Title: DAN'S SUPERMARKET v. PATE

State: wyoming

Issuer: Wyoming Supreme Court

Document:

DAN'S SUPERMARKET v. PATE2001 WY 10433 P.3d 1121Case Number: 00-226Decided: 11/02/2001
 OCTOBER TERM, A.D. 2001

                                                           

DAN'S 
SUPERMARKET, 

Appellant(Petitioner),

 and

 STATE OF 
WYOMING ex rel. WYOMING

WORKERS' 
SAFETY AND COMPENSATION

DIVISION,

                                       Appellant(Petitioner),

v.

CONSTANCE 
K. PATE, 

Appellee(Respondent).

W.R.A.P. 
12.09(b) Certification from the District Court of Campbell 
County

Representing 
Appellant Dan's Supermarket:

Kate M. 
Fox of Davis & Cannon, Cheyenne, Wyoming.

Representing 
Appellant State of Wyoming ex rel. Wyoming Workers' Safety and Compensation 
Division:

Gay 
Woodhouse, Wyoming Attorney General; John W. Renneisen, Deputy Attorney General; 
Gerald L. Laska, Senior Assistant Attorney General; David L. Delicath, Assistant 
Attorney General.  Argument by Mr. 
Delicath.

Representing 
Appellee:

R. 
Douglas Dumbrill, Gillette, Wyoming.

 Before 
LEHMAN, C.J., GOLDEN, HILL, and KITE, JJ.; and SPANGLER, D.J. 
(Retired).

  

GOLDEN, 
Justice.

 [¶1]           
Appellants 
Dan's Supermarket (Employer) and the Wyoming Workers' Safety and Compensation 
Division (Division) challenge the payment of benefits to Appellee Constance K. 
Pate (Pate) for a 1996 work-related injury suffered while employed by Employer, 
contending that the hearing examiner improperly charged them with the burden of 
proving that Pate had suffered a new injury while working for another 
employer.  Following a hearing, the 
hearing examiner ruled that Pate had suffered a continuation of pain symptoms 
from the 1996 injury, and the district court certified the case to this Court 
pursuant to W.R.A.P. 12.09(b).

[¶2]           
We hold 
that the hearing examiner properly determined that Pate had sustained her burden 
of proving all essential elements of her claim, and that the evidence supports 
the award of benefits.  The order 
granting benefits is affirmed.

ISSUES

[¶3]           
The 
statement of issues presented by Employer are:

(1) Did 
the hearing examiner apply an incorrect rule of law when he imposed the burden 
of proof in this contested case on the former employer and not on the 
Claimant?

(2) Is 
the decision of the hearing examiner unsupported by substantial evidence, 
without consideration and in disregard of the facts and 
circumstances?

The 
statement of the issues presented by the Division are:

1.  Did the Hearing Examiner err by 
improperly relieving Ms. Pate of her burden of proving every element of her 
claim?

2.  Is the Hearing Examiner's finding that 
there was no material aggravation of Ms. Pate's prior injury arbitrary, 
capricious, an abuse of discretion, or otherwise not in accordance with 
law?

Appellee 
Pate believes that the issues are:

1) Did 
Constance K. Pate suffer symptoms and incur medical bills which were the natural 
and expected effects of her work-related injury and its required 
surgeries?

2)  Should the Employer and the State be 
granted an indulgence in workers' compensation procedures by relieving them from 
their due process burden of proving affirmative 
allegations?

FACTS

[¶4]           
While 
working for Dan's Supermarket in 1996, Pate suffered a work-related injury that 
required back surgery.  Employer did 
not contest coverage of the injury, and benefits and a permanent partial 
disability award were paid.  Ongoing 
pain led to two more surgeries including fusion surgery.  She continued to suffer occasional pain 
when doing housecleaning or other chores and saw her doctor in June of 1998 for 
back pain symptoms.  She returned to 
work in May of 1999, taking a job at a local convenience store, and on September 
16, 1999, while moving boxes, she experienced more back pain.  She continued to work that day and 
sought medical attention later that month, telling doctors about the pain she 
experienced that day.  The pain 
resolved with little treatment, and tests indicated that no new injury had 
occurred.  She filed a claim with 
the convenience store's private insurer of workers' compensation,1 but it did not respond to her 
claim.  She then filed a claim with 
the Division which viewed her injury as new and denied her benefits.  

[¶5]           
The 
hearing examiner determined that Pate's preexisting condition was a work-related 
injury that was established as a matter of fact, and the issue was whether 
Pate's claim was a continuation of her 1996 work-related injury for which the 
Division was responsible or a new injury that required Pate to file a claim with 
the convenience store's private insurer.  
It further determined that the Division and Employer bore the burden of 
proving that the injury resulted from a new work-related condition and was not 
the result of the preexisting condition caused by her 1996 work-related 
injury.  The Division and the 
Employer presented evidence in an attempt to establish that Pate's injury was a 
sufficient material aggravation of her preexisting condition to require that it 
be considered a new injury. 

[¶6]           
The 
hearing examiner reviewed the evidence and determined that a radiological report 
indicated that no new injury had occurred and found that report was supported by 
Pate's testimony that she had experienced chronic pain since the 1996 injury and 
the testimony of two doctors explaining that Pate's symptoms were typical of 
those experienced by people who have had multiple back surgeries including 
fusion.  The hearing examiner found 
that one doctor explained that Pate's migratory and intermittent pain could be 
caused by the scar tissue resulting from the multiple surgeries and that the 
scar tissue would cause some impingement upon the roots of the sciatic 
nerves.  The hearing examiner ruled 
that this explanation was confirmed by the radiology report.  It also found that no doctor had found 
evidence of a new injury.

[¶7]           
The 
Division and Employer submitted authority that they contended supported finding 
that, while lifting boxes, Pate aggravated the old injury in such a material way 
that legally it constituted a new injury.  
The hearing examiner examined that authority and determined that all the 
cases were fact-driven and did not articulate a bright-line test to make such a 
determination.  It found that the 
authority did not require it to decide that Pate had suffered a new injury.  The Division was ordered to pay Pate's 
medical bills for lower back treatment and diagnosis incurred.  This appeal 
followed.

DISCUSSION

[¶8]           
Allocation 
of the burden of proof is a matter of law.  
Corman v. State ex rel. Wyo. Workers' Comp. Div., 909 P.2d 966, 
970 (Wyo. 1996). Conclusions of law of an administrative agency are affirmed if 
they are found to be in accordance with law. Id.; Cordova v. Holly Sugar 
Co., 882 P.2d 880, 882 (Wyo. 1994); Aanenson v. State ex rel. Workers' 
Comp. Div., 842 P.2d 1077, 1079 (Wyo. 1992). 

[¶9]           
When the 
party charged with the burden of proof has failed to meet that burden, we review 
the case under the arbitrary, capricious, abuse-of-discretion, or otherwise not 
in accordance with law standard.  
Keck v. State ex rel. Wyo. Workers' Safety and Comp. Div., 
985 P.2d 430, 432 (Wyo. 1999); City of Casper v. Utech, 895 P.2d 449, 452 
(Wyo. 1995).  Under the arbitrary, 
capricious and abuse of discretion standard, we are charged with examining the 
entire record.  Wyo. Stat.  Ann. § 16-3-114(c) (LexisNexis 2001); 
Utech, 895 P.2d  at 452.   
In our examination and review of a hearing examiner's determination, we 
defer to the hearing examiner's findings of fact.  We will examine conflicting and 
contradictory evidence to see if the hearing examiner reasonably could have made 
its findings based on all the evidence before it.  The findings of fact may include 
determinations of witness credibility, as the hearing examiner is charged with 
determining the credibility of the witnesses.  In our review, we will not overturn the 
hearing examiner's determinations regarding witness credibility unless they are 
clearly contrary to the overwhelming weight of the evidence.  Hurley v. PDQ Transport, Inc. 6 P.3d 134, 137 (Wyo. 2000).  

[¶10]       
When we 
review mixed questions of law and fact, our standard has been stated this 
way:

When an 
agency's determinations contain elements of law and fact, we will not treat them 
as findings of fact.  We extend 
deference only to agency findings of "basic fact."   When reviewing a finding of 
"ultimate fact," we divide the factual and legal aspects of the finding to 
determine whether the correct rule of law has been properly applied to the 
facts.  If the correct rule of law 
has not been properly applied, we do not defer to the agency's finding but 
correct the agency's error in either stating or applying the 
law.

Union 
Pacific R.R. Co. v. State Bd. of Equalization, 802 P.2d 856, 860-61 (Wyo. 1990).

[¶11]        
We review an 
administrative agency's findings of fact by applying the substantial evidence 
standard.  Our task is to examine 
the entire record to determine whether substantial evidence supported the 
hearing examiner's findings.  We 
will not substitute our judgment for that of the hearing examiner when 
substantial evidence supports his decision.  Substantial evidence is relevant 
evidence which a reasonable mind might accept in support of the agency's 
conclusions.  Frontier Refining, Inc. v. Payne, 2001 WY 49, ¶6, 23 P.3d 38, ¶6 
(Wyo. 2001).  Accordingly, "we 
examine only the evidence which favors the prevailing party, allowing every 
favorable inference, while omitting consideration of any conflicting 
evidence."  Id.  

[¶12]       
The 
Employer first takes issue with the hearing examiner's statement that "[i]t 
doesn't matter who has the burden of proof; that pre-existing condition has been 
established as a matter of fact."  
Employer claims that our decisions involving similar facts indicate this 
statement is an incorrect statement of the law and the hearing examiner's 
decision should be reversed.  

[¶13]       
The 
hearing examiner found:

The 
Claimant was injured while working for Dan's Supermarket in 1996.  She probably suffered from pre-existing 
lower spine weakness and degeneration which was worsened by lifting inventory at 
work for that employer.  She 
underwent a series of back surgeries following that injury and received a 
permanent partial disability award. 

Employer 
refers us to Walsh v. State ex rel. Wyoming Workers' Comp. Div., 931 P.2d 241 (Wyo. 1997).  In 1984, Walsh was 
hospitalized for back pain, and in 1989, he suffered a compensable work-related 
back injury.  Walsh left that 
employment in 1990, and again injured his back in 1993 while working at his 
small farm baling hay.  
Walsh, 931 P.2d  at 243.  
Walsh claimed that his symptoms were a continuation of the 1989 
compensable injury and filed for benefits.  
This Court determined that he had the burden of proving that his work 
accident, not a preexisting condition, caused the condition and upheld the 
ruling that Walsh had not carried his burden.  Id.   

[¶14]       
Employer 
asserts that Walsh establishes that Pate should have had the burden of 
showing that her condition before the 1996 work-related injury was not 
responsible for her present symptoms.  
However, our review of the record indicates that any pre-1996 condition 
was not properly at issue at the hearing.  
As the hearing examiner determined, the Division and Employer contended 
that Pate had suffered a new work-related injury and her remedy lay with the 
private insurer of the convenience store.  
The Division's denial letter and prehearing memorandum showed this was 
the basis for its denial.  Further, 
the Employer's prehearing memorandum conceded that "Pate was employed at Dan's 
when she injured her back in January, 1996," and contended that the issue to be 
determined at the hearing was whether Pate suffered a new injury at the 
convenience store. 

[¶15]       
We have 
previously ruled that "[p]leadings are used to give parties notice of the nature 
of claims and defenses, to narrow the issues, and to guide the parties and the 
court in the conduct of the case.  
If the pleadings and notice of hearing are to mean anything in a 
contested case hearing, the hearing examiner must be limited to considering only 
those issues presented in the notice and pleadings."  Ireland v. State ex. rel. Wyo. 
Workers' Comp. Div., 998 P.2d 398, 401 (Wyo. 2000) (citations omitted).  Under these circumstances, the hearing 
examiner could not properly impose a burden upon Pate to prove that a condition 
preexisting before her 1996 work-related injury was not responsible for her 
present condition.  Accordingly, the 
hearing examiner did not consider it and properly stated that the cause of the 
1996 work-related injury was undisputed.   We find the hearing examiner made 
no error in failing to consider any condition existing before 1996.  

[¶16]       
The 
Division contends that the hearing examiner erred in failing to assign Pate the 
burden of proving that she had not suffered a new injury, claiming that it and 
the Employer were given the burden of proving that the 1996 injury did not cause 
the 1999 symptoms.  In support of 
this contention, it relies upon Corman, arguing that it  "dictates that the claimant must prove 
her pre-existing condition from the 1996 injury caused her symptoms in 1999, 
because that causal relationship goes to the . . . central factual issue." The 
hearing examiner's order found Pate did have this burden of proof, and the 
Division contends that burden included proving no material aggravation caused a 
new injury because causation is an essential element of Pate's claim.    Concerning the complex 
burden-of-proof issue, we have said:

The 
general term, burden of proof, identifies two separate legal doctrines:  the burden of persuasion; and the burden 
of production, also termed the burden of producing evidence or the burden of 
going forward with the evidence.  
The burden of persuasion is attached to the party "who runs the risk of 
nonpersuasion."   During a 
trial, this means if the "party with the burden of persuasion has not sustained 
it by a fair preponderance of the evidence--if the evidence is in equipoise or 
the opposing party's preponderates--the party with the burden must fail."   The burden of producing evidence 
is "the obligation of the party to present at the appropriate time . . . 
evidence on the issue involved of sufficient substance to permit the fact finder 
to act upon it."   The burden 
of producing evidence shifts during the presentation of evidence.  The burden of persuasion, which 
generally does not shift unless by the operation of a legal presumption, becomes 
operative only after all the evidence is submitted.

Casper 
Iron & Metal, Inc. v. Unemployment Insur. Comm'n, 845 P.2d 387, 393 (Wyo. 1993) (citations omitted); see also Bando v. Clure 
Bros. Furniture, 980 P.2d 323, 330 (Wyo. 1999).  In determining which party bears the 
burden of proof, we consider the applicable substantive statutes.  Casper Iron at 393.  Here, the applicable statute is Wyo. 
Stat. Ann. § 27-14-102(a)(xi)(F) (LexisNexis 2001):2

(xi)  "Injury" means any harmful change in the 
human organism other than normal aging and includes damage to or loss of any 
artificial replacement and death, arising out of and in the course of employment 
while at work in or about the premises occupied, used or controlled by the 
employer and incurred while at work in places where the employer's business 
requires an employee's presence and which subjects the employee to 
extrahazardous duties incident to the business.  "Injury" does not 
include:

****

            
(F) Any injury or condition preexisting at the time of employment with 
the employer against whom a claim is made[.]

            

[¶17]       
Generally, 
this language imposes the burden upon the claimant to prove that her work 
accident, not her preexisting condition, caused a compensable injury.  Corman, 909 P.2d  at 970.  A preexisting condition is 
noncompensable unless the claimant can prove that the work-related injury 
materially aggravated the preexisting injury resulting in a compensable 
injury.  Brees v. Gulley 
Enterprises, Inc., 6 P.3d 128, 132 (Wyo. 2000).  Pate did not contend that she had 
materially aggravated a noncompensable preexisting condition, but instead, based 
her claim for benefits upon continued symptoms from the 1996 work-related 
injury.  Accordingly, it is her 
burden to prove that a continuation of the 1996 work injury caused the new onset 
of symptoms.  Regarding the Division 
and Employer's assertion that she also bore the burden of proving that she had 
not suffered a material aggravation, the hearing examiner 
found:

[W]here 
the Claimant is appearing to say that her pre-existing condition is causing 
continuing problems which require medical treatment, and the employer is arguing 
that an intervening or superceding cause[3] has intervened, putting the burden 
of proving a negative on the claimant does not seem to be a useful or practical 
approach to allocating the burden of proof.  If the current convenience store 
employer were participating in the hearing and arguing "preexisting condition," 
then the claimant would have the burden of proving freedom from a pre-existing 
condition or showing that the new employment caused a material aggravation of 
the pre-existing condition.  
However, where the former employer is appearing to urge what is 
essentially an intervening or superceding cause defense, the burden of proof 
should be placed upon the former employer to show that there actually was an 
intervening or superceding cause which relieves the former employer of its 
continuing obligation to the injured worker.  Accordingly, the Office will place the 
burden of proof upon the former employer under these limited circumstances. 

The 
Division and Employer claim that Corman does not support this rationale, 
and at oral argument the parties also relied upon the Walsh case 
previously discussed and Pino v. State ex rel. Wyo. Workers' Comp. Div., 
996 P.2d 679 (Wyo. 2000).  

[¶18]       
Corman 
presented the issue whether the Division had the burden to prove that Corman's 
neck condition preexisted his work accident.  Corman recognized that he had the burden 
to prove that his present neck condition was work-related but contended that he 
did not have the burden to establish that the condition did not preexist the 
work-related accident.   
Because a preexisting condition was an exception to the definition of 
injury in the statute, Corman contended that the legislature intended to create 
the equivalent of an affirmative defense or bar, the burden of proving which 
would fall on the employer or the Division. 

[¶19]       
This 
Court analyzed the issue thus:

While 
Appellant's arguments have a general validity, they cannot be applied in this 
case to provide him relief.  The 
first problem is his assumption that the existence of a preexisting condition 
creates an affirmative defense or bar. 

* * * 
*

[A]n 
affirmative defense or bar is a legal defense to a claim, as opposed to a 
factual dispute as to an essential element of the claim.  The claimant bears the burden of proof 
as to the latter, while the contestant bears the burden of proof as to the 
former.  This dichotomy is preserved 
in Wyo.R.Civ.P. 8 and 12, which allow "matter[s] constituting an avoidance" to 
be heard as questions of law, on motion prior to any trial on the 
merits.

            
When viewed in this light, the issue of the existence of a preexisting 
condition is indistinguishable from the central factual issue--did the injury 
"arise out of and occur in the course of employment?" If the injury resulted 
from a preexisting condition, rather than from the work-related accident, no 
compensable injury occurred.  
Consequently, when there is a conflict in the evidence as to this 
question, the claimant must prove by a preponderance of the evidence that the 
injury was work-related and not preexisting.

Corman, 
909 P.2d  
at 969.  Corman recognized, 
however, that another decision seemed to conflict with its decision and 
said:  

            
In seeming conflict with this reasoning, this Court has previously held 
that the issue of an employee's culpable negligence in causing his own injuries 
must be raised as an affirmative defense, with the employer bearing the burden 
of proof on such issue. Hotelling v. Fargo-Western Oil Co., 33 Wyo. 240, 
246, 248, 238 P. 542, 544 (1925).  
Culpable negligence, like preexisting condition, is one of the exceptions 
to compensable injury found in Wyo. Stat. § 27-14-102(a)(xi).  A close reading of Hotelling, 
however, reveals a decision precisely in line with our holding today.  In Hotelling, the Court 
presupposed an "injury sustained in extrahazardous employment as defined by the 
statute."   In other words, the 
employee had already presented a prima facie factual case of 
compensability.  It then became the 
employer's burden to prove his legal avoidance theory--his affirmative 
defense--culpable negligence.  That 
is the same logic applied today in retaining the employee's duty to prove a 
compensable injury.

Corman, 909 P.2d  at 970.  

[¶20]       
The 
hearing examiner applied that logic here.  
Pate had presented a prima facie factual case of compensability, and the 
employer and Division were seeking to legally avoid their responsibilities that 
had arisen because of the 1996 injury.  
Under these limited circumstances, the hearing examiner did not 
err.

[¶21]       
As 
already seen, Walsh does not apply because the 1996 work-related injury 
was conceded, and Pino does little more than reaffirm that claimants have 
the burden of establishing all the statutory elements which comprise a 
compensable injury by a preponderance of the evidence. Pino, 996 P.2d  at 684.  Pino discussed burden of proof related 
to the second compensable injury rule, specifically ruling that Pino had the 
burden of proving the essential element of causation.  Id. at 685.  A workplace accident resulted in a mild 
disc bulge in Pino's spine.  He 
received treatment, but continued to experience pain that occasionally required 
him to miss work.  About twenty-one 
months after his accident, the disc herniated when Pino coughed.  We held that Pino had carried his burden 
of proving that the herniation was compensable because it resulted from the 
initial accident.  Id. at 
687.  Neither Walsh nor 
Pino require that we find that the hearing examiner 
erred.

Evidentiary 
Support for Decision

[¶22]       
Employer 
contends that the hearing examiner ignored the unequivocal statement of Pate's 
treating neurosurgeon that her pain symptoms were the result of her recent 
lifting injury in September, and instead, the hearing examiner chose to rely 
upon his own evaluation of a radiological report.  The Division claims that the hearing 
examiner's statement that the search for evidence of material aggravation turned 
up negative results is proved inaccurate by examining various statements that 
Pate made to doctors indicating that she had suffered a material aggravation of 
her back condition on September 16, 1999.

[¶23]       
A review 
of the entire record indicates that Pate's pain was a chronic condition from the 
time of her 1996 injury.  The pain 
caused her to undergo several surgeries in an attempt to alleviate it and 
continued as she went about routine activities.  After her return to work, Pate 
experienced pain symptoms and did so on September 16, 1999; however, she 
continued to work that day and for almost a month before she sought medical 
advice as to whether she had suffered a new injury.  

[¶24]       
The 
hearing examiner found that radiological reports showed that Pate had not 
suffered a new injury and her pain symptoms were most likely a continuation of 
her chronic condition.  Two of 
Pate's treating physicians provided testimony that her pain had worsened but 
because radiological reports reflected no changes, it was their opinion that she 
had not suffered a new injury.  A 
third doctor, to whom Pate had been referred, stated in a letter that Pate was 
suffering severe right leg discomfort consistent with sciatica.  It was his opinion that this most recent 
leg pain is a new onset problem and the result of her recent lifting injury in 
September. The hearing examiner, however, reconciled this observation with other 
medical evidence indicating that Pate's migratory and intermittent pain could be 
caused by the scar tissue resulting from the multiple surgeries and that the 
scar tissue would cause some impingement upon the roots of the sciatic 
nerves.  The hearing examiner ruled 
that this explanation was confirmed by the radiology report, and supported a 
finding that no doctor had found evidence of a new injury.  These findings are supported by the 
evidence and formed the basis of the hearing examiner's reasonable 
conclusions.  The order granting 
benefits is affirmed.

FOOTNOTES

1The Division tells us that under Wyoming 
statute a convenience store may choose to provide its own private workers' 
compensation insurance and not participate in the state program.  

2This subsection has not been amended 
since the date of injury in 1996.

3The hearing examiner had previously 
noted that, in this case, alleging an intervening or superceding cause, was, in 
the parlance of workers' compensation law, an allegation there was sufficient 
material aggravation of a preexisting condition on or about September 16, 
1999.