Title: Ilg v. United Parcel Serv.
Citation: N/A
Docket Number: 111439
State: Virginia
Issuer: Virginia Supreme Court
Date: June 7, 2012

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. 
 
9 
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 
 
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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).