the employees’ break room, employees had to traverse two flights of
stairs, There is no evidence in the record demonstrating that employees
were permitted to use any other means of ingress and egress to and from
the break room. Because the employees’ periodic breaks were mandatory,
Phillips was required to use the staircase six times during each shift. In
act, in its opening brief, Rio calculated that during the course of Phillips’
17-year employment, she traversed the stairs approximately 25,000 times.
We conclude that the frequency with which Phillips was required to use
the stairs subjected her to a significantly greater risk of injury than the
risk faced by the general public.

In 50 concluding, we emphasize that it is not the mere act of
fusing the stairs that subjected Phillips to a risk greater than that faced by
the general public. Additionally, we note that under the increased-risk
test, whether a fall is explained or unexplained is irrelevant. The key
inquiry is whether the risk faced by the employee was greater than the

u

 
risk faced by the general public. Thus, if an employee suffers an
inexplicable fall, she can recover if she makes the requisite showing.
Accordingly, we clarify Mitchell to the extent that it holds that
unexplained falls are never compensable,

In applying the increased-risk test, we conclude that
substantial evidence in the record supports the conclusion that Phillips’
injury arose out of the course of her employment. Accordingly, we affirm

Awe, 5

Hardesty

the order of the district court.

We concur:

DAR aot , Ou.
Parraguirre