Title: Adela S. Hagen v. Labor and Industry Review Commission

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
94-0374 
 
 
Complete Title 
of Case: 
 
Adela S. Hagen, 
 
Plaintiff-Appellant 
 
v. 
Labor and Industry Review Commission, Hess 
Memorial Hospital Association, Inc., a Wisconsin 
corporation and Fire and Casualty Insurance 
Company of Connecticut, 
 
Respondents-Respondents-Petitioners. 
 
 
ON REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at:  201 Wis. 2d 51, 547 N.W.2d 812 
 
 
(Ct. App. 1996) 
 
 
PUBLISHED 
 
 
Opinion Filed: 
June 6, l997 
Submitted on Briefs: 
 
Oral Argument: 
March 4, 1997 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Juneau 
 
JUDGE: 
John W. Brady 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the respondent-respondent-petitioner, LIRC, 
there was oral argument by Lowell E. Nass, assistant attorney 
general, with whom on the briefs was James E. Doyle, attorney 
general. 
 
 
For the respondents-respondents-petitioners, Hess 
Memorial Hospital and Fire & Casualty Insurance Company of 
Connecticut, there were briefs by Ronald S. Aplin, Frederick J. 
Smith and Peterson, Johnson & Murray, S.C., Madison and oral 
argument by Ronald S. Aplin 
 
 
For the plaintiff-appellant there was a brief by 
John R. Orton and Curran, Hollenbeck & Orton, S.C., Mauston and 
oral argument by John R. Orton. 
 
 
Amicus curiae brief was filed by Michael H. 
Gillick and Murphy, Gillick, Wicht and Prachthauser, Milwaukee 
for the Wisconsin Academy of Trial Lawyers. 
 
 
 
Amicus curiae brief was filed by Thomas M. Rohe 
and Otjen, Van Ert, Stangle, Lieb & Weier, S.C., Milwaukee for 
the Wisconsin Insurance Alliance. 
 
 
Amicus curiae brief was filed by James R. Gorton 
and Denissen, Kranzush, Mahoney & Ewald, S.C., Green Bay for the 
Civil Trial Counsel of Wisconsin. 
 
 
Amicus curiae brief was filed by Eric E. Hobbs 
and Michael, Best & Friedrich, Milwaukee for the Wisconsin 
Manufacturers & Commerce. 
 
No. 94-0374 
 
1 
 
NOTICE 
This opinion is subject to further editing 
and modification.  The final version will 
appear in the bound volume of the official 
reports. 
 
 
No. 94-0374 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
Adela S. Hagen, 
 
  
Plaintiff-Appellant, 
 
 
v. 
 
Labor and Industry Review Commission, Hess 
Memorial Hospital, Inc., a Wisconsin 
corporation, and Fire and Casualty 
Insurance Company of Connecticut, 
 
 
Respondents-Respondents-Petitioner. 
 
FILED 
 
JUN 6, 1997 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed.
  
¶1 
ANN WALSH BRADLEY, J.   The respondents, the Labor and 
Industry 
Review Commission 
(LIRC), 
Hess Memorial Hospital 
Association, 
Inc. 
(the 
Hospital), 
and 
Fire 
and 
Casualty 
Insurance Company of Connecticut (the Insurer), seek review of a 
published decision of the court of appeals.
1  The court of 
appeals reversed a circuit court decision which upheld LIRC's 
determination that injuries sustained by the plaintiff, Adela S. 
Hagen, were scheduled injuries for purposes of the Wisconsin 
Worker's Compensation Act (WCA).  The petitioners assert that 
                     
1 See Hagen v. LIRC, 201 Wis. 2d 51, 547 N.W.2d 812 (Ct. 
App. 1996)(reversing a decision of the Circuit Court for Juneau 
County, John W. Brady, Judge). 
No. 94-0374 
 
2 
the court of appeals erroneously failed to defer to LIRC's long-
standing view that under the permanent partial disability (PPD) 
schedule,
2 a shoulder injury is measured as "[t]he loss of an arm 
at the shoulder."  We conclude that the court of appeals should 
have deferred to LIRC's reasonable interpretation.  We also 
conclude that there is credible and substantial evidence 
supporting LIRC's determination that Hagen suffered only a 
scheduled permanent partial disability as a result of her 
injuries.  Accordingly, we reverse the decision of the court of 
appeals.  
¶2 
Hagen worked as a nurse's aide at the Hospital from 
1979 until 1989.  On May 5, 1989, while lifting a patient out of 
a wheelchair and into bed, Hagen felt a "pull" in her right arm, 
chest, and shoulder that resulted in immediate pain and 
difficulty in lifting objects.  After reporting her injury to 
the Hospital, Hagen saw a number of physicians and pursued 
several 
months 
of 
treatment 
involving 
physical 
therapy, 
medication, and eventual surgery on her shoulder. 
                     
2 Section 102.52(1) of the Wisconsin Statutes (1995-96) sets 
forth the permanent partial disability schedule.  It provides in 
relevant part: 
In cases included in the following schedule of 
permanent partial disabilities indemnity shall be paid 
for the healing period, and in addition, for the 
period specified, at the rate of two-thirds of the 
average weekly earnings of the employe, to be computed 
as provided in s. 102.11: 
(1) The loss of an arm at the shoulder, 500 weeks . . . . 
Unless otherwise indicated, all future statutory references are 
to the 1995-96 volume. 
No. 94-0374 
 
3 
¶3 
Hagen filed a worker's compensation claim.  At the 
hearing before the administrative law judge (ALJ), Hagen 
testified that she suffered from injuries to her arm, shoulder 
and upper back.  Medical testimony and records supported her 
assertion.  For example, Dr. James Logan testified as to Hagen's 
limited range of motion and pain in the shoulder and bicep area. 
 He also stated that the poor posture produced by Hagen's 
injuries may eventually result in abnormal curvature of her 
spine.  Dr. Diana Kruse, who performed surgery on Hagen's 
shoulder, concluded that she would: 
 
award an additional 5% wholeperson disability on the 
basis of the myofascial pain in the upper and mid back 
area.  This is related to the shoulder girdle muscle 
attachments to the trunk and abnormal muscle tension 
in the upper, mid and low back areas because of 
chronic pain that the patient experiences. 
¶4 
Other 
medical 
evidence 
suggested 
that 
Hagen's 
permanent partial disability was limited to injuries to the 
shoulder and arm.  Dr. Panna Varia initially concluded that 
Hagen had a three percent total body disability due to right 
shoulder problems and the myofascial pain symptoms.  However, 
after Dr. Kruse performed surgery on Hagen's shoulder, Dr. Varia 
changed her opinion, rating Hagen's permanent partial disability 
as seven percent at the shoulder joint. 
¶5 
The ALJ determined that Hagen's shoulder and arm 
injuries were scheduled injuries.  The ALJ also found that 
Hagen's back injury was "very minor and not serious enough to 
serve as a basis for a loss of earning capacity claim."  LIRC 
adopted the ALJ's factual determinations, with one modification 
not pertinent to our inquiry.  In its memorandum opinion, LIRC 
found that "there is no doubt" that Hagen suffered both an arm 
No. 94-0374 
 
4 
and a shoulder injury.  However, LIRC concluded that both were 
included in the PPD schedule under § 102.52(1), "[t]he loss of 
an arm at the shoulder." 
¶6 
As for Hagen's back injury, LIRC made the following 
finding of fact: 
 
[w]hile applicant may have occasional problems in 
areas beyond the shoulder these appear to be of a 
relatively acute, transient, non-permanent nature.  
When compared to her shoulder and arm problems there 
is further doubt that any of these minor problems, per 
se, render applicant less employable.  Rather it is 
the scheduled problems with applicant's shoulder and 
arm that are significant. 
On that basis, LIRC determined that Hagen's back injury did not 
constitute an unscheduled permanent partial disability. 
 ¶7 Hagen sought judicial review, and the circuit court 
affirmed LIRC's decision.  Hagen appealed and the court of 
appeals reversed, concluding that LIRC's interpretation of 
§ 102.52(1) was contrary to the plain meaning of the statute.  
While the court of appeals agreed with LIRC that Hagen suffered 
a scheduled arm injury, the court concluded that Hagen's 
shoulder injury was not covered by the § 102.52(1) PPD schedule. 
 The court did not address LIRC's factual determination that 
Hagen suffered no permanent partial disability in areas beyond 
the arm and shoulder.  LIRC, the Hospital, and the Insurer 
petitioned this court for review. 
¶8 
The first issue in this case is whether the § 102.52 
provision covering "[t]he loss of an arm at the shoulder" 
includes an injury to the shoulder.  Statutory interpretation is 
a question of law which a court generally reviews under a de 
novo standard.  Stockbridge School Dist. v. DPI, 202 Wis. 2d 
214, 219, 550 N.W.2d 96 (1996).  However, a reviewing court will 
No. 94-0374 
 
5 
employ one of three levels of deference when considering an 
administrative agency's interpretation of a statute: no weight, 
due weight, or great weight.  See Jicha v. DILHR, 169 Wis. 2d 
284, 290-91, 485 N.W.2d 256 (1992).   
¶9 
Great weight deference to an agency's interpretation 
of a statute is appropriate when: (1) the agency is charged by 
the 
legislature 
with 
administering 
the 
statute; 
(2) 
the 
interpretation of the agency is one of long standing; (3) the 
agency employed its expertise or specialized knowledge in 
forming the interpretation; and (4) the agency's interpretation 
will provide uniformity in the application of the statute.  See 
Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 660, 539 N.W.2d 98 
(1995).  
¶10 Applying 
the 
four-factor 
test 
set 
forth 
in 
Harnischfeger 
to 
this 
case, 
we 
conclude 
that 
LIRC's 
interpretation of § 102.52(1) is entitled to great weight 
deference.  First, the Department of Workforce Development (DWD)
3 
is charged under Wis. Stat. § 102.14(1) with administering 
Chapter 102, and both the DWD and LIRC are charged with 
interpreting the statute and making factual findings when 
determining a claimant's entitlement to worker's compensation 
benefits.
4  Second, we note that DWD and LIRC have consistently 
                     
3 The Department of Workforce Development, also known as the 
Department of Industry, Labor and Job Development, was formerly 
known as the Department of Industry, Labor and Human Relations. 
 See 1995 Wis. Act 289, § 275; 1995 Wis. Act 27, §§ 9130(4), 
9430(5). 
4 It is LIRC's statutory interpretation and finding of fact 
that are reviewed on appeal.  See Langhus v. LIRC, 206 Wis. 2d 
493, 500, 557 N.W.2d 450 (Ct. App. 1996). 
No. 94-0374 
 
6 
interpreted the phrase "the loss of an arm at the shoulder" to 
include injuries to the shoulder.
5  Third, we conclude that DWD 
and LIRC employed their specialized knowledge in the areas of 
employment 
injuries 
and 
compensation 
in 
arriving 
at 
the 
determination 
that 
shoulder 
injuries 
are 
scheduled 
under 
§ 102.52.  Finally, DWD and LIRC's interpretation provides 
uniformity in the application of § 102.52(1) to shoulder 
injuries.   
¶11 Having determined that great weight deference is the 
proper standard of review in this case, we will sustain LIRC's 
interpretation of § 102.52(1) unless it is unreasonable.  Lisney 
v. LIRC, 171 Wis. 2d 499, 506, 493 N.W.2d 14 (1992).  An 
agency's interpretation of a statute is unreasonable if it 
"directly contravenes the words of the statute, is clearly 
contrary to legislative intent, or is otherwise . . . without 
rational basis."  Lisney, 171 Wis. 2d at 506.   
¶12 The court of appeals concluded, and Hagen asserts, 
that LIRC's interpretation of § 102.52(1), which includes her 
shoulder injury as a scheduled injury, directly contravenes the 
language of the statute, is unreasonable, and is without a 
rational basis.  Hagen v. LIRC, 201 Wis. 2d 51, 57, 547 N.W.2d 
812 (Ct. App. 1996).  According to the court of appeals, the 
plain meaning of the § 102.52(1) phrase, “[t]he loss of an arm 
                     
5 See, e.g., Kenyon v. Desmonds Formal Wear, LIRC Nos. 
87068133, 93033619, 1996 WL 166447 (Mar. 13, 1996); Kennedy v. 
Knudsen Trucking, Inc., LIRC No. 980072723, 1994 WL 261276 (May 
31, 1994); Mouton v. City of Milwaukee, LIRC No. 83-18738, 1989 
WL 406726 (Apr. 13, 1989); Snyder v. Walgreen Company, LIRC No. 
84-14863, 1987 WL 245991 (Aug. 25, 1987); Thompson v. The Heil 
Company, LIRC Nos. 79-58577, 77-07742, 1983 WL 143475 (Oct. 26, 
1983). 
No. 94-0374 
 
7 
at the shoulder,” unambiguously excludes shoulder injuries from 
the PPD schedule.  The court reasoned that “at the shoulder” 
simply identifies the location at which the arm is lost, and 
that accepting LIRC’s interpretation of the statute would 
essentially require a court to rewrite § 102.52(1) as “[t]he 
loss of an arm and the shoulder,” rather than “[t]he loss of an 
arm at the shoulder.”  Id. at 60 (emphasis in original). 
¶13 While 
we 
conclude 
that 
the 
court 
of 
appeals’ 
interpretation of § 102.52(1) is a reasonable one, we also 
conclude that it is not the only reasonable interpretation of 
§ 102.52(1).  As we stated in Harnischfeger: 
 
The threshold question must be whether or not the 
statute in question is ambiguous.  If the statute is 
ambiguous, 
an 
agency’s 
interpretation 
cannot, 
by 
definition, be found to directly contravene it.  It is 
axiomatic in this state that a statutory provision is 
ambiguous if reasonable minds could differ as to its 
meaning. 
196 Wis. 2d at 662 (citations and footnote omitted).  Reasonable 
minds can differ as to whether a shoulder injury is encompassed 
in the phrase “the loss of an arm at the shoulder.”  Because 
§ 102.52(1) is ambiguous, we must determine whether LIRC's 
decision is based upon a reasonable interpretation of the 
statutory phrase.  
¶14 LIRC's interpretation of § 102.52(1) views a shoulder 
injury largely in terms of its effect on the extent of an arm’s 
usefulness.  See Wisconsin Worker's Compensation Division, 
Department of Workforce Development Publication WKC-7761-P (R. 
09/96), How to Evaluate Permanent Disability, 16-17, cited in 
Brief for LIRC at 15-16.  Such an interpretation makes sense in 
light of the graduated compensation achieved by § 102.52, which 
No. 94-0374 
 
8 
increases worker’s compensation benefits as the extent of the 
arm loss increases.  In such a scheme, an injury at the shoulder 
will generally cause greater loss of use of the arm than an 
injury at the elbow.  Like an elbow injury, a shoulder injury 
would be scheduled, as it is simply the point of origin from 
which the extent of the loss of the arm is measured.
6  We 
conclude that LIRC’s interpretation of § 102.52(1) is a 
reasonable one, and will therefore sustain that interpretation 
under 
the 
great 
weight 
deference 
standard 
“even 
if 
an 
alternative is equally reasonable.”  Harnischfeger, 196 Wis. 2d 
at 663.  
¶15 We reject Hagen’s assertion that a “loss of use” 
interpretation of § 102.52(1) is “ridiculous.”  Appellant’s 
Brief at 20.  Employing analogy, Hagen asserts that it is absurd 
to suggest that a neck injury which caused pain or paralysis in 
the arm would be a scheduled injury because it would cause a 
“loss of use” of the arm, or that a back injury which caused 
paralysis of a leg would be scheduled because of the resultant 
“loss of use” of the leg.  Id.  Hagen’s argument is flawed.  The 
schedule contains no provision for “loss of an arm at the neck” 
or “loss of a leg at the back.”  We will not decide whether the 
“loss of use” interpretation may be reasonably applied to 
statutory phrases which do not exist.  However, the statute does 
provide for “[t]he loss of an arm at the shoulder,” and we 
                     
6 This is not to say that an impairment extending beyond the 
arm-shoulder area is wholly within the schedule, for a claimant 
may have a permanent partial disability with both a scheduled and 
an unscheduled component.  See Vande Zande v. DILHR, 70 Wis. 2d 
1086, 236 N.W.2d 255 (1975).      
 
No. 94-0374 
 
9 
conclude that a "loss of use" interpretation of that phrase is 
reasonable. 
¶16 We determine that LIRC's interpretation of § 102.52(1) 
is not clearly contrary to the legislature's goal in enacting 
Chapter 102, which was to create "a system by which every 
employee not guilty of wilful misconduct may receive at once a 
reasonable recompense for injuries accidentally received in his 
[or her] employment under certain fixed rules, without a lawsuit 
and without friction."  County of La Crosse v. WERC, 182 Wis. 2d 
15, 31, 513 N.W.2d 579 (1994).  In addition, the legislative 
history is silent on the meaning of "[t]he loss of an arm at the 
shoulder," because legislative drafting records were not kept at 
the time that § 102.52(1) was created.  Thus, there is nothing 
to suggest that LIRC's interpretation of § 102.52(1) is "clearly 
contrary to legislative intent." 
¶17 LIRC’s 
interpretation 
of 
§ 102.52(1) 
to 
include 
shoulder injuries is entitled to great weight deference.  It is 
also reasonable.  We therefore conclude that the court of 
appeals erred by substituting its interpretation of § 102.52(1), 
however reasonable, for that adopted by LIRC.  
¶18 We turn next to a consideration of whether the 
evidence 
supports 
LIRC's 
factual 
determination 
that 
Hagen 
suffered only a scheduled permanent partial disability.  A 
worker's compensation claimant with only a scheduled permanent 
partial disability is limited to the remedy provided in the 
§ 102.52 schedule.  See Wis. Stat. § 102.44(4).  However, a 
permanent partial disability may have both scheduled and 
unscheduled components.  The § 102.52 schedule is not exclusive 
No. 94-0374 
 
10
when the effects of a scheduled impairment extend to and impair 
unscheduled parts of the body.  See Mednicoff v. DILHR, 54 Wis. 
2d 7, 15, 194 N.W.2d 670 (1972); Wagner v. Industrial Comm'n, 
273 Wis. 553, 566, 79 N.W.2d 264 (1956). 
¶19 Hagen asserts that in addition to her arm and shoulder 
injuries, she has suffered an unscheduled permanent partial 
disability to her back.  However, LIRC made the factual 
determination that the pain that Hagen experienced beyond the 
shoulder-arm area was non-permanent and did not render Hagen 
less employable.  We will uphold LIRC's findings of fact if they 
are supported by "credible and substantial evidence."  Wis. 
Stat. § 102.23(6); see also Princess House, Inc. v. DILHR, 111 
Wis. 2d 46, 54, 330 N.W.2d 169 (1983) (holding that "[e]vidence 
that is relevant, probative, and credible, and which . . . will 
permit a reasonable factfinder to base a conclusion upon it, is 
'substantial' evidence"). 
¶20 LIRC's determination is supported by Dr. Varia's 
report.  Upon reviewing Hagen's post-surgery medical records, 
Dr. Varia concluded that the extent of Hagen's permanent partial 
disability was seven percent at the shoulder joint.  We have 
already 
determined 
that 
Hagen's 
arm-shoulder 
injury 
is 
scheduled.  Thus, Dr. Varia's conclusion negates the existence 
of a permanent partial disability beyond the arm-shoulder area. 
        
¶21 Dr. Varia's report is the only evidence in the record 
which supports LIRC's determination that Hagen did not suffer a 
permanent partial disability beyond the arm-shoulder area.  The 
bulk of medical evidence in the record supports the opposite 
No. 94-0374 
 
11
proposition that Hagen's pain beyond the arm-shoulder region 
constitutes 
an 
unscheduled 
permanent 
partial 
disability.  
However, we have previously rejected the notion that the 
evidence which would support LIRC's factual determinations must 
outweigh 
in 
quantity 
the 
evidence 
supporting 
a 
contrary 
determination.  See Princess House, 111 Wis. 2d at 55.  We will 
not "substitute [our] judgment for that of the commission as to 
the weight or credibility of the evidence on any finding of 
fact."  § 102.23(6).  We conclude that, despite evidence 
supporting a contrary conclusion, LIRC's factual determination 
that Hagen suffered only a scheduled injury to her arm-shoulder 
area is a reasonable one based upon relevant, probative, and 
credible evidence. 
¶22 In summary, LIRC's interpretation of § 102.52(1) is 
entitled to great weight deference.  LIRC has reasonably 
interpreted "[t]he loss of an arm at the shoulder" to include an 
injury to the shoulder.  The court of appeals therefore erred in 
concluding that Hagen's shoulder injury was an unscheduled 
injury.  Finally, LIRC's determination that Hagen did not suffer 
a permanent partial disability beyond the arm-shoulder area is a 
finding of fact supported by credible and substantial evidence. 
 Accordingly, we reverse the decision of the court of appeals. 
By the Court.—The decision of the court of appeals is 
reversed.