Title: Fort James Operating Company, Inc. v. William J. Stephens

State: alabama

Issuer: Alabama Supreme Court

Document:

Before taking office as a judge on the Alabama Court of
1
Civil Appeals in January 2007, Judge Terry Moore served as
counsel for Fort James Operating Company, Inc., while this
action was pending in the trial court.  Therefore, on April
13, 2007, the Court of Civil Appeals transferred the case to
this Court pursuant to § 12-3-15, Ala. Code 1975.   
rel: 05/30/2008
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
 OCTOBER TERM, 2007-2008
_________________________
1061001
_________________________
Fort James Operating Company, Inc.
v.
William J. Stephens
Appeal from Choctaw Circuit Court
(CV-01-54)
On Application for Rehearing
BOLIN, Justice.1
1061001
2
This court's opinion of November 30, 2007, is withdrawn,
and the following is substituted therefor.
William J. Stephens sued his employer, Fort James
Operating Company, Inc. ("Fort James"), on March 15, 2001,
seeking to recover worker's compensation benefits for injuries
he allegedly suffered to his right knee and his neck during
the course of his employment with Fort James. Fort James
answered the complaint on April 24, 2001, admitting that
Stephens suffered an injury to his right knee during the
course of his employment but denying that the knee injury
caused Stephens to suffer a permanent injury, lost work time,
or lost wages or that it required surgery.  In its answer,
Fort James also denied that Stephens had suffered a neck
injury during the course of his employment.  Additionally,
Fort James asserted certain affirmative defenses, including a
setoff for the salary paid to Stephens during the benefit
period.
Following an ore tenus proceeding, the trial court, on
November 9, 2005, entered an order finding that Stephens had
suffered a 35% permanent partial disability to the whole body
as the result of the injuries to his knee and neck; awarded
1061001
3
Stephens worker's compensation benefits in the amount of
$60,312; awarded Stephens's attorney an attorney fee of
$9,046.80; and taxed costs to Fort James.
On December 7, 2005, Stephens moved the trial court to
amend its judgment to include a finding of the dates Stephens
reached maximum medical improvement ("MMI") for the injuries
to his  knee and neck. On December 8, 2005, Fort James moved
the trial court to amend its judgment, alleging that the order
contained factual errors and errors in legal reasoning. The
trial court granted Stephens's postjudgment motion by amending
its order and finding that Stephens had reached MMI for the
knee injury on December 8, 1999, and for the neck injury on
March 23, 2000. Fort James's postjudgment motion was denied by
operation of law on March 8, 2006; Fort James appeals.
Standard of Review
In a worker's compensation case, the appellate court
reviews the "standard of proof ... and other legal issues
without a presumption of correctness." § 25-5-81(e)(1), Ala.
Code 1975; see also Ex parte Professional Bus. Owners Ass'n
Workers' Comp. Fund, 867 So. 2d 1099, 1102 (Ala. 2003).  A
trial court's judgment in a worker's compensation case based
1061001
4
on pure findings of fact will not be reversed if it is
supported by substantial evidence. § 25-5-81(e)(2), Ala. Code
1975.  "[W]e will not reverse the trial court's finding of
fact if that finding is supported by substantial evidence –-
if that finding is supported by 'evidence of such weight and
quality that fair-minded persons in the exercise of impartial
judgment can reasonably infer the existence of the fact sought
to be proved.'"  Ex parte Trinity Indus., Inc., 680 So. 2d
262, 268-69 (Ala. 1996) (quoting West v. Founders Life
Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989)).
"Therefore, in such a case the appellate court must view the
facts in the light most favorable to the findings of the trial
court."  Ex parte Professional Bus. Owners Ass'n Workers'
Comp. Fund, 867 So. 2d at 1102. "Moreover, the Court of Civil
Appeals observed in Edwards v. Jesse Stutts, Inc., 655 So. 2d
1012, 1014 (Ala. Civ. App. 1995), that 'the [1992 Workers'
Compensation] Act did not alter the rule that this court does
not weigh the evidence before the trial court.'"  Ex parte
Phenix Rental Ctr., 873 So. 2d 226, 229 (Ala. 2003).
Facts
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5
At the time of the accident giving rise to this
complaint, Stephens was 59 years old and had been employed by
Fort James and its predecessors for approximately 40 years;
his average weekly earnings were $1,307.58. On November 6,
1997, while working in his position as a "crew trainer,"
Stephens slipped in a patch of oil and "hyperextended" his
right knee. Stephens completed his shift and did not report
the accident at that time. However, Stephens's right knee
became swollen and painful overnight, prompting him to report
the accident to his supervisor the following day. Stephens
received first-aid treatment from Fort James, but his knee
continued to be symptomatic, and he was referred by Fort James
to Dr. Terry French for evaluation.
Stephens was first seen by Dr. French on January 16,
1998, complaining of pain and a popping sensation in the knee
when he engaged in activities such as squatting, bending, and
climbing.  Dr. French examined Stephens's knee and concluded
that he had a possible torn medial meniscus ligament.
Although Dr. French placed Stephens's knee in a support,
prescribed 
anti-inflammatory 
medication, 
and 
restricted
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6
Stephens from climbing ladders, Stephens otherwise was
released by Dr. French  to full activity.
Dr. 
French 
continued 
to 
treat 
Stephens's 
knee
conservatively, including injections of anti-inflammatory
medication. Stephens was seen by Dr. French on February 2,
1998, complaining of tenderness in the knee with activities.
Dr. French noted at that time that Stephens had a full range
of motion in the knee with tenderness over the anserine bursa.
Dr. French concluded that Stephens did not have a torn medial
meniscus ligament but, rather, that he suffered from bursitis
in the knee. Stephens returned to Dr. French on February 12,
1998, and reported that although he had had complete relief
from the knee pain following the injections, the pain had
slowly begun to recur.  Dr. French noted that Stephens had a
full range of motion in his knee and that there was no
swelling and only localized tenderness over the anserine
bursa. Dr. French again injected the knee with anti-
inflammatory medication, continued Stephens on limited work
duty for 10 days, and told him that if he had any further
problems with the knee Dr. French would refer him to a
orthopedist.
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7
While Stephens was being treated by Dr. French he did not
miss any time from work, and he was able to perform all the
duties associated with his job. After Stephens was released by
Dr. French, he did not miss any time from work because of his
knee, and he performed his job without restrictions.
Stephens did not see Dr. French again until he returned
on January 22, 1999, with continued complaints of pain in his
right knee. Dr. French examined Stephens's knee and noted some
swelling and tenderness over the anterior medial aspect of the
knee. Dr. French referred Stephens to Dr. Gus A. Rush III, an
orthopedic surgeon. Stephens was first seen by Dr. Rush on
January 26, 1999. Dr. Rush examined Stephens's knee and
suspected that he had a torn medial meniscus ligament. He
recommended diagnostic arthroscopic surgery to confirm the
diagnosis and to repair the knee. On April 5, 1999, Dr. Rush
performed 
arthroscopic surgery on Stephens's knee 
and
confirmed a partial tear of the medial meniscus ligament as
well as a complete tear of the anterior cruciate ligament.
Dr. Rush repaired both tears.
Stephens returned to Dr. Rush on April 13, 1999. Dr. Rush
noted that at that time Stephens was doing well with a full
1061001
8
range of motion and more stability in the knee than he had had
before the surgery. Stephens had been provided crutches
following his knee surgery, and Dr. Rush noted that Stephens
should "wean [himself] from the crutches." Dr. Rush also
fitted Stephens for a knee brace and prescribed physical
therapy.
Stephens testified that on April 13, 1999, as he was
entering his house, the left crutch slipped off the steps,
causing him to jam his right shoulder in an upward motion.
Stephens stated that he experienced a burning and stinging
sensation in the right side of his neck. Approximately two
weeks later, Stephens's left crutch again slipped while he was
entering the first-aid station at Fort James, causing his
right shoulder again to be jammed in an upward motion. He
testified that he again experienced a burning sensation in the
right side of his neck.
Stephens had suffered from arthritis in his neck since
1987. Stephens stated that arthritis pain would radiate
through his right shoulder into his forearm and cause numbness
in his right hand. Stephens had previously been treated for
the arthritic condition in his neck, including being
1061001
9
prescribed medication, and he stated that the symptoms would
always resolve.  However, he testified that the symptoms in
his neck have intensified and persisted since the two
incidents involving the crutches.
Stephens returned to Dr. Rush on May 4, 1999. Dr. Rush
noted that Stephens's knee was doing well and that he had a
full range of motion in the knee. Dr. Rush continued
Stephens's physical therapy and recommended that he not wear
the knee brace inside his house. Dr. Rush also noted at that
time that Stephens reported a flare-up of the arthritis in
his neck with pain radiating into his shoulder and arm. Upon
examination, Dr. Rush noted irritation of the C-5 nerve root
on the right side and a limited range of motion in the
cervical spine. Dr. Rush recommended an injection of anti-
inflammatory 
medication 
and 
referred 
Stephens 
to 
a
neurosurgeon.
Stephens was seen on May 18, 1999, by Dr. John C. Neill,
a neurosurgeon, for his neck and right-shoulder complaints.
Stephens related to Dr. Neill that approximately one week
after his knee surgery he began experiencing pain in his right
shoulder that radiated into his right arm. Stephens told Dr.
1061001
10
Neill that he could tilt his head to the left and would then
have almost total relief from his symptoms. He also told Dr.
Neill that the pain was not constant. Following his
examination, Dr. Neill noted that Stephens had some weakness
in his right triceps muscle and diminished right triceps
reflex. Dr. Neill concluded that Stephens's pattern of pain
and weakness would suggest a C-7 nerve-root syndrome. Dr.
Neill noted that the condition could resolve spontaneously and
that the best course of action was observation. He told
Stephens to return in three weeks for a follow-up visit.
Stephens returned to light-duty work at Fort James on May
25, 1999, with the following restrictions: no squatting,
kneeling, climbing, lifting over 25 pounds, or long-distance
walking. Although Stephens was on restricted duty he returned
to his regular job and he was earning his regular wage.
Stephens continued to receive physical therapy for his knee as
prescribed by Dr. Rush but did not receive any physical
therapy for his neck. Earlier in his physical therapy Stephens
had reported to his therapist that the therapy for his knee
was aggravating his neck and arm pain. On June 3, 1999,
1061001
Dr. Neill's office is located in Jackson, Mississippi.
2
11
Stephens's physical therapist noted that his neck and arm
complaints were better.  
Stephens did not return to Dr. Neill as scheduled three
weeks after his first visit; rather, Lynn Love, Stephens's
case manager, telephoned Dr. Neill's office on June 7, 1999,
and stated that Stephens's neck symptoms had resolved and that
he would not be returning for a follow-up visit. Dr. Neill
testified that, based on the information his office had
received from Love, the date of MMI for Stephens's neck was
June 7, 1999, and Stephens had no permanent impairment from
the injury. Stephens denied that his neck and arm symptoms had
resolved; he testified that he canceled the appointment with
Dr. Neill because he did not like Dr. Neill's attitude and
because it was an excessively long drive to Dr. Neill's
office.2
Stephens returned to Dr. Rush on July 16, 1999, for a
follow-up visit for his knee. Dr. Rush noted that overall
Stephens was doing well with the knee. Dr. Rush continued
Stephens on light-duty work for four to six weeks. Stephens
was released from physical therapy for his knee on August 19,
1061001
12
1999, with the therapist noting at that time that Stephens had
a full range of motion and normal strength levels in the knee.
Stephens returned to Dr. Rush for a final visit on September
14, 1999. Dr. Rush noted at that time that the anterior
cruciate ligament was stable and that overall Stephens was
doing well with his knee. Dr. Rush further noted that Stephens
should refrain from using the knee brace except for strenuous
activities and returned him to regular-duty work limited only
to 12-hour shifts for 2 months. Dr. Rush assigned Stephens a
permanent-impairment rating of 5% to 8% for the knee and
stated that he would reach MMI on October 14, 1999.
After Stephens was released by Dr. Rush, he wanted a
second opinion as to his knee, so Fort James provided him with
a panel of four physicians; he chose Dr. Steven R. Nichols, an
orthopedic surgeon. Stephens was first seen by Dr. Nichols on
November 4, 1999. Dr. Nichols noted that Stephens's knee was
tender, swollen, and unstable. His impression was that
Stephens suffered from post-anterior cruciate-reconstruction
instability 
and 
post-traumatic 
arthritis. 
Dr. 
Nichols
prescribed anti-inflammatory medication, ordered strength and
stability tests for the knee, and continued Stephens on light-
1061001
13
duty work. The stability test indicated that Stephens had
"good" stability in the knee and the strength test placed
Stephens in the 74th percentile as his knee strength related
to the rest of the population.
Stephens had questioned Dr. Nichols about his ability to
return to full-duty work at Fort James, so Dr. Nichols ordered
a functional-capacities evaluation, which was performed on
November 30, 1999. Stephens returned to Dr. Nichols on
December 8, 1999, for the results of the functional-capacities
evaluation. Based on the results of the functional-capacities
evaluation, Dr. Nichols released Stephens to return to full-
duty work with restrictions of no lifting anything over 60
pounds and no prolonged squatting or crawling. Dr. Nichols
determined that Stephens had reached MMI with his knee at that
time.  He assigned Stephens a permanent-impairment rating of
5% to the knee.
In January 2000, Fort James phased out Stephens's
position as a "crew trainer" and transferred him to the
"machine tender" position. He was able to perform the full
duties 
of 
the 
"machine 
tender" 
position 
within 
the
restrictions assigned by Dr. Nichols. Stephens earned a
1061001
Even though Stephens had been seen by several health-care
3
professionals on numerous occasions between June 1999 and
March 2000, there were no documented complaints of neck and
arm pain.  However, Stephens testified that he had continuous
neck and right-arm pain since the incidents involving the
crutches in April 1999 and that he did not mention his neck
complaints on those occasions because he was not being treated
by those individuals for his neck symptoms. Dr. Nichols
testified that Stephens may have mentioned his neck complaints
to him before March 8, 2000, but that, if he did, Dr. Nichols
stated that he discouraged Stephens from talking about it,
choosing to focus only on the knee symptoms. 
14
slightly higher weekly wage as a "machine tender" than he did
as a "crew trainer."
On March 8, 2000, Stephens returned to Dr. Nichols with
continued complaints of pain in his neck that radiated into
his right shoulder and arm.  Stephens related to Dr. Nichols
3
on this visit the two incidents involving the crutches and
told him that his symptoms had persisted since that time.  On
examination, Dr. Nichols was able to reproduce pain with
hyperflexion of the neck that was relieved by rotating the
head to the left. X-rays were taken; the X-rays revealed
arthritis at the C-5, C-6, and C-7 vertebrae levels. Dr.
Nichols prescribed anti-inflammatory medication and ordered a
cervical myelogram and CT scan.
Stephens returned to Dr. Nichols on March 23, 2000. Dr.
Nichols noted at that time:
1061001
15
"[Stephens] had a cervical myelogram and CT scan
this 
morning 
which 
reveals 
a 
considerable
spondylosis with a foraminal stenosis bilaterally at
[the C-4-5, C-5-6, and C-6-7 vertebrae levels] with
compression of the fifth, sixth and seventh nerve
roots.  He tells me that the Celebrex [brand non-
steroidal 
anti-inflammatory drug] seems to be
helping a good deal, eliminating some of the
cramping and shocking sensation.  He still has some
residual soreness at the base of the neck.  I would
suggest that we continue with the Celebrex for now.
In addition, we have given him a few Ultram [brand
pain reliever] for more severe pain .... [F]or all
practical purposes, he is at MMI with regards to his
cervical spine.  We will plan to follow up as
necessary."  
Stephens was next seen by Dr. Nichols on September 14,
2000, with continued complaints of pain in his neck and right
arm. Dr. Nichols continued Stephens on the anti-inflammatory
medications and referred him for a new functional-capacities
evaluation and impairment rating. Following the functional-
capacities evaluation, Stephens was assigned a permanent-
partial-impairment rating of 15% for the neck. Dr. Nichols
testified that Stephens's neck condition would quite possibly
continue to deteriorate to the point that he would eventually
require surgery.
Stephens continued to work at Fort James, receiving his
regular wage, until he retired on November 29, 2000. Stephens
was able to perform the duties of his job as a "machine
1061001
16
tender" under the restrictions prescribed by Dr. Nichols.
However, he testified that he eventually lost the grip
strength in his right hand and that he could no longer make
the manual adjustments to the machine as required and could no
longer climb or balance himself on the machine because of his
knee injury.
Discussion
Fort James argues that the trial court erred in finding
that March 23, 2000, was the date Stephens reached MMI for his
neck 
injury. 
Specifically, 
Fort 
James 
contends 
that
Stephens's neck injury had stabilized by June 7, 1999, and
that all medical treatment involving the neck from that point
forward was merely diagnostic in nature. Thus, Fort James
contends that the actual date of MMI for Stephens's neck
injury was June 7, 1999. 
The Court of Civil Appeals has stated:
"It is well settled that in order for an employee to
recover 
permanent 
partial 
or 
permanent 
total
disability benefits the employee must have reached
MMI.  Ex parte Phenix Rental Ctr., 873 So. 2d 226
(Ala. 2003); Hillery v. MacMillan Bloedel, Inc., 717
So. 2d 824 (Ala. Civ. App. 1998); Edward Wiggins
Logging Co. v. Wiggins, 603 So. 2d 1094 (Ala. Civ.
App. 1992); Pemco Aeroplex, Inc. v. Johnson, 634 So.
2d 
1018 
(Ala. 
Civ. 
App. 
1994); 
and 
Alabama
By-Products Corp. v. Lolley, 506 So. 2d 343 (Ala.
1061001
17
Civ. App. 1987).  A claimant has reached MMI when
'there is no further medical care or treatment that
could be reasonably anticipated to lessen the
claimant's disability.' G.UB.MK. Constructors v.
Traffanstedt, 726 So. 2d 704, 709 (Ala. Civ. App.
1998).  When MMI is reached depends on the
circumstances of the particular case.  Hillery v.
MacMillan Bloedel, Inc., supra; Pemco Aeroplex, Inc.
v. Johnson, supra."
Halsey v. Dillard's, Inc., 897 So. 2d 1142, 1148 (Ala. Civ.
App. 2004).  "While the treating physicians generally provide
the best evidence concerning maximum medical improvement, the
trial court is not bound by their opinions in assigning the
date of maximum medical improvement." 1 Terry A. Moore,
Alabama's Workers' Compensation § 13:6 (1998) (footnote
omitted). See also Guardian Cos. v. Kennedy, 603 So. 2d 1053
(Ala. Civ. App. 1992).
The evidence indicates that Dr. Neill determined that
Stephens had reached MMI on June 7, 1999, based on
information received by the case manager informing him that
Stephens's neck symptoms had resolved and that Stephens was
canceling his follow-up appointment. However, Stephens denied
that his symptoms had resolved and stated that he had
canceled the appointment because he did not like Dr. Neill
and because his office, located in Jackson, Mississippi, was
1061001
18
too far away for Stephens to drive. Rather, Stephens
testified that his neck symptoms persisted. When Dr. Nichols
examined  Stephens on March 8, 2000, he was able to reproduce
pain with hyperflexion of the neck. X-rays indicated that
Stephens had arthritis at the C-5, C-6, and C-7 vertebrae
levels. 
A 
cervical 
myelogram 
and 
CT 
scan 
revealed
considerable arthritis with foraminal stenosis and nerve-root
compression  at the C-4-5, C-5-6, and C-6-7 vertebrae levels.
Dr. Nichols had prescribed anti-inflammatory and pain
medication for Stephens. Dr. Nichols, an authorized treating
physician, determined that Stephens had reached MMI on March
23, 2000.  More importantly Dr. Nichols testified that
Stephens's condition would quite possibly continue to
deteriorate to the point that he would require surgery.  See
Sunshine Jr. Stores, Inc. v. Dower, 625 So. 2d 445 (Ala. Civ.
App. 1993)(holding that the trial court could find MMI even
though employee had not been offered surgery that might
lessen her disability).
As stated above, it is not this Court's role to reweigh
the evidence on appeal.  After reviewing the record in this
case, we conclude that substantial evidence exists from which
1061001
The period between December 8, 1999, and November 29,
4
2000, is closer to 50 weeks; however, this period included two
weeks in which Stephens was on unpaid vacation and received no
wages from Fort James.  
19
the trial court could have concluded that Stephens did not
reach MMI until March 23, 2000.    
Fort James next argues that the trial court erred in
failing to offset, pursuant to § 25-5-57(c)(3), Ala. Code
1975, the worker's compensation benefits it owes Stephens by
the 48 weeks of regular wages it paid Stephens during the
period of December 8, 1999, the date of MMI of the knee
injury, through November 29, 2000, the date stipulated to as
Stephens's 
retirement date.  
 
Section 
25-5-57(c)(3), 
Ala. 
Code
4
1975, provides that if an employee receives a salary "during
the benefit period ... the employer shall be allowed a setoff
in weeks against the compensation owed under this article."
In order for an employee to receive permanent-partial or
permanent-total-disability benefits, the employee must have
reached MMI.  Ex parte Phenix Rental Ctr., supra.
The trial court awarded Stephens permanent-partial-
disability benefits at a rate of $220 per week for 300 weeks.
The trial court did not compensate Stephens's knee injury and
neck injury separately; rather, it found that Stephens had
1061001
See note 7, infra.
5
20
suffered a 35% permanent partial disability based on a
combination of the injuries. Fort James again contends that
Stephens reached MMI for his neck injury on June 7, 1999, and
that he reached MMI for his knee injury on December 8, 1999.
Therefore, Fort James argues that the latest Stephens reached
MMI for the combined injuries was December 8, 1999, and that
by statute it is entitled to a credit for the 48 weeks of
wages it paid Stephens from December 8, 1999, through
November 29, 2000.
As stated above, substantial evidence exists to support
the trial court's finding that Stephens did not reach MMI as
to his neck injury until March 23, 2000.  Therefore, under
Fort James's reasoning, March 23, 2000, is the date Stephens
reached MMI for the combined injuries.  The record indicates
that Stephens was paid his regular wage from March 23, 2000,
until he retired on November 29, 2000.  Accordingly, we
conclude that Fort James is entitled to offset the benefits
it owes Stephens by the number of weeks Fort James paid
Stephens's wages during the period of March 23, 2000, through
November 29, 2000.5
1061001
21
Relying on § 25-5-89, Ala. Code 1975, Fort James next
argues that the trial court erred in awarding Stephens costs.
Section 25-5-89, Ala. Code 1975, provides:
"Costs may be awarded by said court in its
discretion, and, when so awarded, the same costs
shall be allowed, taxed and collected as for like
services and proceedings in civil cases, but if it
shall appear that the employer, prior to the
commencement of the action, made to the person or
persons 
entitled 
thereto 
a 
written 
offer 
of
compensation in specific terms, which terms were in
accordance with the provisions of this article and
Article 2 of this chapter, then no costs shall be
awarded or taxed against such employer."
Fort James offered to pay Stephens benefits at a rate of
$183.05 for 287 weeks, which offer was contained in an
"Agreement and Petition for Approval of Settlement" signed by
Stephens on March 12, 2001.  Stephens filed his worker's
compensation complaint on March 15, 2001. Fort James contends
that had Stephens accepted its offer he would have received
$52,535.35 in benefits and that that amount exceeds the
$49,752 in benefits that Fort James says Stephens is actually
entitled to receive in this case. Therefore, Fort James
argues that the trial court erred in taxing costs of
$6,915.11 against it.
1061001
This sum is based on the clear terms of the settlement
6
agreement.  The settlement agreement did not address the
$5,688 credit Fort James is entitled to receive for temporary-
total-disability benefits paid to Stephens. If the credit is
applied to the amount arrived at by the settlement agreement,
the settlement would actually equal $46,847.35.
22
The $52,535.35 in benefits Fort James says Stephens would
have received under the settlement agreement is based on
benefits of $183.05 per week for 287 weeks ($183.05 x 287 =
$52,535.35).   The sum of $49,752 in benefits Fort James
6
claims Stephens is actually entitled to receive is based on
a MMI date of December 8, 1999, which equates to a 48-week
credit against the maximum benefit period of 300 weeks.
Thus, Fort James reaches the sum of $49,752 based on a weekly
benefit of $220 for 252 weeks (300 weeks less the 48-week
credit) with a credit of $5,688 to Fort James for temporary-
total-disability benefits paid to Stephens ($220 x 252 -
$5,688 = $49,752).  
As discussed above, however, the evidence supports the
trial court's finding that Stephens reached MMI on March 23,
2000.  The record indicates that Fort James paid Stephens a
regular wage for 35 weeks during the period of March 23,
1061001
The record indicates that Stephens received a week of
7
paid vacation from Fort James the work week ending Friday,
August 4, 2000.  This week was not counted toward the wage
credit given to Fort James, thus resulting in a 35-week-wage
credit being given to Fort James rather than a 36-week-wage
credit.  In Fort James Operating Co. v. Irby, 895 So. 2d 282
(Ala. Civ. App. 2004),  Fort James expressly argued that it
was entitled to a credit pursuant to § 25-5-57(c)(1) and (3)
for sickness and accident benefits and vacation and holiday
paid to the employee.  In denying Fort James the setoffs, the
Court of Civil Appeals stated:
"The effect of the trial court's refusal to
allow Fort James a credit for its payment of
vacation or holiday pay and sick pay to Irby is that
Irby received that compensation in addition to
receiving workers' compensation benefits for the
same time periods.  Our supreme court has stated
that the Alabama Legislature's intent in enacting
its 1992 amendments to the Alabama Workers'
Compensation Act was, in part, to prevent a workers'
compensation claimant from receiving a 'double
recovery' such as occurs when the claimant is paid
both workers' compensation benefits and other
benefits 'that a worker might receive as a result of
an injury.'  See Ex parte Taylor, 728 So. 2d [635]
at 637 [(Ala. 1998)] (stating that a worker could
not receive both workers' compensation benefits and
payments from a disability plan or a sick-pay plan
paid as a result of an injury for the same time
period).
"However, as to the issues whether an employer
is entitled to a credit for vacation or holiday pay
and sick or accident pay, our supreme court has
quoted with approval a Pennsylvania case that denied
a setoff for those types of pay.  See Ex parte
Dunlop Tire Corp., [709 So. 2d 729 (Ala. 1997)],
citing Toborkey v. Workmen's Comp. Appeal Bd. (H.J.
Heinz), 655 A. 2d 636 (Pa. Commw. Ct. 1995).  In
explaining the rationale for its denial of that
setoff, the Pennsylvania court stated:
23
2000, through November 29, 2000.  Therefore, the disability
7
1061001
"'The Supreme Court noted in Temple
[v. Pennsylvania Dep't of Highways, 445 
Pa.
539, 285 A. 2d 137 (1971),] that sick
leave, like vacation pay, was "an incident
or 
benefit 
provided 
under 
the 
work
agreement and is an entitlement like wages
for services performed." [445 Pa.] at 542,
285 A. 2d at 139, as opposed to payments in
lieu of compensation, which are made in
relief of the claimant's inability to
labor.  Therefore, the court 
concluded, the
employer was not entitled to credit.'
"Toborkey, 655 A. 2d at 638 (quoted in Ex parte
Dunlop Tire Corp., 706 So. 2d at 734).  As our
supreme court noted, the court in Toborkey, supra,
denied the employer a setoff because '"the benefits
in question were wages for services performed,
rather than payments in relief of [the] Claimant's
inability to labor."' Id. (quoting Toborkey, 655 A.
2d at 641).
"In this case, the evidence indicates that the
vacation or holiday pay, and the sick pay, are
benefits to which Irby would have been entitled even
had he not become disabled; they did not constitute
benefits to which Irby became entitled because of
his disability.  Therefore, given our supreme
court's 
reliance 
on 
Toborkey, 
supra, 
as 
a
'well-reasoned resolution of some of the questions
involved 
in 
such 
a 
setoff 
against 
workers'
compensation benefits,' we conclude that, under that
authority, Fort James was not entitled to a setoff
for the benefits it paid Irby for sick pay or for
vacation or holiday pay.  See Ex parte Dunlop Tire
Corp., 706 So. 2d at 734."
895 So. 2d 282, 292-93 (Ala. Civ. App. 2004).  This Court
granted the petition for the writ of certiorari in Irby to
determine whether § 25-5-57(c)(1), Ala. Code 1975, allowed
Fort James to set off sickness and accident benefits paid to
Irby.  This Court distinguished "sick pay" from "sick leave,"
stating that "sick leave" was an "'entitlement like wages for
24
1061001
services performed,'" whereas "sick pay" was "'not in the
nature of wages but, rather, [as] payment[] provided in lieu
of compensation, based on the claimant's inability to work.'"
Ex parte Fort James Operating Co. 895 So. 2d 294, 297 (Ala.
2004).  Fort James argued that its provision of sickness-and-
accident 
benefits 
constituted 
"sick 
pay" 
and 
not 
"sick 
leave."
Irby did not challenge Fort James's characterization of the
benefits; rather, it argued that Fort James did not produce
any evidence indicating that it had paid for the sickness-and-
accident benefits.  Section 25-5-57(c)(1) provides that an
"employer may reduce ... the amount of benefits paid pursuant
to a disability plan, retirement plan, or other plan providing
for sick pay by the amount of compensation paid, if and only
if the employer provided the benefits or paid for the plan
...." This Court reversed the denial of the setoff, concluding
that Fort James was entitled to the setoff because the
sickness-and-accident benefits were funded by Fort James.  Ex
parte Fort James, supra.  Although this Court reversed the
Court of Civil Appeals' decision in regard to the sickness-
and-accident benefits, the issue of setoff for the vacation
and holiday pay was not addressed by this Court in Ex parte
Fort James.  Accordingly, the current state of the law does
not entitle Fort James a setoff for vacation and holiday pay,
thus the use of the 35-week wage credit as opposed to a 36-
week wage credit.
25
benefits owed Stephens are figured on a wage credit of 35
weeks to Fort James rather than 48 weeks. A weekly benefit of
$220 for 265 weeks (300 weeks less the 35-week credit) with
a credit of $5,688 to Fort James for temporary-total-
disability benefits paid to Stephens results in $52,612 in
benefits that Stephens is actually entitled to in accordance
with the provisions of the Workers' Compensation Act ($220 x
265 - $5,688 = $52,612). Although the total amount of
compensation contained in Fort James's written offer differed
1061001
26
only slightly from the benefits Stephens is actually entitled
to receive under the Workers' Compensation Act, the amounts
nevertheless differed and thus cannot be said to be "in
accordance with the provisions" of the Act. § 25-5-89, Ala.
Code 1975.  Therefore, we cannot say that the trial court
exceeded its discretion in awarding costs to Stephens. 
Stephens argues in his application for a rehearing that
this Court misapprehended the setoff provision found in § 25-
5-57(c)(3), Ala. Code 1975, which provides:
"(3) If an employer continues the salary of an
injured employee during the benefit period or pays
similar compensation during the benefit period, the
employer shall be allowed a setoff in weeks against
the compensation owed under this article.  For the
purposes 
of 
this 
section, 
voluntary 
contributions 
to
a Section 125-cafeteria plan for a disability or
sick pay program shall not be considered as being
provided by the employer."
Stephens contends that the "salary" discussed in § 25-5-
57(c)(3) refers to a "sympathy" salary paid to an injured
employee who is not working and, therefore, not earning his
salary but is being paid because the employer anticipates
workers' compensation liability and does the right thing by
continuing to pay the employee.  Stephens cites the
following:
"'If a man is giving a dollar's worth of labor for
every dollar he is paid, the intention of the
employer cannot be said to be that of supplying a
1061001
We note that the passage Stephens cites can now be found,
8
somewhat edited, in 4 Arthur Larson & Lex K. Larson, Workers'
Compensation Law § 82.02[3] (2007).
27
substitute for workmen's compensation; it is simply
to purchase these services from this man on the same
terms as from any other man.  Therefore, credit is
usually disallowed when it can be shown that the
claimant earned the wages he was paid during the
period in question.'"
Stephens's rehearing brief at 5 (quoting 2 Arthur Larson,
Workmen's Compensation Law § 57.42).   Stephens states that
8
he returned to work and earned his salary and that he was not
paid a "sympathy" salary.  Thus, he argues that Fort James
was not entitled to a setoff pursuant to § 25-5-57(c)(3). 
Fort James first raised the issue of setoff in its
postjudgment motion.  Stephens offered nothing in response to
the issue.  Subsequently, Fort James renewed its postjudgment
motion and requested that the matter be set for a hearing.
Again, Stephens offered nothing in response to the setoff
issue. It appears from the record that Fort James's
postjudgment motion was set for a hearing on March 16, 2006,
but was denied by operation of law on March 8, 2006.  Fort
James raised the issue of setoff in its appellate brief and
fully argued the matter before this Court.  Stephens failed
to address or to refute Fort James's argument as to setoff,
except to say that the issue "should already have been
1061001
28
resolved" by the resolution of the issue regarding the date
Stephens reached MMI.  
Stephens has raised for the first 
time on 
application for
rehearing his argument that this Court misapprehended the
setoff provision in § 25-5-57(c)(3), Ala. Code 1975, by
granting Fort James a setoff for wages Stephens earned
through actual labor, not by way of a "sympathy" salary paid
by Fort James because of Stephens's injury and inability to
work.  "'The well-settled rule of this Court precludes
consideration of arguments made for the first time on
rehearing.'"  Riscorp, Inc. v. Norman, 915 So. 2d 1142, 1155
(Ala. 2005)(opinion on application for rehearing) (quoting
Water Works & Sewer Bd. of Selma v. Randolph, 833 So. 2d 604,
608 (Ala. 2002)).  Accordingly, because Stephens attempts to
raise this particular argument for the first time in his
application for rehearing, we cannot consider it.  Because
this is an important issue in the area of workers'
compensation law that does not appear to have been
definitively addressed by this Court, we will await a
proceeding in which this issue is both squarely before this
Court for adjudication and adequately briefed. 
1061001
29
Conclusion
We affirm the trial court's judgment to the extent it
found March 23, 2000, to be the date of MMI and taxed costs
against Fort James.  We reverse the judgment to the extent it
failed to allow Fort James a wage credit for regular wages
paid to Stephens for the period of March 23, 2000, through
November 29, 2000.
APPLICATION OVERRULED; OPINION OF NOVEMBER 30, 2007,
WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED IN PART; REVERSED IN
PART; AND REMANDED WITH DIRECTIONS.
Cobb, C.J., and Lyons, Woodall, Stuart, and Smith, JJ.,
concur.
Parker, J., concurs in part and dissents in part.
See and Murdock, JJ., concur to overrule the application
for rehearing and otherwise dissent. 
1061001
30
PARKER, Justice (concurring in part and dissenting in part).
I concur in the main opinion except as to that part
affirming the trial court's taxation of costs against Fort
James Operating Company, Inc., the employer.  I respectfully
dissent from that part.  I view the offer made by Fort James
as 
containing 
terms 
in 
accordance 
with 
the 
Workers'
Compensation Act, in which case "no costs shall be awarded or
taxed against [the] employer." § 25-5-89, Ala. Code 1975. 
1061001
31
MURDOCK, Justice (concurring to overrule the application for
rehearing and otherwise dissenting).
I concur in overruling William J. Stephens's application
for rehearing.  As to the majority opinion, however, I dissent
for the reasons hereinafter stated.
The testimony by William J. Stephens and the medical
evidence indicates that there was no change in Stephens's neck
condition from June 7, 1999, to March 23, 2000.  The fact that
Stephens's condition "persisted" at the same level at which it
existed on the earlier date is inconsistent with the notion
that it was improving to the point of finally reaching
"maximum medical improvement" ("MMI") on the latter date.  
Dr. Nichols's notes do not state that Stephens reached
MMI on March 23, 2000.  Dr. Nichols, who did not treat
Stephens for his neck problem between June 1999 and
March 2000, simply explained in his March 23, 2000, notes that
he had prescribed an anti-inflammatory drug for Stephens two
weeks earlier on March 8 and that "[Stephens] is at MMI with
regard to his cervical spine." (Emphasis added.)  In the
context of the other undisputed evidence of Stephens's neck
problem simply "persisting" without change from June 7, 1999,
to March 23, 2000, I cannot consider Dr. Nichols's bare
statement that Stephens was at MMI when Dr. Nichols saw him in
1061001
32
March as substantial evidence that Stephens did not reach MMI
until March.
I recognize that the anti-inflammatory medication
prescribed for Stephens by Dr. Nichols during his March 8
visit did provide Stephens with some relief.  As Professor
Larson explains, however, the proper focus is on the
underlying condition, which did not change for this employee
between June 7, 1999, and March 23, 2000:
"The issue [of when MMI has been reached] may be
purely a medical one.  Thus, there may be medical
evidence that the period of recuperation is not yet
over, that further healing and strengthening may be
anticipated, and that it is still too early to
appraise 
claimant's 
permanent 
disability.
Conversely, there may be medical testimony that the
claimant has recovered as much as he or she ever
will, 
and 
that 
any 
lingering 
disability 
is
permanent.  The fact that some treatment is still
necessary, such as physical therapy or drugs, does
not necessarily rule out a finding that the
condition has become stabilized, if the underlying
condition causing the disability has become stable
and if nothing further in the way of treatment will
improve that condition."
4 Arthur Larson & Lex K. Larson, Larson's Workers'
Compensation 
Law 
§ 80.03[3] 
(2007) 
(footnotes 
omitted). 
 
Judge
Moore, in his treatise on Alabama workers' compensation law,
states: "[T]he mere fact that the employee may receive some
palliative benefit from further medical attention that is not
designed to reduce the physical disability does not prevent a
1061001
33
court from finding that the employee has reached maximum
medical improvement."  1 Terry A. Moore, Alabama Workers'
Compensation § 13:6 (1998) (footnote omitted).  See also
G.UB.MK. Constructors v. Traffanstedt, 726 So. 2d 704, 709
(Ala. Civ. App. 1998) (the date of MMI is "the date on which
the claimant has reached such a plateau that there is no
further medical care or treatment that could be reasonably
anticipated to lessen the claimant's disability").
Based on the foregoing, I respectfully dissent.  I would
reverse the trial court's judgment to the extent that it found
March 23, 2000, to be the date of MMI for Stephens's neck
injury.  I would remand the cause for the trial court to enter
a judgment setting MMI at June 7, 1999, and applying an
appropriate wage credit to the permanent-partial-disability
benefits due Stephens in relation to the wages paid Stephens
by Fort James from and after that date. 
See, J., concurs.