Cadiz v. QSI, Inc.

• Decision Date: 30 June 2020
• Docket Number: SCWC-14-0000594
• Parties: Jay D. CADIZ, Petitioner/Claimant-Appellant, v. QSI, INC., Respondent/Employer-Appellee, and First Insurance Company of Hawai‘i, Ltd., Respondent/Insurance Carrier-Appellee.
• Court: Hawaii Supreme Court

468 P.3d 110

Jay D. CADIZ, Petitioner/Claimant-Appellant,

v. QSI, INC., Respondent/Employer-Appellee,andFirst Insurance Company of Hawai‘i, Ltd., Respondent/Insurance Carrier-Appellee.

SCWC-14-0000594

Supreme Court of Hawai‘i.

JUNE 30, 2020

Stanford H. Masui, Erin B.J.H. Masui, for Petitioner

Shawn L.M. Benton, Scott G. Leong, Christine J. Kim, for Respondents

RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

OPINION OF THE COURT BY WILSON, J.

I. INTRODUCTION

This case concerns a workers’ compensation claim by an employee for an injury-by-disease stemming from his exposure to pervasive mold in his work environment over a four-year period and the subsequent breakdown of his health. The employee, Jay D. Cadiz ("Cadiz"), worked different jobs at various Times Supermarket stores in different locations on O‘ahu for several years. Cadiz then transferred to Times Supermarket in Kane‘ohe, owned by QSI, Inc. ("employer"),¹ where he worked for four years in the meat department as a "meatcutter." Prior to working at the Kane‘ohe store, Cadiz was healthy and exercising daily, including engaging in martial arts. Shortly after moving to the Kane‘ohe store in 2004, he "began to feel sick all the time."

Cadiz filed a workers’ compensation claim for injury-by-disease, and the Labor and Industrial Relations Appeals Board ("LIRAB") rejected Cadiz's claim,² concluding that the employer's reports based on three Independent Medical Examinations ("IME") provided sufficient substantial evidence to overcome the statutory presumption in favor of compensability. See Hawai‘i Revised Statutes ("HRS") § 386–85(1)(1984) ("In any proceeding for the enforcement of a claim for compensation ... it shall be presumed, in the absence of substantial evidence to the contrary: (1) That the claim is for a covered work injury[.]")

"When determining whether a worker's compensation claim is work-related, it is well established in Hawai‘i that ‘it shall be presumed, in the absence of substantial evidence to the contrary ... [t]hat the claim is for a covered work injury[.]’ HRS § 386-85 (1993)." Panoke v. Reef Dev. of Hawaii, Inc., 136 Hawai‘i 448, 461, 363 P.3d 296, 309 (2015). The presumption that a worker's claimed injury is "work-connected" and therefore compensable is one of "the ‘keystone principles’ of our workers’ compensation plan." Flor v. Holguin, 94 Hawai‘i 70, 79, 9 P.3d 382, 391 (2000). That presumption is paramount, in part, because the workers’ compensation statute "provides an injured employee's exclusive remedy for an injury arising out of and in the course of employment." Ihara v. State Dep't of Land & Nat. Res., 141 Hawai‘i 36, 42, 404 P.3d 302, 308 (2017) (internal quotation marks and citation omitted). To rebut the presumption, the employer has the burden of going forward with the evidence, which is the burden of production, as well as the burden of persuasion; the burden of production means that the employer must initially introduce substantial evidence that, if true, could rebut the presumption that the injury is work-related. Panoke, 136 Hawai‘i at 461, 363 P.3d at 309. The burden of production means that the employer must initially introduce substantial evidence that, if true, could rebut the presumption that the injury is work-related. Id.; see also, Korsak v. Hawaii Permanente Med. Grp., 94 Hawai‘i 297, 307, 12 P.3d 1238, 1248 (2000) ("Hawaii's workers’ compensation presumption places a heavy burden on the employer to disprove that an injury is work-related.... HRS § 386–85(1) creates a presumption in favor of the claimant that the subject injury is causally related to the employment activity." (citation omitted, first emphasis added)). Substantial evidence is relevant and credible evidence of a quality and quantity sufficient to justify a conclusion by a reasonable person that an injury or death is not work-connected. Panoke, 136 Hawai‘i at 469, 363 P.3d at 317.

If the employer meets the burden of production, the burden of persuasion requires that the trier of fact weigh the evidence elicited by the employer against the evidence elicited by the claimant. Id. In evaluating whether the burden of persuasion has been met in the workers’ compensation context, "the broad humanitarian purpose of the workers’ compensation statute read as a whole requires that all reasonable doubts be resolved in favor of the claimant." Van Ness v. State Dep't of Educ., 131 Hawai‘i 545, 558, 319 P.3d 464, 477 (2014) (citations, internal quotation marks, and brackets omitted).

For the reasons detailed more fully below, we hold the employer's IME reports failed to provide substantial evidence to meet its burden to produce evidence that, if true, would overcome the statutory presumption that the injury is work-related. As the employer failed to meet its burden of production, we do not reach the issue of whether the employer met its burden of persuasion. Panoke at 462, 363 P.3d at 310.

Cadiz presented laboratory evidence of elevated levels of dangerous mycotoxins in his body. That evidence was never rebutted by the employer's IME reports. Indeed, the employer's IME reports never addressed the scientific evidence of elevated levels of mycotoxins in Cadiz's body in relation to the presumption in favor of compensability. In addition, although the LIRAB's decision and order included the boilerplate language that "all reasonable doubts have been resolved in favor of Claimant," in fact, the LIRAB failed to do so.

Based on the laboratory evidence confirming elevated levels of harmful mycotoxins in Cadiz's body, and based on the employer's failure to meet its burden of production, we conclude that the employer failed to overcome the presumption in favor of compensability. Accordingly, we vacate the ICA's judgment on appeal and its Summary Disposition Order ("SDO"), and we vacate the LIRAB's decision and order in case number AB 2012-099 (2-10-46361) (Cadiz I ).³ We remand to the LIRAB with the instruction that Cadiz's injury-by-disease is compensable under Hawai‘i's workers’ compensation law and for proceedings consistent with this opinion.

II. BACKGROUND

After working different jobs at various Times Supermarket stores in different locations for several years, Jay Cadiz transferred to the Times Supermarket in Kane‘ohe. He worked for four years in the Kane‘ohe meat department as a meatcutter, working eight hours a day, five days a week, with approximately five hours of overtime per week. According to Cadiz, prior to working at the Kane‘ohe store, he was healthy and exercising daily. He engaged in martial arts. Shortly after moving to the Kane‘ohe store in approximately June 2004, he "began to feel sick all the time." The Kane‘ohe store, he said, "was the first dirty store I worked in: molds all over the walls, ceilings, lots of drain[s] with molds, caved in ceilings, crack[s] in ceilings."

According to Cadiz, the mold covered "all the fans, the AC fans, the left side wall was just covered in black mold and the right side of the wall, near the cutting table, it was just black; like pitch black mold just eating up the walls and ceiling," as well as the storage room. The ceiling of the meat department was always wet. Twice, the ceiling fell into the meat department when it rained. The first time the ceiling fell was in early August 2004, a few months after he began working at the Kane‘ohe store.

After a few months of working in this environment, Cadiz began experiencing "breathing problems, asthma

attacks, sinus infections, and debilitating headaches," as well as dizziness and vertigo. Four of the other workers in the meat department at the time also complained of breathing difficulties and other ailments. Beginning in 2007, Cadiz took extensive leaves for illness, and he finally resigned from his job as a meatcutter towards the end of 2008.

For the five years prior to working at the Kane‘ohe Times store, Cadiz averaged eight visits to a doctor or emergency room per year, including visits relating to a concussion he received while performing martial arts. While working in the meat department, he saw a physician or received emergency treatment on average of twenty-six times per year. From August 31, 2007, when he experienced heart palpitations, through the end of 2007, Cadiz sought treatment from medical personnel or social workers forty-three times.

Cadiz brought an initial claim for workers’ compensation in September 2010. In the space on the claim form reserved for a response to "describe how accident occurred," he indicated that the accident occurred when he was working at the Kane‘ohe Times Supermarket and was "exposed to black mold" over four years in his work at the meat department. In the space on the claim form reserved for a response to "describe injury/illness," he responded: "Headaches, dizziness, respiratory problems, memory problems, vision, skin problems, anxiety." Cadiz brought an "amended claim" for workers’ compensation benefits in November 2011, based largely on the same set of facts but this time claiming "exposure to mold" generally, and alleging "additional injuries." The description of the illness in the amended claim expanded to "headaches, respiratory illnesses, cognitive impairment, psychological injury, chronic rhinitis

/sinusitis, vertigo, tinnitus, palpitations, sleep disturbance, myalgia, GERD, gastritis, urinary frequency, dysuria, malaise, fatigue."

In October 2011, Dr. Myles Suehiro ordered a urine test from RealTime Laboratories on behalf of Cadiz in order to detect the presence of any mycotoxins in Cadiz's body. Cadiz tested positive for elevated levels of two mycotoxins; ochratoxin and trichothecene. Mycotoxins are toxins generated by molds or fungi. According to a RealTime Laboratories article cited by both parties:

The negative health effects of mycotoxins are a function of the concentration, the duration of exposure and the individual's sensitivities. The concentrations experienced in a normal home, office, or school are often too

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