Court Opinion

ID: 9796100
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:48:47.110189+00
Date Added: 2024-06-11T08:48:59.059899
License: Public Domain

EASTAUGH, Justice,
dissenting.
This is what the board said in the critical passage of the dispositive portion of the decision denying VECO's Second Injury Fund claim:
The Board finds that the employer's written record that the employee had prior back injuries and surgeries, and nothing more, does mot reasonably connote a preexisting arthritic condition and therefore is insufficient as a matter of law to establish the employer's written notice of a pre-existing qualifying disability.
(Emphasis added.) The entire paragraph containing the dispositive portion of the board's decision is attached as Appendix A.
The board's assessment of the employer's written records is supported by substantial evidence-the records themselves. The board's decision is also consistent with the legal standard that controls Second Injury Fund claims. Because the board did not err, we should affirm.
Today's opinion instead reverses and remands. I think it does so erroneously. But whatever the ultimate result may be in this case, we should not adopt a new and unjustified test for determining whether AS 28.30.205(c) is satisfied. I therefore respectfully dissent.
My disagreement starts with the standard of review. The court's opinion regards the case as turning on a question of statutory interpretation, freeing this court to apply its independent judgment.1
But this case does not really turn on statutory interpretation. The critical question is whether the employer's prior knowledge of the employee's qualifying disability can be fairly and reasonably inferred from the employer's written records.2 That is how we phrased the question in Alaska International Constructors v. State, Second Injury Fund,3 *993a comparable case. As so phrased, the question inherently asks the board to weigh the written records to determine what fair and reasonable inferences may be drawn from them. In theory, an employer's written ree-ords could be so self-explanatory and self-evident that they would compel the board to conclude that the employer's prior imputed knowledge of a qualifying disability either must be, or may not be, fairly and reasonably inferred. If the written records do not compel one of those legal conclusions, they necessarily raise a factual question to be decided by the board. We apply the substantial evidence test in reviewing the board's factual finding.4 The board here found that the written record showing only the employee's prior back injuries and surgeries "does not reasonably connote" a preexisting arthritic condition. The board's decision is ultimately based on its factual assessment of the adequacy of VECO's written records. We should review that assessment under the substantial evidence standard of review.
The realities of this case confirm that the substantial evidence standard of review applies. The board was in the best position to evaluate VECO's records and determine whether they permitted an inference of arthritis. We have no superior information or training that allows us to make a finding the board did not, or to say that the board should have reached a different result. We certainly cannot say that the information in the written records was so clear that the board erred in making its factual finding.5
Whether the board applied the correct standard in weighing the evidence' theoretically presents a threshold legal question. I say "theoretically," because there is no plausible indication the board deviated from the dictates of the controlling statute or from what we have said about applying that statute. The board said two things potentially bearing on whether it was actually making a legal determination. First, it noted that the employee was not informed he had arthritis until "long after" he filled out VECO's questionnaires. The court reads this statement as reflecting the board's legal misunderstanding of what evidence is relevant.6 But the board did not reason that Huizenga's ignorance foreclosed VECO's claim. After mentioning what Huizenga was told, the board looked at VECO's written records in deciding whether there was a "fair and reasonable inference" VECO knew of a permanent impairment.7 Second, the board stated that the employer's record "is insufficient as a matter of law" to satisfy the statute. But that conclusion depended on the board's review of the records and its determination that they do not reasonably connote a qualifying condition.
The court's opinion reads the board's decision as "requiring VECO to present evidence that showed unequivocally that VECO knew Huizenga had arthritis rather than simply a permanent impairment...." 8 It is unclear *994what error the court perceives. If the quoted passage is raising a question about the standard of proof, the independent standard of review would apply to that legal issue. But, as the plain text of the board's disposi-tive paragraph reveals, the board did not apply the wrong-"unequivocal"-standard of proof. If the quoted passage is raising a question about whether the board misapplied the statutory standard, whether the board did so is indeed a legal question. But because I think the board applied the correct statutory standard, the ultimate question is whether substantial evidence supported the board's factual assessment of the written records.
My second disagreement with the court's opinion is more fundamental. The opinion departs from both the statutory standard and from the approach we have said we (and the board) should follow in deciding such disputes. The Alaska Legislature adopted a Second Injury Fund scheme with two requirements germane here: first, that the employer, before it hired or retained the employee, had knowledge (or, more accurately, imputed knowledge) of the employee's permanent physical impairment; second, that this knowledge be established by the employer's written records.9 Whether the employer's records establish the employer's knowledge of the qualifying condition is normally for the board to decide.10 Whether the evidence is sufficient is peculiarly within the board's province.11 In Sea-Land Services, Inc. v. State, Second Injury Fund, we approvingly quoted as follows from a Tennessee Supreme Court opinion that interpreted what we described as "a written record requirement substantially identical to AS 23.30.205(c)":
when it can fairly and reasonably be inferred from such records as are produced in evidence that the employer did have knowledge of the physical handicap or impairment of the employee before occurrence of the injury which activates the Second Injury Fund claim, then the [statutory] requirements ... are satisfied.[12]
We then adopted for Alaska the test announced by the Tennessee Supreme Court: "[Aln employer is entitled to reimbursement from the Second Injury Fund if it produces a written record from which its prior knowledge of the employee's qualifying disability can fairly and reasonably be inferred."13 We also stated that the written record "need not contain the exact medical terminology employed in AS 28.30.205(d)(1)." 14
Today's opinion seems to alter the longstanding test announced in Sea-Land Services and applied in Alaska International.15 The opinion does so in apparent reliance on a passage the court quotes from the Larson *995treatise.16 I doubt that Larson intended the quoted passage to apply to written-records states like Alaska. The quoted passage is introduced by the preceding paragraph of the treatise.17 The introductory paragraph states: "An obvious question in states requiring actual employer knowledge is: How much must the employer have known about the actual nature of the prior injury?" 18 As I read Larson, the passage quoted by the court was not meant to apply to a written-record jurisdiction like Alaska, and only applies to states requiring "actual knowledge" for Second Injury Fund claims.19 Alaska is not such a state. The legislature adopted a written-record standard, not an actual-knowledge standard, for Second Injury Fund claims in Alaska. Written records are used in Alaska to impute knowledge but neither AS 23.30.205 nor our case law requires that the employer have actual knowledge of the contents of the record or the impairment. Larson's treatise distinguishes actual-knowledge jurisdictions from written-record jurisdictions, noting, among other things, that a "down-to-earth reason for disapproving the [actual-knowledge] rule is that it involves one of those distinctions that consume far more litigation time and cost than the policy at stake is worth." 20
After revising the longstanding test in Sea-Land Services and Alaska International, the opinion proposes another standard that is potentially just as problematic. The opinion asserts that the underlying purpose of the Second Injury Fund
is satisfied if the employer's written record shows a preexisting permanent impairment that could reasonably be due to one of the conditions listed in AS 28.30.205(d)(1), even if the employer cannot precisely identify the specific medical condition. In other words, if the written record shows that an employee had a permanent or chronic condition that could be a hindrance to employment, the written record requirement would be satisfied.... If an employee disclosed that she had "knee problems" and had undergone knee surgery and a laminectomy, the written record would be satisfied, even though the employer did not know the specific reason for the laminecto-my or knee problems. Or if an employee takes sick leave over the years for back problems and this is recorded in the employer's files, the employer shows that it had knowledge of the impairment, even if the employer does not know that the employee had degenerative disk disease.[21]
This passage may seem unexceptional at first glance; a legislature might rationally choose to base Second Injury Fund claims on just such a standard. But this passage is problematic, given the text of the statute and what we have said about the statute.
First, this passage seems to change the analysis required by statute and case law. Our statute requires a qualifying impairing condition and lists specific conditions that qualify.22 It requires the employer to establish by its written records that it "had knowledge of the permanent physical impairment *996before the ... injury and that the employee was retained after the employer acquired that knowledge." 23 Likewise, the statute defines "permanent physical impairment" to mean "any permanent condition" of such seriousness as to hinder obtaining employment or reemployment;24 it also makes it clear that a "condition" is not a "permanent physical impairment" unless it is one of the "following conditions" listed in subsection .205(d)(1).25 The statute therefore requires that the employer have pre-injury knowledge of one of the qualifying conditions, and, per subsection .205(a), that this condition be a cause of or have contributed to the new employment injury. Actual advance knowledge, of course, is not required. Only imputed advance knowledge is required; the imputation is to be made from the employer's written records. If knowledge of a condition listed in the statute-here, arthritis-can be fairly and reasonably inferred from the records, the employer can recover from the fund if that condition causes or contributes to the subsequent injury. Before today, the issue in such a case was whether the written ree-ords could support an inference of an employer's "prior knowledge" of the qualifying condition that causes or contributes to the new injury.26 But the court's opinion asserts that the purpose of the Second Injury Fund "is satisfied if the employer's written record shows a preexisting permanent impairment that could reasonably be due to one of the conditions " listed in the statute.27 This formulation deviates from the substantive standard we adopted in Sea-Land Services, and is not obviously an equivalent paraphrase of that standard. Assuming the opinion's formulation is not intended to change the existing standard, it is not obvious that the two formulations, rigorously applied, will give identical results. If they do not, today's formulation will create confusion and diminish predictability in Second Injury Fund disputes.
Today's formulation may simply be intended to be an explanatory paraphrase of the existing standard. If so, it nonetheless seems to alter how such disputes are to be resolved. It seems to assume that it is sufficient that the records show a "permanent impairment that could reasonably be due" to one of the listed conditions. This formulation misdescribes the required analysis. It implies that it is sufficient that the permanent impairment itself "could reasonably be due" to the qualifying condition. But under the standard we adopted in 1987 the only occasion for taking reasonable inferences is when knowledge about the employee's condition at the time of hire or retention is being imputed to the employer; this inference does not aid the employer in establishing that the qualifying condition caused or contributed to the new injury. Also, subsection .205(d) uses "permanent physical impairment" and "permanent condition" or "condition" as equivalent terms. The statute as written makes it unnecessary to determine whether a permanent impairment "could reasonably be due" to one of the listed conditions.28
Second Injury Fund disputes arising out of records reflecting knee and "back problems"-the examples given by the court's opinion-would be for the board to resolve. Whether a given cireumstance satisfies the statute is highly situational. This implies that it is uniquely for the board to weigh the evidence and determine whether the impairing condition listed in the statute is revealed in the employer's written records. That sort of situational dispute must be resolved on a case-by-case basis. This confirms that the ultimate standard of review (assuming no legal error) must be the substantial evidence standard.
Second, the opinion's use of the phrase "back problem[]"29 as an illustrative exam*997ple seems contrary to what we have said about very general information concerning health conditions. We have said that a "general reference to an '"injury' utterly fails to raise an inference ... [of al preexisting permanent physical impairment." 30 The phrase "back condition" lacks precision and using it as an example suggests that colloquial statements will support (or will be deemed by this court to support) a fair and reasonable inference of a qualifying condition. Because "back problem" is a common expression used to encompass a variety of permanent and non-permanent disabilities, the example used by the opinion potentially encourages Second Injury Fund claims that would not previously have succeeded.
The opinion states that "the term 'back problems' ... is the type of information that an employee is likely to give to his employer" and that "[f an employer is aware of an employee's medical problems and records them in everyday language, that employer still satisfies the written record requirement." 31 The opinion is arguably correct when it states that employees are not likely to provide employers with information that is medically precise or that exactly matches the statute's list of qualifying conditions. But the type of information employers receive and record is not necessarily germane to the board's determination. Again, the written-record requirement can only be satisfied if the board determines that the written record could support an inference of an employer's "prior knowledge" of a qualifying condition that causes or contributes to the new injury.
The court faults the board for "requiring VECO to present evidence that showed unequivocally that VECO knew Huizenga had arthritis rather than simply a permanent impairment. ..."32 This passage can be interpreted several different ways. It is probably intended to say that the board erred by requiring VECO to prove that the records revealed the specific condition of arthritis, ie., that the records named arthritis. But the board imposed no such requirement. And because its decision approvingly summarized past board cases in which the records did not name the specific condition, it is fair to assume the board did not depart from its past practice.
This passage could be interpreted to say that the board erred by requiring VECO to prove that the records revealed a permanent impairment that turned out to be arthritis. But that is what the statute and our past decisions require. And that is what the board did, without error. The board could not have permitted VECO to prove its claim with evidence the records revealed a permanent impairment that was unrelated to arthritis. That would be an incorrect interpretation of what the statute requires.33 It would have been error for the board to have interpreted the statute in that fashion.34
*998Finally, the court's own remand instructions confirm that the board did not err. The court states that the board on remand "must determine whether VECO's knowledge that Huizenga had a permanent physical impairment can fairly and reasonably be inferred from [what Huizenga told VECO]." 35 But as I read the board's decision, that is exactly the issue the board decided. We should therefore affirm.
For these reasons, I respectfully dissent.
APPENDIX A
The Alaska Supreme Court has instructed the Board to only consider whether a fair and reasonable inference can be drawn, and thereby imparted to the employer, from the written records. Based on the above, the Board finds the employer in the instant case is not entitled to SIF reimbursement. The employee, in the instant case, was not informed that he had arthritis until September 2004. This was long after he had submitted hiring and employment documents to the employer. The Board further finds that the employer has not provided written proof that it hired or retained the employee after it had written notice that the employee had a qualifying pre-existing impairment before he was injured on October 15, 2000. The Alaska Supreme Court has determined the employer must show knowledge of a permanent impairment. Alaska International Constructors.1 This case is directly on point as far as the instant case is concerned. The Board finds that the employer's written record that the employee had prior back injuries and surgeries, and nothing more, does not reasonably connote a preexisting arthritic condition and therefore is insufficient as a matter of law to establish the employer's written notice of a pre-existing qualifying disability. Both Drs. Voke and Klimow reached their conclusions regarding the employee's conditions based on their knowledge of the employee's medical records and conditions and not from his Health Questionaires. The employee's written description of "back operation, compression 5 lower vertebrae, Dec. 21, 1987, Dr. Voke" and his written disavowal on the same Health Questionnaire that he had any arthritic condition negates any argument by the employer that the employee's 1996 and 1997 Health Questionnaires put them on written notice that the employee had a qualifying permanent disability of arthritis before he was injured October 15, 2000. The Board finds that the employer has not met its burden of proof by a preponderance of the evi-denee2 with respect to the statutory requirements of AS 28.30.205 by showing knowledge by the employer of the employee's handicapping condition prior to his October 15, 2000 injury. For these reasons, the employer's request for reimbursement under the SIF is denied. Because of the denial based on the employer's lack of knowledge of the employee's condition prior to his October 15, 2000 injury is upheld, this order does not address the other bases for denial addressed in the SIF denial letter of May 18, 2004.

. Op. at 987.

. That is the standard the board applied here. The board first correctly recognized that we have "instructed" the board "to only consider whether a fair and reasonable inference can be drawn, and thereby imparted to the employer, from the written records." The board then permissibly used an equivalent phrase in finding that the written record "does not reasonably connote" the qualifying condition of arthritis. Everyone recognizes that arthritis, one of the specific conditions listed in AS 23.30.205(d)(1), is the only qualifying condition relevant in this case.

. ''The only question, then, is whether Alaska International's prior knowledge of Kinter's qualifying disability can fairly and reasonably be inferred from his resume." Alaska Int'l Construc*993tors v. State, Second Injury Fund, 755 P.2d 1090, 1094 (Alaska 1988).

. Bloom v. Tekton, Inc., 5 P.3d 235, 237 (Alaska 2000) (citing Bockness v. Brown Jug, Inc., 980 P.2d 462, 465 (Alaska 1999); see also Brown v. State Workers' Comp. Bd., 931 P.2d 421, 423 (Alaska 1997) ("[Wle review the Board's factual determination{s] ... according to the 'substantial evidence' test.").

. Because the board must determine whether the employer's written records permit an imputation of pre-injury knowledge of the qualifying condition that is a cause of the present disability, it is significant that the records contained the employee's denial of having had or having been treated for arthritis. In Sea-Land Services, Inc. v. State, Second Injury Fund, we thought it significant that Sea-Land's knowledge of the employee's disability "cannot reasonably be inferred" from a written record that negated any possible inference of the qualifying condition. Sea-Land Servs., Inc. v. State, Second Injury Fund, 737 P.2d 793, 796 (Alaska 1987).

. Op. at 988-89.

. An employee's ignorance of the qualifying condition cannot foreclose the employer's claim. But his ignorance remains relevant to whether the employer's written records permit a fair and reasonable inference of that condition. Evidence that an employee's own physicians have not told him he has a qualifying condition is probative in deciding whether the records can be fairly read to impute knowledge of the condition to the employer. The board's mention of Huizenga's ignorance therefore reveals no legal error that would justify independent review.

. Op. at 988 (emphasis added).

. See AS 23.30.205(c); see also Sea-Land Servs., Inc., 737 P.2d at 795.

. See AS 23.30.110(a) ("[A] claim for compensation may be filed with the board in accordance with its regulations ... and the board may hear and determine all questions in respect to the claim."); see also DeNuptiis v. Unocal Corp., 63 P.3d 272, 277 (Alaska 2003) (noting board has broad powers to administer Alaska Workers' Compensation Act, including authority to formulate policy, interpret statutes, and "conduct its hearings in the manner by which it may best ascertain the rights of the parties." (citing AS 23.30.135(a))).

. See Kessick v. Alyeska Pipeline Serv. Co., 617 P.2d 755, 757 (Alaska 1980) ("[It is not the function of this court to reweigh the evidence but only to determine whether such evidence exists." (citing Laborers & Hod Carriers Union, Local 341 v. Groothuis, 494 P.2d 808, 811-12 (Alaska 1972))); see also AS 23.30.122, which provides:
Credibility of witnesses.
The board has the sole power to determine the credibility of a witness. A finding by the board concerning the weight to be accorded a witness's testimony, including medical testimony and reports, is conclusive even if the evidence is conflicting or susceptible to contrary conclusions. The findings of the board are subject to the same standard of review as a jury's finding in a civil action.

. Sea-Land Servs., Inc. v. State, Second Injury Fund, 737 P.2d 793, 795 (Alaska 1987) (quoting U.S. Pipe & Foundry Co. v. Caraway, 546 S.W.2d 215, 219 (Tenn.1977)).

. Id.

. Id. (citing Leiker v. Manor House, Inc., 203 Kan. 906, 457 P.2d 107, 113-14 (1969)).

. See Op. at 991-92 (stating Alaska International went "too far" because "our opinion stated that [a] resume's reference to an injury failed to raise the inference that Alaska International knew of the employee's arthritis").

. Id. at 989 (quoting 5 Artur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 91.03[3] (2000)).

. The footnotes omitted from the Larson passage quoted by the court state that "(allthough the New York cases on this point are no longer operative since the 1987 deletion of the knowledge requirement, they are retained for whatever value they may have in states still having that requirement." 5 Larson, supra note 16, § 91.03[3]. Because the written-record requirement of AS 23.30.205 implicitly rejects an actual-knowledge requirement, the inoperative New York case law has no relevance in our jurisdiction. See id. § 91.03[5]-{6], D[6] (describing Sea-Land Servs., 737 P.2d at 793, and noting Alaska requires written record).

. Id. § 91.03[3] (emphasis added).

. Id. § 91.03[5].

. Op. at 989-90 (footnotes omitted).

. AS 23.30.205(d).

. 5 Artaur Larson & Lex K. Larson, Larson's Workers' Comprnsation Law § 91.03[3] (2000). Nebraska, for example, provides an actual knowledge exception to the written-record requirement: "[In the case of an obvious injury inevitably leading to undisputed actual knowledge on the part of the employer of the employee's preexisting permanent disability, such as an amputated arm, the written records requirement may be dispensed with." Ashland-Greenwood Pub. Sch. v. Thorell, 15 Neb.App. 114, 723 N.W.2d 506, 513 (2006).

. AS 23.30.205(c) (emphasis added).

. AS 23.30.205(d).

. The only exception is a condition satisfying AS 23.30.205(d)(2). There is no contention that subsection applies here.

. Sea-Land Servs., 737 P.2d at 795.

. Op. at 989 (emphasis added).

. "Our function is not to re-draft the statute, but to enforce it according to its plain meaning." Sea-Land Servs., 737 P.2d at 796 n. 3.

. The court's opinion derives the "back problem[]" example from Denton v. Sunflower Elec. Coop., 12 Kan.App.2d 262, 740 P.2d 98, 103 *997(1987). Op. at 990 n. 34. Because Kansas law allows employers to establish knowledge of an employee's pre-existing impairment through either writter records or actual knowledge, the example is inapt and inapplicable to Alaska's statutory scheme. See Kan. Stat. Ann. § 44-567(b) (2006) ("The employer's knowledge of the preexisting impairment may be established by any evidence sufficient to maintain the employer's burden of proof with regard thereto."); Denton, 740 P.2d at 101-03 (employer's knowledge of employee's injury was established by witness testimony and corroborated by business records).

. Alaska Int'l Constructors v. State, Second Injury Fund, 755 P.2d 1090, 1094 (Alaska 1988) (written record insufficient to support inference of permanent impairment where writing stated "I was injured on the job by a sheet of iron.... My injury has been corrected by surgery and I was released with no restrictions by my doctor to return to work."); see also Sea-Land Servs., 737 P.2d at 795-96.

. Op. at 990.

. Op. at 988.

. Subsection .205(c) requires the written records to show the "employer had knowledge of the permanent impairment...." (Emphasis added.)

. Thus, records revealing a history of past cardiac problems putting an employer on notice of permanent impairment would not satisfy subsection .205(c) if the disabling condition, for example cerebral palsy, was unrelated to the conditions to be inferred from the employer's records. Likewise, records revealing impairment from knee problems would not satisfy the statute if a ruptured intervertebral disc causes the new disability.

. Op. at 992. Stated somewhat more accurately, the question is whether VECO had knowledge of a permanent physical impairment based on fair and reasonable inferences to be drawn from what Huizenga told VECO. The court, in phrasing the remand instruction, no doubt does not mean to assume that VECO indeed had knowledge of a permanent impairment; there was no evidence VECO had that actual knowledge; the entire dispute was and is whether that knowledge is imputable to it from its written records.

. Alaska International Constructors at 1090.

. In the instant dispute, the Alaska Workers' Compensation Act provides no specific standard of review. In the absence of a specific standard, we apply the general "preponderance of the evidence" standard provided by the Alaska Administrative Procedure Act, AS 44.62.460(e). See DeNuptiis v. Unocal Corp., 63 P.3d 272 (Alaska 2003).