Title: Bailey v. City of Lewiston

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
2017 ME 160 
 
Docket: 
WCB-16-204 
Argued: 
April 11, 2017 
Decided: 
July 20, 2017 
 
Panel: 
SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ. 
 
 
MICHAEL F. BAILEY 
 
v. 
 
CITY OF LEWISTON et al. 
 
 
JABAR, J. 
[¶1]  The City of Lewiston and its insurer, Cannon Cochran Management 
Services (referred to collectively as the City), appeal from a decree of the 
Workers’ Compensation Board Appellate Division vacating the hearing 
officer’s (Goodnough, HO)1 grant of the City’s petition to determine the extent 
of Michael F. Bailey’s permanent impairment.  See 39-A M.R.S. § 322 (2016).  
We affirm the Appellate Division’s decision.   
I.  BACKGROUND 
[¶2]  The following facts, which are derived from a 2014 Workers’ 
Compensation Board decree granting the City’s petition to determine the 
                                         
1  Pursuant to P.L. 2015, ch. 297 (effective Oct. 15, 2015), Workers’ Compensation Board hearing 
officers licensed to practice law are now designated as administrative law judges (ALJ).  All of the 
decisions made by now-ALJ Goodnough however, were made before this change.    
 
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extent of Bailey’s permanent impairment, are supported by the record.  See 
39-A M.R.S. §§ 318, 322(3) (2016).  Bailey, who at the time of the 2014 decree 
was sixty-five-years old, began working as a City of Lewiston firefighter in 
1975.  On October 21, 2001, he suffered a respiratory work injury and was 
subsequently diagnosed with reactive airways deficiency syndrome (RADS).  
By way of a Workers’ Compensation Board decree, Bailey began to receive 
partial incapacity benefits stemming from that injury in 2004.  In 2007, the 
City sought review of Bailey’s award of benefits and Bailey sought a 
determination of the extent of his permanent impairment.  The hearing officer 
(Goodnough, HO) denied the City’s petition, but found that Bailey had reached 
maximum medical improvement (MMI) and that he had sustained an injury 
that resulted in a permanent impairment level of 32%.  This determination 
was based on the results of an independent medical exam performed pursuant 
to 39-A M.R.S. § 312 (2007).2    
[¶3]  Because the 2007 decree established that Bailey’s permanent 
impairment level exceeded 15%, he was eligible to receive ongoing 
                                         
2  Title 39-A M.R.S. § 312 (2007) has since been amended.  P.L. 2015, ch. 297 § 11 (effective 
Oct. 15, 2015) (codified at 39-A M.R.S. § 312 (2016)).   
 
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compensation without a temporal “cap.”  See 39-A M.R.S. § 213(1) (2007).3  
The City did not appeal from the 2007 decree.   
 
[¶4]  In 2013, the City filed a petition seeking review of the level of 
Bailey’s incapacity4 and a second petition seeking to determine the extent of 
his permanent impairment.  In support of these petitions, the City introduced 
the results of an updated medical examination that indicated that Bailey’s 
level of permanent impairment had decreased to 0%.   
 
[¶5]  The hearing officer rejected Bailey’s claims that the doctrine of res 
judicata precluded the City’s petition to determine the extent of his permanent 
impairment, concluded that the new medical report constituted a change of 
circumstances warranting a new permanent impairment finding, and reduced 
Bailey’s permanent impairment level to 0%.  The decree terminated Bailey’s 
entitlement to further compensation because his 0% permanent impairment 
rating ended his eligibility to receive benefits without a temporal restriction 
and because he had already received benefits for longer than the limit 
established for an injury resulting in 0% permanent impairment.  See 
39-A M.R.S. § 213(1)(A).   
                                         
3  Title 39-A M.R.S. § 213(1) (2007) has since been amended.  P.L. 2015, ch. 297 § 8 (effective 
Oct. 15, 2015) (codified at 39-A M.R.S. § 213(1) (2016)). 
4  The Hearing Officer determined that the City had failed to show any change in the level of 
Bailey’s incapacity, and the City did not challenge that issue on appeal to the Appellate Division.   
 
4 
 
[¶6]  Bailey subsequently appealed to the Appellate Division.  See 
39-A M.R.S. § 321-B (2014).5  In a unanimous decision, the Appellate Division 
vacated the hearing officer’s decree, concluding that the 2007 determination 
of permanent impairment as of the date of MMI was final, and therefore res 
judicata principles barred relitigation of that issue.  The Appellate Division 
further concluded that there existed no significant change of circumstances to 
warrant the hearing officer revisiting the issue of Bailey’s MMI.   
 
[¶7]  The City successfully petitioned for appellate review of the 
Appellate Division’s decision.  See 39-A M.R.S. § 322 (2016).    
II.  DISCUSSION 
 
[¶8]  The central issue on appeal is whether the doctrine of res judicata 
prevents a party from seeking to change the permanent impairment level 
associated with an employee’s work-related injury after that level has been 
established by a prior decree.  The City argues that res judicata principles 
should not prevent it from seeking to reduce Bailey’s permanent impairment 
level and contends that the Appellate Division erred in applying the doctrine 
of res judicata to the facts of this case.  Bailey, on the other hand, contends 
that the Appellate Division’s decision was supported by the plain language of 
                                         
5  Title 39-A M.R.S. § 321-B (2014) has since been amended.  P.L. 2015, ch. 297 § 16 (effective 
Oct. 15, 2015) (codified at 39-A M.R.S. § 321-B (2016)). 
 
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the statute, relevant case law, and policy concerns, and was therefore not 
erroneous.  We conclude that the doctrine of res judicata bars relitigation of 
the permanent impairment level established for an employee’s work-related 
injury and therefore affirm the Appellate Division’s decision.  
A. 
Standard of Review 
 
[¶9]  Previously, when a hearing officer or ALJ’s decision was reviewed 
by the Appellate Division and subsequently appealed, we would review “the 
[hearing officer’s or ALJ’s] decision directly.”  Freeman v. NewPage Corp., 
2016 ME 45, ¶ 5, 135 A.3d 340.  However, the Legislature has recently 
amended the workers’ compensation statute to provide that “only a decision 
of the [appellate] division may be reviewed on appeal.”  39-A M.R.S. § 322(1); 
see P.L. 2015, ch. 469, § 2 (effective July 29, 2016).  Therefore, we now review 
decisions of the Appellate Division according to established principles of 
administrative law, except with regard to the hearing officer’s or ALJ’s factual 
findings.6  See Kroeger v. Dep’t of Envtl. Prot., 2005 ME 50, ¶ 7, 870 A.2d 566 
(explaining that we will only vacate an agency’s decision where that decision 
“violates the Constitution or statutes; exceeds the agency’s authority; is 
procedurally unlawful; is arbitrary or capricious; constitutes an abuse of 
                                         
6  “[I]n the absence of fraud,” the hearing officer’s or ALJ’s findings of fact are final.  39-A M.R.S. 
§ 318 (2016); see 39-A M.R.S. § 322(3) (2016).   
 
6 
discretion; [or] is affected by bias or an error of law”).  As we have 
consistently done in the past, we will continue to afford appropriate deference 
to the Appellate Division’s reasonable interpretation of the workers’ 
compensation statute, see Hackett v. W. Express, Inc., 2011 ME 71, ¶ 9, 21 A.3d 
1019, and will uphold the Appellate Division’s interpretation unless “the plain 
language of the statute and its legislative history” compel a contrary result.  
Guiggey v. Great N. Paper, Inc., 1997 ME 232, ¶ 10, 704 A.2d 375.   
B. 
Res Judicata and Permanent Impairment 
 
[¶10]  “It is well established that a valid judgment entered by a court, if 
not appealed from, generally becomes res judicata and is not subject to later 
collateral attack.”  Standish Tel. Co v. Saco River Tel. & Tel. Co., 555 A.2d 478, 
481 (Me. 1989) (emphasis omitted).  Likewise, “valid and final decisions of the 
Workers’ Compensation Board are subject to the general rules of res judicata 
and issue preclusion.”  Grubb v. S.D. Warren Co., 2003 ME 139, ¶ 9, 837 A.2d 
117.  Accordingly, “[a]bsent specific statutory authority, the Board may not 
reopen or amend a final decision.  Such a rule ensures finality of workers’ 
compensation decisions and effectuates the legislative desire for speedy and 
summary disposition of workers’ compensation cases.”  Guar. Fund Mgmt. 
 
7 
Servs. v. Workers’ Comp. Bd., 678 A.2d 578, 583 (Me. 1996) (footnote omitted) 
(citations omitted) (quotation marks omitted).  
 
1. 
Statutory Authority  
 
[¶11]  The workers’ compensation statute provides that “[e]mployees 
with work-related injuries may be entitled to incapacity benefits for either 
total or partial incapacity, based on the difference between the employee’s 
pre-injury wage and post-injury earning capacity.”  Morse v. Fleet Fin. Grp., 
2001 ME 142, ¶ 5, 782 A.2d 769; see 39-A M.R.S. §§ 211-213 (2016).  When an 
injured worker is granted partial incapacity benefits, his entitlement to 
receive compensation is capped at 2607 weeks unless it is determined that his 
“permanent impairment . . . resulting from the personal injury is in excess of 
15%8 to the body,” in which case there is no statutory cap.  39-A M.R.S. 
§ 213(1).  “Permanent impairment,” as defined by the statute, means “any 
anatomic or functional abnormality or loss existing after the date of maximum 
medical improvement that results from the injury.”  39-A M.R.S. § 102(16) 
                                         
7  A claimant may petition for an extension, but the statute provides that such an extension may 
not exceed an additional 260 weeks.  See 39-A M.R.S. § 213(4) (2016).  
8  The Legislature requires that the permanent impairment percentage threshold be reviewed 
yearly “so that 25% of all cases with permanent impairment will be expected to exceed the 
threshold and 75% of all cases with permanent impairment will be expected to be less than the 
threshold.”  39-A M.R.S. § 213(2).  The current threshold is 11.8%.  14 C.M.R. 90 351 002-1 
§ 1(1) (2014). 
 
8 
(2016) (emphasis added).  “Maximum medical improvement” is defined as 
“the date after which further recovery and further restoration of function can 
no longer be reasonably anticipated, based upon reasonable medical 
probability.”  Id. § 102(15). 
 
[¶12]  Read together, the above provisions provide for a 260-week cap 
for payment of benefits unless the injured employee’s (1) “anatomic or 
functional abnormality” (2) exceeding 15% to his body (3) persists after the 
date on which “further recovery . . . can no longer be reasonably anticipated, 
based upon medical probability.”  39-A M.R.S. §§ 102(15)-(16), 213.   
 
[¶13]  Here, the Appellate Division’s conclusion that relitigation of 
Bailey’s permanent impairment level was barred by the doctrine of res 
judicata is supported by the statute’s plain language and legislative history.  
Except for the very limited circumstances referenced in 39-A M.R.S. §§ 319 
and 321, the workers’ compensation statute provides no opportunity for a 
redetermination of a hearing officer’s or ALJ’s findings regarding permanent 
impairment or MMI.  Cf. Hird v. Bath Iron Works Corp., 512 A.2d 1035, 1038 
(Me. 1986) (concluding that the commission exceeded its authority in 
applying the doctrine of equitable estoppel where there was no “express or 
implied legislative authority” to do so).   
 
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[¶14]  This is in direct contrast to the statute’s inclusion of explicit 
procedures for adjusting benefit levels when an injured employee’s ability to 
be gainfully employed changes.  See, e.g., 39-A M.R.S. § 205(9) (2016).  We 
apply the “changed circumstances” test in those cases, requiring the party 
seeking to “increase or decrease compensation in a workers’ compensation 
case when a benefit level has been established by a previous decision . . . to 
show a change of circumstances . . . which may be met by either providing 
comparative 
medical 
evidence, 
or 
by 
showing 
changed 
economic 
circumstances.”  Grubb, 2003 ME 139, ¶ 7, 837 A.2d 117 (quotation marks 
omitted) (citations omitted) (petition to recalculate benefit level); see 
McIntyre v. Great N. Paper, Inc., 2000 ME 6, ¶¶ 1, 5-6, 743 A.2d 744 (petition 
for review of incapacity); Folsom v. New England Tel. & Tel. Co., 606 A.2d 1035, 
1036-1038 (Me. 1992) (petition for review of incapacity).   
 
[¶15]  This distinction between the determination of MMI and 
permanent impairment on one hand and an employee’s level of incapacity on 
the other reflects the Legislature’s crafting of the workers’ compensation 
statute to create a dichotomy of injured workers.  See 39-A M.R.S. § 213(1)(A), 
(2).  Those who have suffered workplace injuries that do not result in 
permanent impairment levels in excess of a specified whole person 
 
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percentage are eligible to collect compensation for no more than 260 weeks.  
Id. § (1)(A).  On the other hand, those who have suffered particularly severe 
injuries that nonetheless result in only partial disability are eligible to receive 
ongoing benefits without temporal limitations.  Id.  The permanent 
impairment determination does not, however, govern whether a claimant is 
actually entitled to receive benefits, either during or beyond the 260-week 
limit.  See 39-A M.R.S. § 205(9).  Whether an employee actually qualifies to 
receive incapacity benefits is subject to a determination pursuant to 
39-A M.R.S. § 205(9).   
 
[¶16]  A determination of permanent impairment as of the date of MMI 
is the method by which the Legislature chose to differentiate between these 
two classes of injured workers.  If a party were able to disturb a permanent 
impairment finding so as to either terminate an employee’s eligibility to 
receive ongoing benefits or award such eligibility after it had already been 
denied, the statute would be completely circumvented and the provisions 
creating the temporal dichotomy rendered superfluous.  See State v. 
Thompson, 2008 ME 166, ¶ 12, 958 A.2d 887 (“We give statutory language its 
plain meaning and do not treat language as superfluous or meaningless . . . .”). 
 
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[¶17]  Finally, by granting preclusive effect to decrees that establish 
MMI and permanent impairment for work-related injuries, the Legislature has 
minimized the expense and uncertainty associated with ongoing and 
repetitive litigation and helped to fulfill its “desire for speedy and summary 
disposition of workers’ compensation cases.”  Dunphe v. O’Connor, 1997 ME 
147, ¶ 4, 697 A.2d 421 (quotation marks omitted).  
 
2. 
Change of Circumstances  
 
[¶18]  The City next contends that the Appellate Division erred in 
concluding that the City failed to show a sufficient change of circumstances to 
warrant relitigation of the issue of Bailey’s permanent impairment level.  
Because a “changed circumstances” analysis does not apply to a permanent 
impairment finding, that argument is unpersuasive.  See 39-A M.R.S. § 205(9).  
Therefore, the Appellate Division did not err in declining to apply that analysis 
here.   
 
[¶19]  For the reasons set forth above, we affirm the decision of the 
Appellate Division vacating the hearing officer’s grant of the City’s petition to 
determine the extent of Bailey’s permanent impairment.  
 
The entry is: 
Judgment affirmed.  
 
 
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John H. King, Jr., Esq. (orally), Norman, Hanson & DeTroy, LLC, Portland, for 
appellant City of Lewiston and Cannon Cochran Management Services 
 
Benjamin DeTroy, Esq. (orally), Leary & DeTroy, Auburn, for appellee Michael 
F. Bailey 
 
James J. MacAdams, Esq., Nathan A. Jury, Esq., and Donald M. Murphy, Esq., 
MacAdam Law Offices, Portland, for amicus curiae the Maine Building Trades 
 
 
Workers’ Compensation Board Appellate Division case number 14-0050 
FOR CLERK REFERENCE ONLY