Title: IN THE MATTER OF THE WORKER'S COMPENSATION CLAIM OF : ROBERTA J. PALMER v. STATE OF WYOMING, ex rel., WYOMING WORKERS' SAFETY AND COMPENSATION DIVISION

State: wyoming

Issuer: Wyoming Supreme Court

Document:

IN THE MATTER OF THE WORKER'S COMPENSATION CLAIM OF : ROBERTA J. PALMER v. STATE OF WYOMING, ex rel., WYOMING WORKERS' SAFETY AND COMPENSATION DIVISION2008 WY 105192 P.3d 125Case Number: No. S-07-0244Decided: 09/08/2008
APRIL 
TERM, A.D. 2008

 
 
IN 
THE MATTER OF THE WORKER'S COMPENSATION CLAIM OF:  ROBERTA J. PALMER,

 
 
Appellant

(Petitioner),

 
 
v.

 
 
STATE OF WYOMING, ex rel., WYOMING WORKERS' SAFETY AND COMPENSATION 
DIVISION,

 
 
Appellee

(Respondent).

 
 
Appeal 
from the DistrictCourtofTetonCounty

The 
Honorable Nancy J. Guthrie, Judge

 
 
Representing 
Appellant:

David M. Gosar, Gosar 
Law Office, Jackson, 
Wyoming.

 
 
Representing 
Appellee:

Bruce A. Salzburg, 
Attorney General; John William Renneisen, Deputy Attorney General; Steven R. 
Czoschke, Senior Assistant Attorney General; Kristi Marie Radosevich, Assistant 
Attorney General.  

 
 
Before VOIGT, C.J., 
and GOLDEN, HILL, KITE, and BURKE, JJ.

 
 
BURKE, 
Justice.

 
 

[¶1]           
In 1998, Roberta 
Palmer was diagnosed with degenerated spinal disks in her lower back.  She received various medical and 
chiropractic treatments, but chose not to undergo surgery when that was 
recommended by her doctor.  In 2003, 
Ms. Palmer injured her back while at work.  
She received medical treatments and eventually surgery was performed on 
her back.  The Wyoming Workers' 
Safety and Compensation Division denied her request for benefits, taking the 
position that her back problems were preexisting, and therefore not 
compensable.  Ms. Palmer 
requested a hearing, and the hearing examiner determined that she had sustained 
a compensable workplace injury affecting part of her back, but that her other 
degenerative back problems were preexisting and therefore not compensable.  Ms. Palmer has appealed that 
decision.  We affirm in part and 
reverse in part.

 
 
ISSUES

 
 

[¶2]           
Ms. Palmer presents 
three issues, which we consider in this order:

 
 
1.  Does substantial evidence support the 
hearing examiner's decision awarding partial benefits and/or is the decision 
arbitrary and capricious?

 
 
2.  Did the Office of Administrative 
Hearings err as a matter of law when it apportioned Ms. Palmer's injury between 
her preexisting condition and the new injury caused by her workplace 
accident?

 
 
3.  Did the Office of Administrative 
Hearings err as a matter of law by failing to apply the ancillary treatment 
principle to award full benefits in this case?

 
 
FACTS

 
 

[¶3]           
In January of 1998, 
Ms. Palmer slipped on some ice and fell, causing pain in her back and right 
groin.  Upon seeking treatment, Ms. 
Palmer was diagnosed with a degenerative spinal condition affecting her disks at 
the L3-L4, L4-L5, and L5-S1 levels, along with an annular tear at L3-L4.  Ms. Palmer received medical and 
chiropractic treatments over the following months.  In August of that year, her treating 
physician, Dr. Mary Neal, recommended spinal fusion surgery at the L3 
through S1 levels.  For various 
reasons, Ms. Palmer chose not to have the surgery. 

 
 

[¶4]           
Later that year, Ms. 
Palmer received a chiropractic "bone traction" treatment.  She testified that this treatment 
largely relieved her back problems, although her chiropractor, 
Dr. Christopher Koch, testified that Ms. Palmer sought additional 
treatments in 2002 and 2003 relating, at least in part, to pain in her lower 
back. 

 
 

[¶5]           
On the morning of May 
30, 2003, Ms. Palmer injured her lower back lifting inventory at the convenience 
store where she worked.  She left 
work early and, when the pain continued through the afternoon, sought treatment 
from Dr. Koch.  He advised her 
to use an over-the-counter anti-inflammatory, to apply ice packs, and to rest at 
home.  The pain persisted, however, 
and when Ms. Palmer went back to Dr. Koch, he referred her to the hospital 
emergency room.

 
 

[¶6]           
At the hospital, Ms. 
Palmer was given pain medication.  
When that proved ineffective in relieving her pain, she was admitted to 
the hospital for further evaluation and treatment.  An MRI indicated several spinal 
conditions, including "advanced degenerative changes in her lumbar spine."  Over the next several months, 
Ms. Palmer was treated with varying degrees of success by spinal injections 
and other medications.  Although Ms. 
Palmer continued to suffer pain in her lower back and right leg, Dr. Neal this 
time recommended against surgery.

 
 

[¶7]           
In April of 2004, Ms. 
Palmer obtained a second opinion from Dr. Narotzky, a neurosurgeon.  He diagnosed many of the same conditions 
reflected in Ms. Palmer's earlier medical records, along with a new injury that 
he noted as "probable foraminal disk herniation at the L4-L5 level compressing 
the L4 nerve root at the right side."  
Dr. Narotzky concluded that this compression was causing Ms. 
Palmer's pain and the weakness in her lower back and right leg.  He recommended surgery.  In July of 2004, Dr. Narotzky performed 
the surgery, during which he was able to confirm his diagnosis that 
Ms. Palmer had suffered a herniated disk at level L4-L5.  Significantly, the surgery was not 
limited to fusion at the L4-L5 level where the disk was herniated, but included 
fusion at the level above, L3-L4, and at the level below, L5-S1. 

 
 

[¶8]           
The Wyoming Workers' 
Safety and Compensation Division denied benefits for Ms. Palmer's injury, 
maintaining that her condition was preexisting and not compensable.  Ms. Palmer contested the Division's 
denial of benefits, and the Office of Administrative Hearings heard her case in 
July of 2005.  The hearing examiner 
admitted deposition testimony from Drs. Neal, Narotzky, and Koch, and heard 
live testimony from Ms. Palmer, her husband, and a representative of Ms. 
Palmer's employer.  Ms. Palmer 
continued to assert that she was entitled to compensation for all of her medical 
bills, on the basis that her condition was caused by her work-related 
injury.  The Division maintained 
that Ms. Palmer's condition was not compensable because it was due entirely 
to a preexisting condition.  The 
hearing examiner reached a position somewhere between the parties' 
contentions.  His final order 
includes these determinations:

 
 
1.  The lower lumbar condition at L4-L5, 
specifically the foraminal herniation, is a work related injury under the 
Wyoming Workers' Compensation Act.  
[Ms. Palmer] is awarded benefits in accordance with the Wyoming Workers' 
Compensation Act, Rules and Regulations and Fee Schedules of the Workers' Safety 
and Compensation Division.

 
 
2.  The degenerative condition at levels 
L3-L4 and L5-S1 and the annular tear at L3-L4 . . . is not a work related injury 
under the Wyoming Workers' Compensation Act.  [Ms. Palmer]'s claim for benefits is 
denied.

 
 
The district court 
affirmed the hearing examiner's decision, and Ms. Palmer timely appealed to this 
Court.

 
 
STANDARD OF 
REVIEW

 
 

[¶9]           
We review 
administrative agency decisions pursuant to Wyo. Stat. Ann. § 16-3-114(c)(ii) 
(LexisNexis 2007), which requires us to:

 
 
(ii)        Hold 
unlawful and set aside agency action, findings and conclusions found to 
be:

 
 
            
(A)       
Arbitrary, capricious, an abuse of discretion or otherwise not in 
accordance with law;

 
 
(B)       Contrary to 
constitutional right, power, privilege or immunity;

 
 
(C)       In excess 
of statutory jurisdiction, authority or limitations or lacking statutory 
right;

 
 
(D)       Without 
observance of procedure required by law; or

 
 
(E)       Unsupported 
by substantial evidence in a case reviewed on the record of an agency hearing 
provided by statute.

 
 

We recently 
reiterated 
that under "the plain language of the statute, reversal of an agency finding or 
action is required if it is not supported by substantial evidence.'"  Dale v. S & S Builders, 
LLC, 2008 WY 84, ¶ 21, 188 P.3d 554, 561 (Wyo. 2008).  Substantial evidence is "relevant 
evidence which a reasonable mind might accept" as supporting the agency's 
decision.  Id., ¶ 11, 
188 P.3d  at 558.  "Importantly, our 
review of any particular decision turns not on whether we agree with the 
outcome, but on whether the agency could reasonably conclude as it did, based on 
all the evidence before it."  
Id., ¶ 22, 
188 P.3d  at 561.  An agency's 
conclusions of law are reviewed de 
novo, however, and are affirmed only if they are in accordance with the 
law.  Id., ¶ 26, 
188 P.3d  at 561-62.

 
 

DISCUSSION

 
 

[¶10]       
To be compensable 
under the Wyoming Workers' Compensation Act, an injury must arise "out of and in 
the course of employment while at work."  
Wyo. Stat. Ann. § 27-14-102(a)(xi).  Benefits are not available for an 
"injury or condition preexisting at the time of employment with the employer 
against whom a claim is made."  
Id., 
§ 27-14-102(a)(xi)(F).  The 
hearing examiner found that Ms. Palmer's foraminal herniation at level 
L4-L5 was a work-related injury, and therefore compensable.  He found that the degenerative condition 
at levels L3-L4 and L5-S1 was not work-related, but preexisting, and therefore 
not compensable.  

 
 

[¶11]       
Whether an employee's 
injury is work-related or preexisting is a question of fact.  Taylor v. State ex rel. Wyoming Workers' 
Safety & Comp. Div., 2005 WY 148, ¶ 9, 123 P.3d 143, 146 (Wyo. 
2005).  Accordingly, we will affirm 
the hearing examiner's findings if they are supported by substantial evidence, 
and set them aside if they are not.  
Our review of the record indicates that there is substantial evidence to 
sustain the hearing examiner's findings.

 
 

[¶12]       
The evidence of record 
establishes that Ms. Palmer suffered from preexisting back problems.  She had been diagnosed in 1998 with 
degenerative disks at levels L3-L4, L4-L5, and L5-S1.  Her back pain at that time was noted as 
"chronic," and she received numerous medical and chiropractic treatments for her 
back.  As the hearing examiner 
accurately noted, both Dr. Neal and Dr. Narotzky "agree that [Ms. Palmer] 
had a degenerative disk disease . . . prior to May 30, 2003."  There is substantial evidence supporting 
the hearing examiner's determination that Ms. Palmer's degenerative disk 
condition was preexisting, not work-related, and not compensable for that 
reason.

 
 

[¶13]       
The evidence of record 
also establishes that Ms. Palmer's incident at work on May 30, 2003, resulted in 
injury to her back.  Dr. Narotzky 
testified that an MRI indicated foraminal disk herniation at level L4-L5, along 
with the preexisting degenerative disk condition.  He testified that the foraminal 
herniation was "clearly caused" by her work injury.  According to Dr. Narotzky, the 
symptoms reported by Ms. Palmer after the incident corresponded with what 
would be expected from this type of injury.  Moreover, when he performed surgery on 
Ms. Palmer's back, Dr. Narotzky confirmed his diagnosis.  There is substantial evidence supporting 
the hearing examiner's determination that Ms. Palmer suffered foraminal 
herniation at level L4-L5 as a result of her injury at 
work.

 
 

[¶14]       
Affirming these two 
determinations does not resolve the case, however.  Indeed, the parties do not seriously 
dispute that Ms. Palmer suffered from both a preexisting condition and a new 
work-related injury.  At the core of 
their dispute is the question of what benefits Ms. Palmer should receive 
for medical costs that relate to both a work-related injury and a preexisting 
condition.  The hearing examiner 
awarded Ms. Palmer benefits for the herniated disk at level L4-L5.  Ms. Palmer interprets that to mean 
she will receive benefits for the spinal fusion at the L4-L5 level, but is 
"denied all other benefits associated with adjacent levels, including that 
portion of the fusion surgery that addressed degenerative changes below and 
above L4-L5."  The Division does not 
deny this interpretation.  Based on 
several different theories, Ms. Palmer contends that her benefits should 
not be limited to the single fusion at level L4-L5, but that she should receive 
benefits for the entire surgery, which included spinal fusion at levels L3 
through S1.

 
 

[¶15]       
Ms. Palmer first 
asserts that the hearing examiner "apportioned" her injury between the 
preexisting condition and her workplace injury.  She cites Boyce v. State ex rel. Wyoming Workers' 
Safety & Comp. Div., 2005 WY 9, ¶ 11, 105 P.3d 451, 455 (Wyo. 2005) 
for the proposition that it is improper to "apportion the aggravation between 
work conditions and other possible contributing factors."  However, we do not read the hearing 
examiner's decision as apportionment.  
Ms. Palmer's back problems are of at least two different types  
degeneration and herniation  with at least two separate causes  the 
preexisting condition and the work-related injury.  The hearing examiner did not engage in 
improper apportionment when he awarded benefits for the work-related herniation 
and denied benefits for the preexisting degeneration.

 
 

[¶16]       
Ms. Palmer also 
seems to contend that she is entitled to more benefits because her injury 
aggravated her preexisting condition.  
She correctly contends that, when "an employee suffers from a preexisting 
condition, that employee may still recover if his employment substantially or 
materially aggravates that condition."  
Ramos v. State ex rel. Wyoming 
Workers' Safety & Comp. Div., 2007 WY 85, ¶ 17, 158 P.3d 670, 676 
(Wyo. 2007), quoting Boyce, 
¶ 10, 105 P.3d  at 455. The record contains conflicting evidence on whether 
Ms. Palmer's work-related injury aggravated her preexisting condition.  Dr. Narotzky opined that it 
did.  Dr. Neal opined that it 
did not, and that the injury caused only temporary exacerbation of her 
preexisting symptoms.  The hearing 
examiner found Dr. Neal's testimony "credible and persuasive," and made a 
specific finding that Ms. Palmer's injury did not aggravate or exacerbate 
her preexisting condition.  Because 
Dr. Neal's testimony provided substantial evidence to support that finding, 
we will affirm it.

 
 

[¶17]       
Finally, Ms. Palmer 
asserts that she is entitled to benefits for the fusion at all three levels 
because effective treatment of her herniated disk at L4-L5 required fusion not 
just at level L4-L5, but also at L3-L4 and at L5-S1.  Ms. Palmer relies on the principle of 
ancillary treatment, asserting that if effective treatment of a compensable 
injury requires ancillary treatment for otherwise noncompensable conditions, 
then the worker may be entitled to benefits covering the entire course of 
treatment.  See State ex rel. Wyoming 
Workers' Compensation Div. v. Girardot, 807 P.2d 926, 930 (Wyo. 1991).1

 
 

[¶18]       
This principle is 
reflected in the Division's rules and regulations, which provide that "Workers 
with injuries compensable under the Act shall be provided reasonable and 
necessary health care benefits as a result of such injuries."  Rules, Regulations and Fee Schedules of 
the Wyoming 
Workers' Safety and Compensation Division, Chapter 7, Section 3(a)(i).  The term "medically necessary treatment" 
is defined to include "those health services for a compensable injury that are 
reasonable and necessary for the diagnosis and cure or significant relief of a 
condition."  Id., Chapter 1, 
Section 4(al).  Thus, if ancillary 
treatments are reasonable and necessary to cure or relieve a compensable injury, 
then the worker is entitled to benefits for the ancillary treatments as 
well.  We applied this principle in 
Forni v. Pathfinder Mines, 834 P.2d 688, 694 (Wyo. 
1992).  Mr. Forni had suffered a 
work-related injury that required back surgery.  We ruled that he was also entitled to 
benefits for "the treatments afforded for his depression and diabetes," because 
those treatments "were necessary, and ancillary, to his back surgery."  Id.  Other jurisdictions also recognize the 
ancillary treatment principle.  See, e.g., Public Service Co. v. Industrial Claim 
Appeals Office, 979 P.2d 584 (Colo. Ct. App. 1999) (psychiatric treatment 
was compensable because it was necessary to prepare the worker for surgery to 
treat a compensable work-related injury); Arrowhead Press, Inc. v. Industrial 
Comm'n, 653 P.2d 371 (Ariz. Ct. App. 1982) (treatment for bronchitis was 
compensable because it was necessary for the treatment of a compensable 
condition).

 
 

[¶19]       
In Ms. Palmer's case, 
Dr. Narotzky testified that he had performed a "multi-level fusion," rather than 
a single fusion at the L4-L5 level, because there were "degenerative changes at 
other levels which needed to be addressed at the time the foraminal disk 
herniation was addressed."  He 
explained further:

 
 
I think one could 
debate whether one needed to do the L3-4 level or not.  Could she have gotten relief with just 
an L-4 to sacrum procedure[?]  The 
problem is leaving a disk above a fusion where that disk is already bulging and 
has an annular tear is an absolute setup for that disk to herniate in the very 
near future if you don't do something.

 
 
Significantly, there 
is no evidence in the record disputing Dr. Narotzky's conclusion that treating 
Ms. Palmer's work-related injury at level L4-L5 required fusions at levels L3 
through S1, and neither the Division nor the hearing examiner has suggested that 
Dr. Narotzky's testimony on this issue lacked credibility.  The hearing examiner's conclusion that 
Ms. Palmer should be denied benefits for this ancillary treatment is not 
supported by substantial evidence in the record, and must be reversed.  The only determination that can 
reasonably be reached on this record is that Ms. Palmer's benefits are not 
limited to the L4-L5 fusion, but include the fusions at all 
levels.

 
 

[¶20]       
In conclusion, we 
affirm the hearing examiner's decision that Ms. Palmer's foraminal 
herniation at level L4-L5 was a compensable, work-related injury.  We also affirm his determination that 
the degenerative condition at levels L3-L4 and L5-S1 was preexisting and not 
work-related.  However, 
the hearing examiner's decision to limit Ms. Palmer's benefits to the 
fusion at level L4-L5 is reversed, and this case is remanded to the district 
court, for further remand to the agency with instructions to award benefits to 
Ms. Palmer consistent with this opinion.

 
 
FOOTNOTES

 
 

1The 
Division urges us not to consider this issue on appeal because Ms. Palmer 
did not raise it before the hearing examiner.  See, e.g., Perry v. State ex rel. Wyoming Workers' 
Safety & Comp. Div., 2006 WY 61, ¶ 22 n.2, 134 P.3d 1242, 1249 n.2 
(Wyo. 2006).  But while she did not 
assert the ancillary treatment principle by that name, she did present evidence 
and arguments that implicitly raised this issue, and that provide us with 
adequate information to undertake a meaningful review of the hearing examiner's 
decision.