Bortolotti v. Universal Terrazzo & Tile Co.

• Decision Date: 05 February 2019
• Docket Number: No. A-17-1024.,A-17-1024.
• Parties: TERRY BORTOLOTTI, APPELLEE AND CROSS-APPELLANT, v. UNIVERSAL TERRAZZO AND TILE COMPANY AND ACUITY INSURANCE COMPANY, APPELLANTS AND CROSS-APPELLEES, AND COLUMBIA INSURANCE GROUP, APPELLEE.
• Court: Nebraska Court of Appeals

TERRY BORTOLOTTI, APPELLEE AND CROSS-APPELLANT, v. UNIVERSAL TERRAZZO AND TILE COMPANY AND ACUITY INSURANCE COMPANY, APPELLANTSAND CROSS-APPELLEES, AND COLUMBIA INSURANCE GROUP, APPELLEE.

No. A-17-1024.

NEBRASKA COURT OF APPEALS

February 5, 2019

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

(Memorandum Web Opinion)

NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

Appeal from the Workers' Compensation Court: JULIE A. MARTIN, Judge. Affirmed as modified.

John W. Iliff and Adam J. Wachal, of Gross & Welch, P.C., L.L.O., for appellants.

John F. Thomas and Jay D. Koehn, of McGrath, North, Mullin & Kratz, P.C., L.L.O., for appellee Terry Bortolotti.

MOORE, Chief Judge, and BISHOP and ARTERBURN, Judges.

MOORE, Chief Judge.

I. INTRODUCTION

Universal Terrazzo and Tile Company (Universal) and Acuity Insurance Company (Acuity) appeal from the order of the Nebraska Workers' Compensation Court awarding benefits to Terry Bortolotti. Universal and Acuity assign that the compensation court erred in calculating Bortolotti's average weekly wage, overruling objections to Bortolotti's exhibits, awarding future medical benefits, and calculating past medical expenses. On cross-appeal, Bortolotti assigns the compensation court erred in declining to rely on several exhibits while calculating past medical benefits and in calculating past medical expenses. For the reasons set forth below, we affirm the compensation court's order as modified.

II. BACKGROUND

Bortolotti has worked for Universal--a business that fabricates and installs tile, terrazzo, and granite--for most of his life. In 2011, Bortolotti became Universal's sole stockholder and president, which required him to manage the company's thirteen employees. Universal changed worker's compensation insurance providers while Bortolotti was president from Columbia Insurance Group (Columbia) to Acuity. Bortolotti suffered a prior injury to his right shoulder during his employment with Universal for which he had surgery in October 2011. He pursued a workers' compensation claim for this injury and reached a settlement with Columbia.

During the present litigation Bortolotti filed several petitions alleging that he sustained injuries in the course and scope of his employment with Universal. On June 26, 2015, he filed a petition alleging that he suffered injuries on November 23, 2009, to his "head, back, arms, and mental." On July 24, he filed another petition alleging he suffered injuries on June 1, 2010, again to his "head, back, arms, and mental." In both of these petitions, Bortolotti claimed to receive "salary or wages, or other earnings [from Universal] of approximately $1,300 per week." Universal and Columbia's answer to Bortolotti's June 26 petition admitted that Bortolotti's "applicable average weekly wage . . . was $1,300.00 per week." Universal and Columbia's answer to the July 24 petition denied Borlotti's wage allegation.

On March 2, 2016, Bortolotti filed an amended petition, which alleged various injuries in 2009, 2010, and 2011, as well as a left-shoulder cumulative trauma injury sustained on June 14, 2013 and a repetitive trauma injury to his left wrist sustained on July 8, 2013. The amended petition alleged that he was earning $1,399.45 per week at the time of the 2013 injuries. Columbia was the workers compensation insurance provider for the injuries alleged in 2009, 2010, and 2011, and Acuity was the insurer at the time of the 2013 alleged injuries. Universal filed a motion to bifurcate the various injuries alleged in the amended complaint into two separately docketed cases. On April 7, the court granted Universal's motion, bifurcating Bortolotti's claims against Columbia and Acuity into two separately docketed cases.

On November 18, 2016, Bortolotti filed his third amended petition (the operative petition), again alleging various prior injuries, as well as the left-shoulder cumulative trauma injury sustained on June 14, 2013, at which time Bortolotti alleged that he earned $3,625 per week. Universal and Acuity's answer to the operative petition denied Bortolotti's wage allegation and left-shoulder injury. From this point forward, we collectively refer to Universal and Acuity as "Universal." Because the trial and this appeal relate only to the left-shoulder injury, we need not discuss the other injuries alleged by Bortolotti in his various petitions.

The compensation court held a trial on Bortolotti's left-shoulder injury claims on June 7, 2017. Bortolotti testified that, for 30 years, his employment with Universal required significant physical activity. He made terrazzo tile, which required him to lift 40 or 50 pound buckets of sand, 94 pound bags of cement, and 100 pound bags of marble chips into a mixer. He used a handheld saw to cut pieces of granite and marble, and he lifted finished pieces of material while storing or installing them. Bortolotti testified in his deposition that since 2007, medical restrictions from his right-shoulder injury required him to refrain from lifting above his waist when he assisted with installations, so he supervised. After becoming Universal's sole shareholder and president in 2011,Bortolotti spent 60 percent of his time doing office and managerial work as opposed to physical labor.

Bortolotti first saw Dr. Richard Murphy, the orthopedic surgeon who performed his right shoulder surgery, about his left-shoulder injury on June 14, 2013. Dr. Murphy found and treated a tear in Bortolotti's left rotator cuff. Believing it to be the workers' compensation insurance provider responsible for the left-shoulder injury, Bortolotti sent the expenses for the left-shoulder treatments to Columbia, which initially paid them. Columbia stopped paying for those treatments, however, after a May 2015 defense medical examination. Bortolotti thereafter submitted bills for his left-shoulder treatments to his health insurance provider. As a result, he personally made the coinsurance payments required under his health insurance policy. Dr. Murphy operated on Bortolotti's left shoulder in December 2015. Bortolotti testified that after the surgery his left shoulder remained tender and was sore quite often.

Bortolotti testified that he paid $9,849.38 out-of-pocket, his health insurer paid $18,969, and Columbia paid $1,646 for the medical expenses related to his left shoulder.

Bortolotti offered as exhibits medical records from various doctors regarding his left-shoulder injury. Bortolotti offered an invoice from Omaha Orthopedic Clinic and Sports Medicine (Omaha Orthopedic) as exhibit 36 and payment records from Columbia and Bortolotti's health insurance provider as exhibits 37 and 40 respectively. Bortolotti offered exhibit 41, which is a document he prepared that summarized the medical expenses for treating his left shoulder and which notes whether the expenses were paid by Columbia, his health insurance provider, or himself. He also offered exhibit 39, which is a letter from Dr. Murphy. In the letter, Dr. Murphy assessed Bortolotti's upper left extremity to have a 15-percent impairment because of its repetitive use in his employment as a "marble granite fabricator." The letter explained that Bortolotti will require future imaging scans for his left-shoulder injury: "At the time of the most recent evaluation on September 15, 2016, because of patient's [sic] shoulder pain, I advised repeat MRI scans to determine if any further treatment would be beneficial for his residual shoulder pain." Universal objected to exhibits 36, 39, and 40, and the court reserved its ruling on Universal's objections. The court received the balance of the exhibits.

Bortolotti testified in his deposition that he did not receive a salary while he was Universal's sole shareholder and president. Universal offered a one-page Schedule E from Bortolotti's 2013 tax return, which is titled "Income from Passthrough Statement" and notes that Universal is an "S Corporation." This document shows "Interest Income" of $535, "Self-employment earnings(loss)/Wages" of $3,950, "Medical insurance - 1040" of $11,339, and "Qualified production activities income" of $186,783. Universal also offered a "payroll journal," showing "debit" payments to Terry Bortolotti during 2013 totaling $3,950. Bortolotti denied that the payroll journal was an accurate reflection of his income from Universal on June 13, 2013. Bortolotti admitted that he and his wife recorded wages earned of $12,000 in 2013 on the Form 1040 they submitted to the IRS, and he explained that those earnings were his wife's wages from her employment at Universal. The Form 1040 is not included in the record.

Bortolotti's attorney asked him the following question about his 2013 tax return: "[U]nder Item 17, it shows rental real estate, royalties, partnerships, S Corporations, trusts, attached Schedule E. And that number is 198,873. Is that the income that the corporation would havereceived from the work for 2013?" Bortolotti answered "Yes." Bortolotti then testified that he took a weekly draw from that $198,873 in the amount of $3,625 in 2013. Our record does not contain the portion of Bortolotti's 2013 tax return that shows "Item 17" income of $198,873.

At the conclusion of the trial, Bortolotti requested that the court take judicial notice of several of the pleadings, which the court marked as exhibits and were made part of the record: the June 26, 2015 and July 24, 2015 petitions, the July 16, 2015 and August 11, 2015 answers of Universal and Columbia, and the March 2, 2016 amended petition.

On August 25, 2017, the compensation court entered an order, finding Bortolotti sustained a compensable injury to his left shoulder and awarding benefits to him. The court overruled Universal's objections to exhibits 36, 39, and 40 in the order. The court awarded Bortolotti $10,589 for past medical expenses, which included $9,528 from Omaha Orthopedic Clinic and $1,061 from two...