Court Opinion

ID: 4366092
Source: CourtListenerOpinion
Date Created: 2019-02-08 18:02:43.372762+00
Date Added: 2024-06-11T14:21:07.786126
License: Public Domain

Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
      Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
      303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
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               THE SUPREME COURT OF THE STATE OF ALASKA

UNISEA, INC. and ALASKA             )
NATIONAL INSURANCE COMPANY, ) Supreme Court Nos. S-16851/16861
                                    )
                Appellants and      ) Alaska Workers’ Compensation
                Cross-Appellees,    ) Appeals Commission No. 16-011
                                    ) (Consolidated)
     v.                             )
                                    ) OPINION
SOFIA MORALES de LOPEZ,             )
                                    ) No. 7333 – February 8, 2019
                Appellee and Cross­ )
                Appellant.          )
                                    )

              Appeal from the Alaska Workers’ Compensation Appeals
              Commission.

              Appearances: Constance E. Livsey, Barlow Anderson LLC,
              Anchorage, for Appellants/Cross-Appellees.      Selena
              Hopkins-Kendall and Eric Croft, The Croft Law Office,
              Anchorage, for Appellee/Cross-Appellant.

              Before: Bolger, Chief Justice, Winfree, Stowers, Maassen,
              and Carney, Justices.

              WINFREE, Justice.

I.    INTRODUCTION
              The primary issue in this workers’ compensation appeal is the answer to
this question: When must an employer pay compensation related to permanent partial
impairment ratings if doctors in different medical specialities provide different dates of
medical stability and separate impairment ratings for injuries to different body systems
arising out of one work-related accident?
               An employer asked medical specialists to evaluate a worker with injuries
to different body systems arising out of one work-related accident. The doctors gave two
separate opinions, almost a year apart, about final medical stability and relevant
permanent impairment ratings in their separate specialities. The employer paid no
compensation based on the impairment ratings until almost three months after the second
impairment rating. The worker asked the Alaska Workers’ Compensation Board to order
a penalty for late payment of impairment-related compensation benefits, but the Board
agreed with the employer that no impairment-related compensation was payable until the
employer obtained a combined impairment rating. The Alaska Workers’ Compensation
Appeals Commission reversed the Board’s decision, concluding that initial impairment-
related compensation was payable upon notice of the first impairment rating and further
impairment-related compensation was payable upon notice of the second impairment
rating.
               The employer appeals.     For the reasons that follow, we affirm the
Commission’s decision.
II.       FACTS AND PROCEEDINGS
          A.   The Claimant’s Injury
               In June 2013 Sofia Morales de Lopez, age 54, was employed by Unisea,
Inc. as a fish sorter at a Dutch Harbor processing plant. While working she fell about 15
feet from a platform onto a concrete floor and suffered several fractures. After
stabilizing in Unalaska, she was medivaced to Anchorage; she received medical
treatment there for a few weeks before returning home to California, where she was in
a rehabilitation facility for several months. In addition to her orthopedic problems, she
developed depression and post-traumatic stress disorder (PTSD) symptoms. Morales’s

                                            -2-                                    7333

treating psychiatrist later diagnosed her with PTSD; Unisea’s psychiatrist thought she
did not meet the full criteria for PTSD.
       B.     Relevant Statutory Sections And Related Workers’ Compensation
              Because this appeal raises issues related to workers’ compensation benefits
paid under several interrelated statutory sections, we describe the statutory framework
here to provide a better understanding of this case’s factual development.
              1.     Temporary total disability compensation
              Temporary total disability (TTD) compensation is payable while a worker
temporarily is totally disabled by a work-related injury; disability is defined as
“incapacity because of injury to earn the wages which the employee was receiving at the
time of injury.”1 A worker’s TTD eligibility ends at the date of medical stability.2
Medical stability is statutorily defined as
              the date after which further objectively measurable
              improvement from the effects of the compensable injury is
              not reasonably expected to result from additional medical
              care or treatment, notwithstanding the possible need for
              additional medical care or the possibility of improvement or
              deterioration resulting from the passage of time.[3]
              2.     Reemployment benefits
              An injured worker also may be eligible for reemployment benefits, as set
out in AS 23.30.041, if a work-related injury results in certain permanent impairments
preventing return to the worker’s prior employment.4 The reemployment process is

       1
              AS 23.30.185, .395(16).
       2
              AS 23.30.185.
       3
              AS 23.30.395(28).
       4
              See Rydwell v. Anchorage Sch. Dist., 864 P.2d 526, 528-29 (Alaska 1993)
                                                                         (continued...)

                                              -3-                                  7333

intended to provide the injured worker training for alternative remunerative
employment.5 If the injured worker is unable to return to the worker’s prior employment
for 90 consecutive days, the Reemployment Benefits Administrator6 is required to
evaluate whether the worker is eligible for reemployment benefits.7 Eligibility requires
a doctor’s prediction that the injured worker will have “permanent physical capacities
that are less than the physical demands” of the worker’s job at the time of injury (as
described in a specific U.S. Department of Labor reference book) or any other job the
worker had in the ten years preceding the injury.8 An injured worker initially found
eligible for reemployment benefits may later be found ineligible if, “at the time of
medical stability, no permanent impairment is identified or expected.”9
             In 2005 the legislature created a new and alternative job dislocation benefit
for injured workers who qualify for reemployment benefits but who do not want to
engage in the reemployment process.10 The job dislocation benefit is a fixed amount

      4
             (...continued)
(holding that injured worker must both be unable to return to former job and have
rateable impairment greater than zero to be eligible for reemployment benefits).
      5
            Arnesen v. Anchorage Refuse, Inc., 925 P.2d 661, 665 (Alaska 1996); see
AS 23.30.041(r)(7) (defining “remunerative employability”).
      6
               AS 23.30.041(a) authorizes the Reemployment Benefits Administrator and
its staff as part of the Division of Workers’ Compensation. AS 23.30.041(a), .395(17).
      7
             AS 23.30.041(c).
      8
              AS 23.30.041(e); see also Vandenberg v. State, Dep’t of Health & Soc.
Servs., 371 P.3d 602, 606-08 (Alaska 2016) (describing reference used to identify jobs).
      9
             AS 23.30.041(f)(4).
      10
             Ch. 10, § 19, FSSLA 2005; Sen. Labor & Commerce Comm., Section by
                                                                 (continued...)

                                           -4-                                      7333

based on the worker’s permanent partial impairment (PPI) rating; the maximum job
dislocation benefit is $13,500.11 Reemployment benefits, in contrast, include formulation
of and payment for an approved reemployment plan12 along with stipend benefits to the
injured worker if other specified benefits, including PPI compensation, end during the
plan’s implementation.13 An injured worker found eligible for reemployment benefits
must select one of the two options — the job dislocation benefit or the reemployment
benefits — within 30 days of the eligibility notification.14
              3.     PPI compensation
              Alaska Statute 23.30.190 authorizes PPI compensation; subsection (a)
provides:
              In case of impairment partial in character but permanent in
              quality, and not resulting in permanent total disability, the
              compensation is $177,000 multiplied by the employee’s
              percentage of permanent impairment of the whole person.
              The percentage of permanent impairment of the whole person
              is the percentage of impairment to the particular body part,
              system, or function converted to the percentage of
              impairment to the whole person as provided under (b) of this
              section. The compensation is payable in a single lump sum,
              except as otherwise provided in AS 23.30.041, but the

       10
              (...continued)
Section Analysis of SB 130 at 9, Alaska Leg. Microfiche Collection No. 11903 (Mar. 3,
2005) (stating that this section “provides a small benefit not previously available to those
employees who genuinely desire to retire from the active labor market or to pursue plans
of their own without direction from the workers’ compensation system”).
       11
              AS 23.30.041(g)(2).
       12
              See AS 23.30.041(h)-(j), (l).
       13
              AS 23.30.041(k).
       14
              AS 23.30.041(g).

                                              -5-                                     7333

             compensation may not be discounted for any present value
             considerations.
             Alaska Statute 23.30.190(b) requires using a specific medical reference, the
American Medical Association Guides to the Evaluation of Permanent Impairment (the
Guides), to calculate compensation: “All determinations of the existence and degree of
permanent impairment shall be made strictly and solely under the whole person
determination as set out in [the Guides], except that an impairment rating may not be
rounded to the next five percent.” Subsection .190(d) requires the Board to update the
Guides as new editions are issued. PPI is not linked to medical stability in the statute.
             The sixth edition of the Guides was adopted by the Board in January
2008.15 The Guides has consistently evaluated different organs and body systems
separately, using medical testing and examination to estimate the extent a particular
organ or body system impairment limits a person’s activities of daily living.16
             An evaluation using the Guides is done when the injured worker reaches
maximum medical improvement (MMI), defined as
             [t]he point at which a condition has stabilized and is unlikely
             to change (improve or worsen) substantially in the next year,
             with or without treatment. While symptoms and signs of the
             condition may wax and wane over time, further overall
             recovery or deterioration is not anticipated. However, both
             the name given to and exact definition of this status vary

      15
               Alaska Workers’ Comp. Div., Bulletin 08-02 (Jan. 15, 2008),
http://labor.state.ak.us/wc/bulletins/08-02.pdf.
      16
              AM.MED.ASS’N,GUIDES TO THE EVALUATION OF PERMANENT IMPAIRMENT
2, 5, 21 (6th ed. 2008) [hereinafter GUIDES 6TH ED.].

                                           -6-                                      7333

             depending on the jurisdiction. Among the numerous
             synonyms for MMI are . . . medical stability . . . .[17]
The Guides’s MMI definition differs from AS 23.30.395’s definition of medical stability
because the MMI definition centers on a condition’s stabilization, not on whether further
medical care would lead to objectively measurable further improvement from “the effects
of the compensable injury.”18 Because a single work-related injury can affect more than
one body system or cause more than one condition, medical stability and MMI may not
always be coextensive. And the MMI definition does not indicate that all separate
conditions need to have stabilized before any single condition can be evaluated using the
Guides.
             A rating of an organ or body system under the Guides generally shows how
the loss affects the whole person, even though ratings are performed on organs or body
systems separately.19 The Guides also provides a method for combining different body
system impairments, set out in both the text and the Combined Values Chart appendix.20
Essentially the greatest impairment value is combined with the next largest remaining
value by looking to where the numbers intersect on a chart.21 “The method of combining

      17
             Id. at 612.
      18
             AS 23.30.395(28).
      19
               GUIDES 6TH ED., supra note 16, at 21 (“The Guides’ impairment ratings
reflect the severity of the organ or body system impairment and the resulting functional
limitations of the whole person.” (emphasis in original)). The Guides has regional
impairment ratings for a few body systems, id., but these ratings are not at issue here.
      20
             Id. at 23, 604-06.
      21
               Id. This method is also used for “[r]elated but separate conditions,” but a
slightly different rating may be needed when “the impairing condition involves several
organ systems.” Id. at 23.

                                           -7-                                      7333

impairments is based on the idea that a second or a succeeding impairment should apply
not to the whole but only to the part that remains after the first and other impairments
have been applied.”22 The Combined Values Chart’s values are derived from a
mathematical formula; using the Chart requires that each organ system’s impairment
“must first be expressed as a whole person impairment percent.”23
             The Guides sets out a three-step rating process consisting of “clinical
evaluation, analysis of the findings, and discussion of how the impairment rating was
calculated.”24 According to the Guides, “[t]he first 2 steps must be performed by a
licensed physician, and if the clinical findings are fully described, any knowledgeable
observer may check the findings against the Guides’[s] criteria.”25 The Guides also
“emphasize[s]” that “nonphysician evaluators may analyze an impairment evaluation to
determine if it was performed in accordance with the Guides.”26
      C.     Morales’s Claim Process And Administrative Proceedings
             The day after Morales’s June 2013 injury, Unisea began paying her TTD
compensation; it continued to do so through early August 2015, when it controverted the
TTD compensation for reasons unrelated to this appeal.
             In October 2013 Unisea initiated the reemployment process paperwork,
notifying the Reemployment Benefits Administrator that Morales had been totally unable

      22
             Id. at 22-23.
      23
             Id. at 604.
      24
             Id. at 28.
      25
             Id.
      26
             Id. at 23.

                                          -8-                                     7333

to return to her employment for 45 consecutive days.27 After Morales remained unable
to return to her work for 90 consecutive days, an eligibility evaluation was ordered in
California. Reemployment Benefits Administrator staff wrote to Morales, with a copy
to Unisea, telling her she was eligible for reemployment benefits and within 30 days she
needed to choose whether to go through the reemployment process or receive a job
dislocation benefit. Morales had not yet been rated for a permanent impairment, and a
rating would have been necessary to calculate the job dislocation benefit.28 Morales
returned the signed and notarized form electing the job dislocation benefit, and Unisea
was served a copy of the form in April 2014. At no time did Unisea contest Morales’s
entitlement to reemployment benefits in general or the job dislocation benefit in
particular.
              In early November 2014 Morales traveled to Seattle for an employer’s
medical evaluation (EME) by a panel of three doctors — a neurologist, an orthopedist,
and a psychiatrist — all working for the same organization. The psychiatrist gave an
opinion that the work injury was the substantial cause of her psychiatric condition, but
he did not think her psychiatric condition was medically stable. The other two doctors
evaluated Morales’s physical condition and determined that her orthopedic problems
caused by the accident were medically stable. Using the Guides, they rated her as having
a 5% whole person permanent impairment. In February 2015, relying on the orthopedic
and neurology EME report, Unisea controverted further medical care for Morales’s neck,
back, and right foot conditions, as well as any related personal-attendant care. The
controversion notice mentioned neither PPI compensation nor the job dislocation benefit.

       27
            See AS 23.30.041(c) (requiring eligibility for reemployment benefits notice
to employee unable to return to original work for 45 consecutive days).
       28
              See AS 23.30.041(g)(2).

                                          -9-                                      7333

Unisea continued paying Morales TTD compensation, now based solely on her
psychiatric condition.
             Morales — representing herself — filed her first workers’ compensation
claim in June 2015, seeking continued medical care and other benefits. Later that month
Unisea filed its first medical summary with the Board, listing the two November 2014
EME reports.29 Unisea answered Morales’s claim, admitting that she was entitled to
continued TTD compensation and psychiatric care but denying that she was entitled to
continued physical medical care. In early August Morales obtained the counsel who
would ultimately represent her before the Board. About the same time, Unisea scheduled
a second psychiatric EME, but Morales did not attend. In September Morales filed a
compensation claim for continued medical costs, continued TTD compensation (which
Unisea had discontinued when Morales did not attend the second psychiatric EME30),
penalties for Unisea’s late payments,31 interest, and attorney’s fees.
             Morales attended a second psychiatric EME in November 2015; the EME
psychiatrist determined her psychiatric condition was medically stable and rated her as
having a resulting 10% impairment. Unisea later communicated with the EME
psychiatrist — although the communication itself is not in the record — seeking
clarification of the November 2015 rating. In a February 8, 2016 addendum the

      29
             A Board regulation requires the parties to file medical summaries only
when they file a petition or claim. 8 Alaska Administrative Code (AAC) 45.052(a)
(2011).
      30
              The reasons for her nonattendance are discussed in the Commission’s
decision, but because this issue is not on appeal we omit discussion of it.
      31
             AS 23.30.155(e)-(f) impose a 25% penalty when an employer fails to pay
compensation promptly; a penalty is not imposed when an employer files a good faith
controversion. See Harris v. M-K Rivers, 325 P.3d 510, 517-18 (Alaska 2014)
(describing penalty and good faith controversion).

                                          -10-                                   7333

psychiatrist explained that the 10% psychiatric impairment was a whole person rating
that, when combined with the 5% orthopedic impairment, would be a 15% whole person
impairment rating. On February 17 Unisea then paid Morales a job dislocation benefit
and PPI compensation based on the 15% permanent impairment rating.
             In March Morales filed a compensation claim for penalty and interest on
the PPI payment. She also sought a Board ruling invalidating her job dislocation benefit
election because of Unisea’s delay in paying her that benefit. Unisea’s controversion
response covered all of Morales’s requests:
             The [employee] signed an Election to Waive Reemployment
             Benefits and Receive a Job Dislocation Benefit Instead form
             on 03/03/14. Payment has been issued. . . . No penalty is
             owed on PPI payments as the [employer] & carrier did not
             have a completed combined whole body rating until the
             report . . . dated February 8, 2016 was provided to the carrier.
             The [employee] was not entitled to receive her job dislocation
             benefit until after she was medically stable & rated for her
             whole body PPI.
             The Board held two hearings and issued three decisions, one on
reconsideration, related to Morales’s claims. No witnesses testified at either hearing.
The first hearing primarily concerned a penalty on Morales’s PPI compensation. Unisea
relied on a Commission decision, Lowe’s HIW, Inc. v. Anderson,32 to argue that it had
timely paid PPI compensation, in part because it had continued to pay TTD
compensation after receiving the orthopedic impairment rating. Morales contended that
Anderson did not apply to her case. She argued that Unisea should have paid her lump-
sum PPI compensation related to the 5% orthopedic impairment rating within weeks of

      32
               AWCAC Dec. No. 130 (Mar. 17, 2010) (deciding that employer cannot be
ordered to pay TTD and PPI concurrently when employee is in reemployment process),
http://labor.state.ak.us/WCcomm/memos-finals/D_130.pdf.

                                          -11-                                    7333

receiving the EME report and should have paid her the remaining 10% PPI compensation
after the November 2015 psychiatric EME report. Unisea maintained that it was justified
in waiting until February 2016, when it received the addendum from its EME psychiatrist
showing the combined whole person impairment rating.
             The Board first decided that no penalty was owed on the PPI compensation
payment. The Board reasoned that PPI compensation should be paid in a single lump
sum and that Unisea did not have “a true ‘whole person’ rating” until the February 2016
addendum from the EME psychiatrist. The Board also reasoned that because TTD
compensation is “not payable after the date of medical stability” and because Morales
was paid TTD compensation from June 24, 2014 through August 7, 2015, Unisea “was
not obligated under the Act to issue [Morales] a PPI benefit concurrently with ongoing
TTD payments.” Morales asked the Board to reconsider its decision; the Board denied
reconsideration.
             The Board’s second hearing considered the job dislocation benefit. Morales
sought a ruling from the Board that Unisea’s delay in paying the job dislocation benefit
made her election invalid, thus freeing her to pursue reemployment benefits.
Alternatively she asked the Board to consider a penalty on the job dislocation benefit.
             The Board decided there had been no undue delay in paying the job
dislocation benefit even though the delay “was unusually long.” The Board thought
delay in paying job dislocation benefits was common “because of the difference between
the statutory requirements for eligibility for reemployment benefits and the calculation
of the amount of the dislocation benefit.” According to the Board’s analysis, job
dislocation benefit payment is dependent on a PPI rating that includes all conditions;
because the Board earlier had decided that Unisea did not have a complete PPI rating
until February 2016, the Board decided the job dislocation benefit was timely paid.

                                         -12-                                      7333

             Morales separately appealed the Board’s decisions to the Commission; the
Commission consolidated the appeals.
             The Commission first considered the job dislocation benefit and decided
that Unisea had not timely paid that benefit. The Commission looked at the language of
AS 23.30.041(g), requiring payment to an employee “who has been given a [PPI] rating
by a physician,” and decided that Unisea was required to pay Morales at least an initial
payment after the first PPI rating by the EME doctors. The Commission indicated its
decision was based in part on Unisea’s failure to controvert, writing, “Perhaps, more
importantly, Unisea never bothered to tell Ms. Morales why it was not paying the
dislocation benefit.”
             The Commission next discussed PPI compensation and decided that Unisea
also had not timely paid that compensation. The Commission considered statutory
language in the Alaska Workers’ Compensation Act, our decisions in Sumner v. Eagle
Nest Hotel33 and Hammer v. City of Fairbanks,34 and information in the Guides. The
Commission decided that nothing in the Guides requires all body systems or organs to
reach MMI at the same time for a final PPI rating. The Commission decided that under
our precedent PPI compensation became due when Unisea received the EME reports
with the impairment ratings. The Commission distinguished its Anderson decision by
interpreting it to apply only to claimants actively engaged in the reemployment process.
Finally, the Commission agreed with the Board that Morales could not rescind or
otherwise avoid the consequence of her election to receive a job dislocation benefit in

      33
             894 P.2d 628, 631 (Alaska 1995) (holding lump-sum PPI due within 21
days of receiving rating).
      34
            953 P.2d 500, 505-06 (Alaska 1998) (holding penalty appropriate when
employer sought rating clarification from doctor but did not controvert payment).

                                         -13-                                     7333

lieu of reemployment benefits and that Unisea was “not estopped from relying on the
Election Waiver by Ms. Morales.”
              Unisea appeals the Commission’s decision about the timeliness of Unisea’s
PPI compensation and job dislocation benefit payments. Morales cross-appeals the
Commission’s decision that she cannot avoid her job dislocation benefit election.
III.	 STANDARD OF REVIEW
              In an appeal from the Commission, we review the Commission’s decision
and not the Board’s.35 “We apply our independent judgment to questions of law that do
not involve agency expertise, including issues of statutory interpretation.”36 “We
interpret a statute ‘according to reason, practicality, and common sense, considering the
meaning of the statute’s language, its legislative history, and its purpose.’ ”37
IV.	   DISCUSSION
       A.	    The Commission Correctly Decided That A Penalty Was Due On Both
              The Job Dislocation Benefit And PPI Compensation.
              In Harris v. M-K Rivers we observed that the Act “sets up a system in
which payments are made without need of Board intervention unless a dispute arises.”38
An employer is required to pay compensation when it is “due” unless the employer
disputes payment, in which case it must file a controversion.39 If the employer fails to

       35	
              Alaska Airlines, Inc. v. Darrow, 403 P.3d 1116, 1121 (Alaska 2017).
       36
            Vandenberg v. State, Dep’t of Health & Soc. Servs., 371 P.3d 602, 606
(Alaska 2016).
       37
              Id. (quoting Louie v. BP Expl. (Alaska), Inc., 327 P.3d 204, 206 (Alaska
2014)).
       38
              325 P.3d 510, 518 (Alaska 2014).
       39
              AS 23.30.155(a), (d).

                                           -14-	                                    7333

timely pay compensation, it may be subject to a penalty,40 but an employer who files a
good-faith controversion is protected from a penalty.41 We agree with the Commission
that a penalty was appropriate in this case under our previous Sumner and Hammer
decisions.
              Not long after the legislature changed the Act’s benefit structure from
permanent partial disability to permanent partial impairment, we were required in
Sumner to decide when a lump-sum PPI compensation payment was “due” for
determining whether a penalty should be imposed.42 We agreed with the Board in that
case that a PPI compensation payment was “due” within 21 days of the date an employer
received notice of a PPI rating.43 In Hammer we later affirmed the Board’s imposition
of a penalty when the employer delayed paying all PPI compensation while it sought
clarification of a rating instead of paying the uncontested PPI compensation and
controverting the remainder within 21 days of receiving notice of the initial rating.44
              Unisea justifies its delay in paying Morales anything until February 2016
by arguing that TTD and PPI compensation cannot be paid concurrently and that a job
dislocation benefit is not payable until a final PPI rating. But even if Unisea were correct
that TTD and PPI compensation never can be paid concurrently, a penalty nonetheless
would be appropriate. Unisea controverted and stopped paying TTD compensation in
August 2015, and the Board’s later order required Unisea to pay TTD compensation only

       40
              AS 23.30.155(e)-(f).
       41
              Harp v. ARCO Alaska, Inc., 831 P.2d 352, 358 (Alaska 1992).
       42
              Sumner v. Eagle Nest Hotel, 894 P.2d 628, 631 (Alaska 1995).
       43
              Id.
       44
              Hammer v. City of Fairbanks, 953 P.2d 500, 505-06 (Alaska 1998).

                                           -15-                                       7333

through November 13, 2015, the date of the second psychiatric EME. If Unisea had,
consistent with Hammer, promptly paid whatever part of the PPI compensation it did not
contest after receiving the November 2015 EME and controverted the remaining PPI
compensation, it would not have paid PPI and TTD compensation concurrently.
              Unisea also justifies its delay in paying PPI compensation and the job
dislocation benefit by arguing that Morales “did not have a true, final, whole person PPI
rating” until February 2016. But we faced a similar issue in Hammer and approved
imposition of a penalty because the employer had knowledge of “the injury resulting in
the PPI not later than receipt of the [initial] PPI rating.”45 We said, “To conclude
otherwise would permit an employer to conduct an investigation of the PPI rating
without controverting, thus thwarting the policy of the Act — to promote prompt
payment by the employer to the injured employee.”46
              The facts here are analogous. Unisea’s more than two-month delay in
getting clarification of the PPI rating from its own doctors is unexplained. Unisea did
not contest that Morales was entitled to the job dislocation benefit she elected in 2013
or to PPI compensation. As the Commission correctly observed, Unisea was aware as
early as November 2014 that it would need to pay Morales at least a $5,000 job
dislocation benefit in addition to PPI compensation. Using Unisea’s reasoning — that
it did not have to pay or controvert until it got from its own doctors an additional rating
or clarification about what those doctors’ ratings meant — there is no limit on the
amount of time an employer can delay until a payment is due after an initial rating. If
Unisea could not get clarification from its doctors within the 21 days following the
November 2015 EME, it could have paid Morales the uncontested part of the PPI

       45
              Id. at 505.
       46
              Id. at 505-06.

                                           -16­                                      7333
compensation and job dislocation benefits and filed a controversion of anything
remaining.47 Because Unisea paid Morales nothing within 21 days of either EME report
and filed no controversion contesting the ratings, the Commission correctly determined
Unisea owed Morales a penalty on the PPI compensation and job dislocation benefit.
      B.	    The Commission Did Not Err In Determining That Unisea Should
             Have Paid The Job Dislocation Benefit Related To The Orthopedic
             Rating When It Got That Rating.
             Because Morales is entitled to interest on compensation that was not timely
paid,48 we next consider whether the job dislocation benefit should have been paid in part
in 2014, when Unisea’s orthopedist and neurologist rated Morales as having a 5% whole
person impairment due to her lumbar condition, with the remainder paid after her
psychiatric condition was rated.
             The Commission decided Unisea was obligated to pay at least $5,000 to
Morales as a job dislocation benefit in November 2014 after it received the EME
orthopedic PPI rating.49 Unisea contends it had no obligation to pay or controvert the job
dislocation benefit until February 2016, after its psychiatrist provided the addendum to
his report, because Morales “did not have a true, final, whole person PPI rating” until
then. Morales responds that a job dislocation benefit corresponding to a 5% whole
person impairment was due in November 2014 because she met the statutory
requirements and Unisea knew then that it would owe at least $5,000 in job dislocation
benefits, with additional benefits payable later “[i]f and when a higher PPI rating was
assessed.”

      47
             See id. at 506-07.
      48
             Land & Marine Rental Co. v. Rawls, 686 P.2d 1187, 1192 (Alaska 1984).
      49
            Under AS 23.30.041(g)(2)(A), a job dislocation benefit is $5,000 “if the
employee’s [PPI] rating is greater than zero and less than 15 percent.”

                                          -17-	                                     7333

              Alaska Statute 23.30.041(g)(2) provides that “an employee who elects to
accept a job dislocation benefit in place of reemployment benefits and who has been
given a [PPI] rating by a physician shall be paid” a sum of money depending on the
employee’s PPI. The statute thus requires payment when two conditions are met: the
employee has elected a job dislocation benefit and “has been given a [PPI] rating by a
physician.”50 As the Commission observed, the language in AS 23.30.041(g)(2) does not
indicate the rating must be a final, combined rating because the subsection uses the
indefinite article to indicate when a person qualifies for payment. Morales met both
statutory conditions in November 2014, after Unisea’s EME doctors had given her a PPI
rating for her orthopedic condition. Her job dislocation benefit corresponding to that
rating was due at that point, and Unisea needed to pay the benefit or, if Unisea disputed
its liability, controvert the benefit.51
              Unisea has suggested that a valid PPI rating cannot be done before reaching
medical stability as defined in AS 23.30.395, but at oral argument before us Unisea
agreed that the Act does not specify when PPI is to be rated and acknowledged that in
cases involving multiple body systems, different systems may reach MMI at different
times. Using the Guides, an injured worker may at different times get valid PPI ratings
as different systems reach MMI. Unisea contended at oral argument that requiring it to
pay the job dislocation benefit corresponding to the orthopedic impairment before
Morales had been rated for the psychiatric condition put it at risk of paying $10,000 —
$5,000 for the 5% orthopedic impairment and $5,000 for the 10% psychiatric impairment
— rather than the $8,000 it would be required to pay for the combined rating. Morales

       50
              AS 23.30.041(g)(2) (emphasis added).
       51
              See AS 23.30.155(a).

                                           -18­                                    7333
responded that she sought only $8,000, with $5,000 payable after the orthopedic rating
and an additional $3,000 payable after the psychiatric rating.
              Construing AS 23.30.041(g)(2) together with the Guides shows that
Unisea’s concern is unfounded. Alaska Statute 23.30.041(g)(2) sets out three payment
levels for the job dislocation benefit; each level corresponds to a range of impairment
values. The total job dislocation benefit is tied to “the employee’s [PPI] rating,”
indicating that the total due depends on the total impairment rating.52 Because
AS 23.30.190(b) provides that “[a]ll determinations of the existence and degree of
permanent impairment shall be made strictly and solely under” the Guides,53 the
orthopedic EME using the Guides and assessing a 5% PPI rating met the statutory
conditions for payment. The Guides requires that all subsequent impairment ratings be
combined when calculating total impairment and can never exceed 100%.54 The final
combined rating “is always equal to or less than the collective sum of all the impairment
values taken individually.”55 Consistent with the Guides’s formulation, the total job
dislocation benefit should correspond to the total, final rating, meaning that an employer
is not at risk of paying extra when it pays the job dislocation benefit as the employee is
rated.
              Requiring an employer to pay that part of the job dislocation benefit
corresponding to the first of what may be several ratings is consistent with Hammer,
where we held the employer needed to timely pay any benefit it agreed was due and

         52
              AS 23.30.041(g)(2)(A)-(C).
         53
             It is undisputed that a PPI rating for purposes of AS 23.30.041(g) is
evaluated the same way.
         54
              GUIDES 6TH ED., supra note 16, at 21-23.
         55
              Id. at 23.

                                          -19-                                      7333

controvert any remaining benefit.56 Because Morales had elected the job dislocation
benefit in 2013, Unisea was required to pay the job dislocation benefit corresponding to
her orthopedic impairment rating in November 2014, and it was required to pay any
remaining job dislocation benefit after receiving the psychiatric EME rating.
       C.	    The Commission Correctly Determined That PPI Compensation
              Should Have Been Paid Or Controverted After Each EME Rating.
              As with the job dislocation benefit, Morales is entitled to interest on any
PPI compensation not timely paid.57 Unisea’s chief argument is that the Commission’s
decision about part of the PPI compensation being “due” within 21 days of the first EME
is contrary to the Act because the Act follows what Larson’s treatise describes as “a four-
way classification of disabilities,”58 meaning temporary and permanent benefits should
be paid “sequentially and separated by a physician’s declaration of medical stability.”
Unisea maintains that instructions in the Guides “preclude a rating prior to a
determination of medical stability (or MMI)” and that a rating using the Guides was
“appropriate” only at medical stability. Unisea argues that MMI and medical stability
“are in fact the same concept.” In Morales’s view, MMI and medical stability are distinct
but related concepts, with MMI tied to a condition and medical stability related to all of
a compensable injury’s effects; those effects could include many conditions. She
maintains that because different conditions may stabilize at different rates, a condition
may be at MMI before a worker is medically stable as defined in the statute. At oral
argument before us, Unisea agreed that conditions may reach MMI and be validly rated

       56
              Hammer v. City of Fairbanks, 953 P.2d 500, 505-06 (Alaska 1998).
       57
              Land & Marine Rental Co. v. Rawls, 686 P.2d 1187, 1192 (Alaska 1984).
       58
             6 ARTHUR LARSON ET        AL.,   LARSON’S WORKERS’ COMPENSATION LAW
§ 80.03[1] (2018).

                                           -20-	                                     7333

at different times, but it contended that PPI compensation needs to be paid only after all
conditions are rated and a combined impairment calculated under the Guides.
              Alaska Statute 23.30.190 is silent about the timing for both rating of and
payment for a permanent impairment.59 It does not indicate that PPI is tied to medical
stability as defined in the Act for purposes of either rating or payment. Alaska
Statute 23.30.190(a) requires payment of PPI compensation “in a single lump sum,
except as otherwise provided in AS 23.30.041,” but it does not indicate that PPI
compensation is payable only after medical stability or only after TTD compensation
ends. Alaska Statute 23.30.190(b) provides that “[a]ll determinations of the existence
and degree of permanent impairment shall be made strictly and solely” under the Guides.
The Guides permits jurisdictions to define MMI differently than the Guides,60 but the
legislature did not direct that an injured worker be evaluated for a permanent impairment
at medical stability. Instead the legislature required that ratings be done “strictly and
solely” under the Guides.61
              The Guides allows rating at MMI, which is defined in terms of a condition,
not in terms of an individual or in reference to all effects of an injury.62 Because of the
way the Guides is structured, with different body systems rated independently of each

       59
             See Sumner v. Eagle Nest Hotel, 894 P.2d 628, 631 (Alaska 1995)
(observing that “no statutory time frame is clearly specified” for payment of PPI).
       60
             GUIDES 6TH ED., supra note 16, at 612 (recognizing that “the name given
to and exact definition of [MMI] vary depending on the jurisdiction”).
       61
              AS 23.30.190(b).
       62
              See GUIDES 6TH ED., supra note 16, at 20 (allowing rating only after MMI);
id. at 612 (defining MMI). We agree with Morales that medical stability as currently
defined in AS 23.30.395(28) is different from the MMI definition in the Guides. As a
result, we use the term MMI to discuss the timing of PPI ratings.

                                           -21-                                      7333

other, medical conditions may reach MMI at different times, as Morales’s two injury-
related conditions did in this case. We have found no specific requirement in the current
edition of the Guides that all conditions be at MMI before any condition can be rated.
Unisea’s doctors obviously interpreted the Guides to permit ratings as each condition
reached MMI: the orthopedist and neurologist rated Morales’s orthopedic condition the
day after the psychiatrist said Morales was not medically stable to rate the psychiatric
condition. The psychiatrist did not question the orthopedic rating’s validity when Unisea
later communicated to him that in November 2014 Morales had been “given a 5% whole
person rating for her lumbar spine.”
             Unisea argues that AS 23.30.190(a), requiring conversion of the
“percentage of impairment to the particular body part, system, or function” to the
“percentage of impairment to the whole person” as provided in the Guides, mandates
only one payment, made after all body systems or organs are medically stable. But
nothing in the record here suggests that either EME rating was anything but a whole
person impairment rating. As set out earlier, the Guides provides for regional ratings of
some body systems; depending on the jurisdiction’s law, the regional ratings then are
converted into a whole person impairment rating.63 And the Guides states that its
“impairment ratings reflect the severity of the organ or body system impairment and the
resulting functional limitations of the whole person.”64 We interpret the statutory
language as addressing the question of regional ratings, not as directing only one PPI
compensation payment when several body systems reach MMI at different times.
             Although Unisea looks to Larson’s treatise’s disability payment
classifications for support, Larson’s indicates that some jurisdictions have adopted what

      63
             GUIDES 6TH ED., supra note 16, at 21.
      64
             Id. (emphasis in original).

                                           -22­                                    7333
it calls a “physical-impairment theory” that does not consider wage-earning capacity in
awarding permanent partial benefits.65 The Act awards PPI compensation without
consideration of the worker’s earning capacity and appears to follow that theory.66 We
considered the 1988 Act amendments, changing the compensation from permanent
partial disability to permanent partial impairment, in Alaska Airlines, Inc. v. Darrow.67
Although in Darrow we looked at AS 23.30.190’s interaction with a different part of the
Act, we nonetheless considered section .190’s meaning and discussed testimony before
the 1988 legislature explaining some differences related to compensation for impairment
rather than disability.68 We observed that “compensation for impairment is awarded
independent of earning capacity and for a different type of loss than . . . permanent
disability compensation.”69    The same can be said of TTD compensation; TTD
compensation is explicitly tied to earning capacity,70 but PPI compensation is not.71 A

      65
             LARSON, supra note 58, at § 80.05[7].
      66
             See AS 23.30.190 (tying PPI compensation to degree of impairment rated
under Guides); see also GUIDES 6TH ED., supra note 16, at 5-6 (distinguishing between
impairment and disablement and indicating that an “impairment rating is one of several
determinants of disablement”).
      67
             403 P.3d 1116 (Alaska 2017).
      68
             Id. at 1128-30.
      69
             Id. at 1130.
      70
              AS 23.30.185 (requiring payment “[i]n case of disability total in character
but temporary in quality”); AS 23.30.395(16) (defining disability in terms of wage-
earning ability).
      71
            AS 23.30.190(a) (setting out PPI formula based on multiplying percent of
impairment by a fixed amount).

                                          -23-                                     7333

worker disabled from working may have no rateable PPI.72 Because PPI and TTD are
compensation for different types of loss and because the legislature did not tie PPI rating
or compensation to medical stability, nothing distinguishes the date PPI was “due” here
from our earlier Hammer and Sumner decisions. Unisea was required to pay or
controvert PPI compensation within 21 days of the November 2014 EME report for the
physical condition and within 21 days of the November 2015 report for the psychiatric
condition.
               There is no indication in the record that Unisea contested its doctors’ 5%
whole person impairment rating for Morales’s physical condition, and because Morales
was not at MMI for the psychiatric condition in November 2014, Unisea could not then
know whether she would have an impairment related to her psychiatric condition. The
Act sets up a system under which compensation is to be paid “promptly, and directly to
the person entitled to it, without an award, except where liability to pay compensation
is controverted by the employer.”73 Unisea has never contested its liability for PPI
compensation corresponding to the physical rating, yet it neither controverted nor paid
anything related to the physical condition within 21 days of its knowledge of the PPI
rating.
               Unisea has relied in this litigation on the Commission’s decision in
Anderson, contending that it was justified in not paying PPI related to the physical
condition within 21 days of notice of that rating because the Commission said in
Anderson that until an injured worker “has received a true ‘whole person’ rating of . . .

          72
            See Rydwell v. Anchorage Sch. Dist., 864 P.2d 526, 529-30 (Alaska 1993)
(holding worker who was unable to return to former work was not eligible for
reemployment benefits because she had 0% impairment rating).
          73
               AS 23.30.155(a) (emphasis added).

                                           -24-                                      7333

permanent partial impairment, the single lump sum of PPI is not payable.”74 The
Commission distinguished Anderson because the claimant in Anderson elected to receive
reemployment benefits rather than a job dislocation benefit. We agree with the
Commission that Anderson can be distinguished from Morales’s case.             Alaska
Statute 23.30.190(a) explicitly references AS 23.30.041 as changing the timing and
method of PPI compensation.75 Additionally, Anderson predated our Darrow decision,
and Darrow’s interpretation of the Act undercuts the Anderson reasoning relied on by
Unisea.76
             Finally, we reject Unisea’s argument that because AS 23.30.190(a) says PPI
“compensation is payable in a single lump sum, except as otherwise provided in
AS 23.30.041,” the PPI compensation here could not have been “due” until Unisea had
its psychiatrist’s combined rating in February 2016. Under AS 23.30.155(a), the general
section about compensation payment, compensation is payable “periodically.” The
provision requiring payment of PPI compensation in a single lump sum distinguishes PPI

      74
              Lowe’s HIW, Inc. v. Anderson, AWCAC Dec. No. 130 at 11 (Mar. 17,
2010), http://labor.state.ak.us/WCcomm/memos-finals/D_130.pdf.
      75
              See AS 23.30.190(a) (“The [PPI] compensation is payable in a single lump
sum, except as otherwise provided in AS 23.30.041 . . . .”). AS 23.30.041(k) requires
that PPI compensation be paid at the TTD rate during the reemployment process, with
any remaining PPI benefit paid as a lump sum “upon completion or termination” of the
reemployment plan; subsection .041(k) also provides for suspension of stipend benefits
if PPI benefits have been paid in a lump sum “before the employee requested or was
found eligible for reemployment benefits.”
      76
               Compare Alaska Airlines, Inc. v. Darrow, 403 P.3d 1116, 1128-31 (Alaska
2017) (discussing differences between disability and impairment and holding that
AS 23.30.180(a) permits offset for permanent partial disability but not PPI after
employee became permanently totally disabled), with Anderson, AWCAC Dec. No. 130
at 12 (citing potential reduction of permanent total disability by amount of PPI as
justification for decision that PPI should not be paid “based on piecemeal ratings”).

                                         -25-                                    7333

compensation from other compensation and underscores that PPI compensation is
different — paid for impairment rather than disability.77 As discussed above,78 in Sumner
and Hammer we decided when PPI compensation was “due.” Unisea offers no
persuasive argument that PPI compensation here was due at a different time.
             Unisea had notice of its doctors’ rating of Morales’s physical impairment
in November 2014; payment for that impairment was due within 21 days,
notwithstanding Morales’s continued receipt of TTD compensation for her psychiatric
condition. Similarly, payment for the second impairment rating was due within 21 days
of November 13, 2015, the date of the second EME report. If, after the second EME
rating, Unisea needed clarification from its psychiatrist about the second rating or about
the combined rating, Unisea was required under Hammer to pay whatever part of the PPI
rating it did not contest and to controvert the remainder.
      D.	    The Commission Did Not Err By Refusing To Apply Equitable
             Principles To Invalidate The Job Dislocation Benefit Selection.
             Morales’s cross-appeal asks us to decide whether equitable principles can
be used to rescind a job dislocation benefit selection. She compares her election of the
job dislocation benefit to a partial settlement and further analogizes it to contract
formation. She argues that the long delay in payment of any benefit deprived her of her
bargain such that the “contract” should be set aside. She sets out several equitable
doctrines that she contends permit her to avoid her job dislocation benefit selection.
Unisea counters that the benefit selection represented unilateral action by Morales, not
a contract, and that the benefit selection is effective upon service of the signed and

      77
            See Darrow, 403 P.3d at 1126-28 (discussing differences between disability
and impairment). Disability is tied to wage loss and inability to work, but impairment
is not. Id.
      78
             See supra notes 42-46 and accompanying text.

                                          -26-	                                     7333

notarized form on the Division. Unisea argues that the Commission correctly determined
estoppel should not apply against Unisea to void the job dislocation selection.
             We are not persuaded that Morales’s job dislocation benefit selection is
analogous to a contract or partial settlement. The job dislocation benefit is a workers’
compensation benefit under the Act just like TTD or PPI compensation, not something
she bargained for with Unisea. There also is no indication that Unisea in any way was
involved in her selection of a job dislocation benefit.79         Unisea initiated the
reemployment eligibility determination by filing a notice that Morales had not worked
for 45 consecutive days, but this appears to be the extent of its involvement in the
reemployment process. The Reemployment Benefits Administrator supplied Morales the
information about the job dislocation benefit, and she returned the form while she was
still receiving both TTD compensation and full medical benefits. Equitable principles
may apply against the government,80 but Morales does not seek relief against the State,
even though it provided her the information and forms related to the benefits.
             The Commission did not explicitly say that equitable principles can never
apply when an employee seeks to rescind a job dislocation benefit selection, writing that
“Unisea is not estopped from relying on the Election Waiver.” It evidently considered
equitable estoppel and implied waiver, but it did not find them applicable. But Morales

      79
             We have recognized the applicability of equitable principles in workers’
compensation cases when allegations of fraud or material misrepresentation are present
— see Seybert v. Cominco Alaska Expl., 182 P.3d 1079, 1093-97 (Alaska 2008)
(material misrepresentation); Blanas v. Brower Co., 938 P.2d 1056, 1060-63 (Alaska
1997) (fraud) — but Morales suggests nothing more than delay in payment.
      80
             See Crum v. Stalnaker, 936 P.2d 1254, 1257-58 (Alaska 1997) (applying
estoppel against agency and requiring it to accept late application).

                                          -27-                                     7333

does not identify any assertion Unisea made81 and so cannot explain how equitable
estoppel should apply here. Ultimately, Unisea’s assertion that it could justifiably delay
payment until February 2016 was rejected by the Commission in a legal proceeding, and
the Commission determined Morales was entitled to a statutory penalty, the legal remedy
provided in the Act for late payment. This was the appropriate resolution of the matter.
V.    CONCLUSION
             We AFFIRM the Commission’s decision.

      81
             The first element of equitable estoppel is assertion by words or conduct.
Schmidt v. Beeson Plumbing & Heating, Inc., 869 P.2d 1170, 1175 n.7 (Alaska 1994).

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