Present: Kinser, C.J., Lemons, Millette, Goodwyn, and Mims, 

JJ., and Russell and Koontz, S.JJ.

JOHN A. ILG

OPINION BY

v. Record No. 111439 SENIOR JUSTICE LAWRENCE L. KOONTZ, JR.

June 7, 2012

UNITED PARCEL SERVICE, INC., ET AL.

FROM THE COURT OF APPEALS OF VIRGINIA

This appeal of a workers' compensation case involves an 

employer's application to suspend benefits pursuant to Code 

§ 65.2-708 for the alleged unjustified refusal of an injured 

employee to accept vocational rehabilitation services provided 

by the employer under Code § 65.2-603. The issue presented is 

whether the employee should be permitted to offer evidence

that the refusal is justified because of a disabling injury 

which arose out of the same industrial accident for which he 

was awarded benefits, but which was not expressly designated 

in the award as a compensable injury.

BACKGROUND

This case, which twice has been reviewed by the Workers' 

Compensation Commission and the Court of Appeals, has a 

lengthy and complex procedural history. For purposes of this 

appeal, however, we may confine our discussion of the facts 

and proceedings to those relevant to the issue presented, 

making reference to the more complete expression of the 

background of the injury, the award of compensation, and 
2

ancillary proceedings stated in the Court of Appeals' first 

review of the case in United Parcel Service v. Ilg, 54 Va. 

App. 366, 368-71, 679 S.E.2d 545, 546-47 (2009) (hereinafter 

"Ilg I").

On February 12, 2007, John A. Ilg, a delivery truck 

driver employed by United Parcel Service for twenty-three 

years, suffered an injury by accident when he fell from his 

employer's truck during the course of his employment. On 

April 26, 2007, Ilg, pro se, filed a claim for workers' 

compensation benefits with the Commission, stating in the 

claim that he had suffered an "injury to right hand and right 

knee." United Parcel Service and its workers' compensation 

carrier, Liberty Insurance Corporation (hereinafter 

collectively "UPS"), accepted the claim and voluntarily paid 

either temporary total or temporary partial disability 

benefits from February 13, 2007 to February 16, 2007 and 

temporary total disability benefits from February 17, 2007 

going forward.

Subsequently, on June 29, 2007, Ilg and UPS executed an 

original agreement to pay benefits and three supplemental 

agreements memorializing the prior voluntary payments of 

benefits. The nature of the injury was listed in the original 

agreement only as "Pain in Right Knee" and in each of the 

supplemental agreements as "Pain in rt knee." No reference 
3

was made to an injury of the right hand. On July 12, 2007, 

the Commission issued an award order approving the original

and supplemental agreements.

On November 6, 2007, an attorney retained by Ilg after 

the entry of the July 12, 2007 order sent a letter to the 

Commission requesting the records of Ilg's claim. The letter 

further advised the Commission that Ilg had suffered injuries 

to his right hand and his head in addition to the injury to 

his right knee and requested a hearing to determine whether 

Ilg was entitled to any additional benefits. The Commission 

responded by supplying the requested records, but neither 

referenced the assertion of the additional injuries nor took 

any action on the request for a hearing.

On February 25, 2008, Dr. Randall Peyton prepared and 

signed two fitness for duty evaluations of Ilg. In one form, 

Dr. Peyton opined that based on Ilg's continuing "knee pain" 

he was fit for restricted duty performing "[m]edium work." In 

the other form, Dr. Peyton opined that Ilg was "unable to work 

in any capacity" because of the injuries to his "R knee/R 

hand." Dr. Peyton further indicated that the condition of the 

hand was worsening because of "work-hardening therapy" Ilg was 

undergoing and that Ilg "is supposed to have this operated 

on." Based on the fitness for duty evaluation stating that 

Ilg could perform medium level work, UPS directed him to 
4

participate in vocational rehabilitation. Ilg declined to do 

so, citing Dr. Peyton's second report that Ilg was unable to 

work in any capacity.

UPS then filed an application with the Commission for a 

Code § 65.2-708 review hearing, seeking to suspend Ilg's 

benefits under the July 12, 2007 order for unjustifiably 

refusing to participate in vocational rehabilitation pursuant 

to Code § 65.2-603. UPS included in its application Dr. 

Peyton's report that Ilg was available for medium work. Ilg 

opposed the application, submitting Dr. Peyton's report that 

indicated Ilg was unable to work in any capacity. A senior 

claims examiner denied the application, finding that UPS had 

not established probable cause of an unjustified refusal. The 

examiner opined that the failure of the original and 

supplemental agreements to mention the injury to Ilg's right 

hand was "likely due to poor preparation" of the forms and 

that the injury to Ilg's right hand was included in the July 

12, 2007 award of compensation benefits. The Commission 

upheld that decision.

UPS appealed the Commission's decision denying the 

application for a Code § 65.2-708 review hearing to the Court 

of Appeals. In reversing the judgment of the Commission in 

Ilg I, the Court, relying on American Furniture Co. v. Doane, 

230 Va. 39, 42-43, 334 S.E.2d 548, 550-51 (1985) (hereinafter 
5

Doane), expressed the view that "a medical condition not 

causally related to the work-related accidental injury for 

which benefits were originally awarded" could not serve as the 

basis for the employee refusing to cooperate with vocational 

rehabilitation. Ilg I, 54 Va. App. at 374, 679 S.E.2d at 549

(emphasis added). The Court further stated that UPS' 

"application to suspend benefits should have been granted 

unless [Ilg]'s hand condition, which prevented his cooperation 

with vocational rehabilitation, was the subject of an 

enforceable award finding that the hand condition was the 

result of the work-related accident." Id.

The Court further concluded that the claims examiner 

erred in presuming that Ilg's hand injury was included in the 

July 12, 2007 award of compensation benefits, and, as "that 

issue was never raised, or addressed, by the parties for . . .

consideration," it had never been established that Ilg's hand 

injury was causally related to the February 12, 2007 

compensable accident. Id. at 379, 679 S.E.2d at 551. The 

Court also found that in reviewing the claims examiner's 

decision, the Commission had incorrectly placed upon UPS "the 

burden of presenting medical evidence in their application 

showing the hand injury was 'pre-existing' or was 'unrelated 

to' the industrial accident." Id. For these reasons, the 

Court reversed the Commission's decision denying UPS' 
6

application and directed the Commission "to place this case on 

the hearing docket." Id. Ilg did not appeal this decision to 

this Court.

Upon remand, a deputy commissioner found that Ilg 

justifiably refused to cooperate with UPS' rehabilitation 

efforts because he suffered from a total disability and, thus, 

had no obligation to participate in vocational rehabilitation. 

In a divided decision, the Commission reversed the deputy 

commissioner's decision. A majority of the Commission 

concluded that the decision in Ilg I required the Commission 

to consider only whether "to terminate an outstanding award 

which only covered the claimant's knee" because "[t]here was 

no award or agreement relating to the hand injury." The 

majority reasoned that "[t]o allow [Ilg] to establish a 

justification for his refusal by relying upon a causal 

connection between his hand injury and the compensable 

accident would allow [him] to convert this proceeding from one 

under Code § 65.2-708 to a proceeding under Code § 65.2-704, 

which the Court of Appeals held was prohibited." (Emphasis 

added.) Thus, the majority concluded that Ilg was precluded 

from asserting the hand injury as a defense to UPS' assertion 

that his refusal to participate in vocational rehabilitation 

was unjustified.
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Commissioner Diamond dissented. In her view, the 

majority had misinterpreted the decision in Ilg I as rendering 

"a final decision on [UPS'] application in which [Ilg] could 

not defend . . . with evidence and testimony concerning his 

right hand." Rather, the Court in her view merely determined 

that the denial of the application for a hearing had been 

wrongly denied. Because the evidence plainly showed that Ilg 

had not been released by Dr. Peyton, Commissioner Diamond

would have upheld the deputy commissioner's determination that 

Ilg's refusal to participate in vocational rehabilitation was 

justified.

Ilg appealed this decision to the Court of Appeals. In a 

memorandum opinion, the Court, again relying on Doane, 230 Va. 

at 42-43, 334 S.E.2d at 550, affirmed the Commission's 

decision suspending Ilg's benefits. Ilg v. United Parcel 

Service, Inc., Record No. 2314-10-4, slip op. at 7 (July 12, 

2011) (hereinafter Ilg II). The Court agreed with the view 

expressed by the majority of the Commission that allowing Ilg 

to assert that his hand injury arose from the February 12, 

2007 accident would convert the Code § 65.2-708 proceeding to 
8

a proceeding under Code § 65.2-704.∗ Id., slip op. at 6. In a 

footnote, the Court indicated, however, that in its prior 

opinion in Ilg I "the pertinent question concerned whether 

'the commission erred in rejecting the hearing application' 

. . . and so only this ground of relief was properly before 

[the Court]. Moreover, our opinion left open the possibility 

that Ilg would seek a formal award for his hand injury" under 

Code § 65.2-704. Id., slip op. at 7 n.5.

We awarded Ilg an appeal to address the following 

assignments of error:

1. The Virginia Court of Appeals erred in its

opinion of July 12, 2011, by holding that claimant 

cannot respond to the Employer’s unjustified refusal 

of vocational rehabilitation allegation with 

evidence that he suffers from other accident-related 

conditions that render him totally disabled. 

2. The Court of Appeals’ decision erroneously held 

that claimant cannot prove justification for his 

refusal of vocational rehabilitation services by 

showing totally disabling accident-related

conditions that render such services premature. 

3. The Court of Appeals erred in affirming the 

Commission’s implicit finding that claimant was 

guilty of an “unjustified” refusal of vocational 

rehabilitation services.

 ∗ Essentially, Code § 65.2-704 addresses an original 

determination that an employee has suffered a compensable 

injury, whereas Code § 65.2-708 addresses a change in 

condition which permits the Commission to make an award 

ending, diminishing, or increasing the compensation previously 

awarded.
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DISCUSSION

Before addressing the merits of Ilg's appeal, we first 

consider a challenge raised by UPS asserting that Ilg I

decided the issue of whether Ilg's hand injury was causally 

related to the February 12, 2007 accident because the Court of 

Appeals found that the claims examiner erred in making the 

assumption that this was so and the Commission further erred 

in placing the burden on UPS to present evidence to the 

contrary in its application. UPS asserts that under the "law 

of the case" doctrine Ilg was prohibited from raising these 

issues on remand, especially as he failed to appeal the 

judgment in Ilg I to this Court.

This challenge is readily resolved by reference to the 

Court of Appeals' observation in Ilg II that "the pertinent 

question [in Ilg I] concerned whether 'the commission erred in 

rejecting the hearing application' . . . and so only this 

ground of relief was properly before [the Court]." Ilg II, 

slip op. at 7 n.5. Indeed, the Court had observed in Ilg I

that the "issue [of whether Ilg's hand injury was compensable] 

was never raised, or addressed, by the parties for . . .

consideration" by the claims examiner or the Commission. 54 

Va. App. at 379, 679 S.E.2d at 551. As no hearing had been 

conducted in the Commission prior to Ilg I, no determinations 

of fact or consideration of which party had the burden of 
10

proof on a given issue were necessary to the Court of Appeals'

decision that UPS' application for a hearing had been 

improperly denied. Thus, the Court's observations on these 

matters were merely part of its discussion of the "pertinent 

question" and as such are not dispositive determinations of 

law or fact. Accordingly, the law of the case doctrine does 

not apply to these issues or limit their consideration by the 

Commission on remand or of the appellate courts in reviewing 

its decision.

We now begin our consideration of the merits of Ilg's 

appeal by reviewing Doane, the case relied upon by the Court 

of Appeals in both Ilg I and Ilg II to support its conclusion 

that an employee may not assert "a medical condition not 

causally related to the work-related accidental injury for 

which benefits were originally awarded" as the basis for the 

employee refusing to cooperate with vocational rehabilitation. 

The Court of Appeals reasoned that allowing the employee to do 

so would convert a Code § 65.2-708 proceeding to a proceeding 

under Code § 65.2-704 by making a de facto award for the 

injury that was not the subject of the prior award.

In Doane, the employee was awarded temporary total 

disability for a back injury arising out of and in the course 

of employment. After a deputy commissioner found that an arm 

impairment which prevented the employee from performing 
11

selective employment was not causally connected to the 

industrial accident for which an award of benefits had been 

made, the employee's compensation was suspended because of her

unjustified refusal of selective employment. Doane, 230 Va. 

at 42, 334 S.E.2d at 550. The Commission reinstated benefits, 

concluding that the offered selective employment must be 

within the employee's capacity at the time offered, regardless 

of whether that capacity was affected by an unrelated injury. 

Id. 

Reversing the Commission, we held that employment 

suitable to an employee's capacity meant employment within the 

employee's residual capacity resulting from the industrial 

accident because an employer "is liable for the condition of 

an employee resulting from an industrial accident. But an 

employer is not liable for conditions not causally related to 

the employee's work." Id. (emphasis added). Thus, we 

concluded that "[a]n employer, therefore, is absolved of 

liability for compensation if the employee refuses selective 

employment because of a physical condition unrelated to the 

original industrial accident and arising since the accident." 

Id. at 43, 334 S.E.2d at 550 (emphasis added).

As indicated by the emphasized language in the passages 

quoted above, our focus in Doane was on whether the employee's 

asserted justification for refusing selective employment was a 
12

condition causally related to the original industrial 

accident, not whether it arose from the specific injury 

described in the award of compensation benefits which the 

employer sought to suspend. The rationale of Doane does not 

resolve the inquiry in this case because Ilg's asserted 

justification for refusing to participate in vocational 

rehabilitation is not "unrelated to the original industrial 

accident." Indeed, both UPS and the Commission were aware 

from his original application that Ilg claimed benefits for 

"injury to right hand and right knee" resulting from the 

industrial accident. Accordingly, under the facts presented 

here, the inquiry is whether it was necessary for Ilg to first 

obtain an award of benefits under Code § 65.2-704 for his hand

injury in order to assert a disability arising from that 

injury as justification for refusing to accept and participate 

in vocational rehabilitation offered under an earlier award of 

benefits for his knee injury arising from the same industrial 

accident.

The Commission and the Court of Appeals found that 

permitting an employee to justify a refusal to accept 

vocational rehabilitation services based on a disabling injury 

arising from an industrial accident, but not expressly 

denominated as included in a prior award, would amount to a 

"de facto" award for the injury which would convert a Code 
13

§ 65.2-708 proceeding into a Code § 65.2-704 proceeding. 

Thus, they concluded that Ilg's failure to have the July 12, 

2007 order reflect that he had suffered a compensable injury 

to his right hand in addition to a compensable injury to his 

right knee in the February 12, 2007 accident barred him from 

asserting his hand injury as a justification for refusing to 

participate in vocational rehabilitation. We disagree.

Previously, we have not had occasion to address a case in 

which the issue presented was whether an employee receiving 

workers' compensation benefits for partial or total disability 

has unjustifiably refused to participate in vocational 

rehabilitation offered by the employer under Code § 65.2-603. 

There are obvious differences between what may be reasonably 

expected of the employee to participate in vocational 

rehabilitation and that which may be reasonably expected when 

selective employment is offered by the employer under Code 

§ 65.2-510. Nevertheless, in Doane and subsequently in 

Ballweg v. Crowder Contracting Co., 247 Va. 205, 209, 440 

S.E.2d 613, 615 (1994), we stressed that when an employer 

offers selective employment to an injured employee "suitable 

to his residual capacity, the burden of persuasion shifts to 

the employee to show justification for refusing the offer." 

We are of opinion that this principle is equally applicable to 
14

cases involving the refusal to participate in vocational 

rehabilitation offered under Code § 65.2-603.

In the present case, Ilg had filed a claim with the 

Commission for injuries to his right knee as well as his right 

hand. UPS accepted that claim and voluntarily paid disability 

benefits to Ilg. Dr. Peyton provided UPS with his medical 

opinion that Ilg was "unable to work in any capacity" because 

of injuries to his right knee and right hand. Ilg sought to 

justify his subsequent refusal to participate in vocational 

rehabilitation based on his hand injury. Under such 

circumstances, it would be the height of form over substance 

to find that an asserted injury related to the industrial 

accident for which benefits have been awarded cannot justify 

the employee's refusal of the employer's offer of selective 

employment or of vocational rehabilitation unless that injury

is also the subject of a prior award pursuant to Code § 65.2-

704. If the Commission in considering an employer's 

application under Code § 65.2-708 concludes that the refusal 

is justified, this does not result in an award of benefits for 

the asserted injury. Rather, the result is merely that the 

employee continues to receive benefits in accord with the

original award.

Accordingly, we hold that the Court of Appeals erred in 

determining that Ilg was precluded from asserting that his 
15

refusal of vocational rehabilitation was justified because he 

remained fully disabled by his hand injury related to the 

industrial accident for which he was receiving benefits for 

his compensable knee injury. Because there has not yet been a 

determination by the Commission as to whether the disability 

related to Ilg's right hand in 2008 was, in fact, causally 

related to the February 12, 2007 accident, we express no 

opinion on that issue, but will remand the case to the Court 

of Appeals for remand to the Commission for an evidentiary 

proceeding where the burden will be on Ilg to show that his 

refusal to participate in vocational rehabilitation was 

justified in light of his hand injury.

In the Commission and in the Court of Appeals it was 

suggested that Ilg might have been, and might yet be, entitled 

to request a Code § 65.2-704 proceeding to determine if he is 

entitled to compensation for the injury to his hand, or any 

other injury, arising from the February 12, 2007 accident. 

However, that issue has not been raised by either party in 

this appeal. We express no opinion thereon except to note 

that nothing herein should be interpreted as barring Ilg from 

seeking to pursue such a claim if he chooses to do so.

CONCLUSION

For these reasons, we will reverse the judgment of the 

Court of Appeals and remand the case to the Court with 
16

instruction to remand the case to the Commission for further 

proceedings consistent with this opinion.

Reversed and remanded.

JUSTICE MIMS, concurring.

I concur with the Court’s analysis and in the judgment 

but write separately to stress that this case is decided 

narrowly. Reading the holding broadly, one might conclude 

that an employee who relies on an injury that is related to an 

accident for which benefits have been awarded, but which 

injury is not itself the subject of the award, could prolong 

his receipt of benefits by foregoing or delaying treatment. 

That is beyond the scope of the Court’s holding today. 

Accordingly, persistent failure to treat, or unreasonable 

delay in treatment of, an injury found to justify an 

employee's refusal of selective employment or vocational 

rehabilitation may be a change of condition under Code § 65.2-

708, thereby affording the employer the opportunity for a 

review hearing to assert that benefits should be suspended if 

the failure or delay is found to be unjustified under Code 

§ 65.2-603(B).