CAVCO Industries v. Industrial Commission of Arizona

• Decision Date: 10 July 1981
• Docket Number: No. 15160-PR,15160-PR
• Citation: 129 Ariz. 429,631 P.2d 1087
• Parties: CAVCO INDUSTRIES, Petitioner Employer, Industrial Indemnity Company, Petitioner Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Irieda A. Minney, Respondent Employee.
• Court: Arizona Supreme Court

Page 1087

631 P.2d 1087

129 Ariz. 429

CAVCO INDUSTRIES, Petitioner Employer Industrial Indemnity Company, Petitioner Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent Irieda A. Minney, Respondent Employee.

No. 15160-PR.

Supreme Court of Arizona, In Banc.

July 10, 1981.

Jennings, Strouss & Salmon by Steven C. Lester, Phoenix, for petitioners.

Calvin Harris, Chief Counsel, The Indus. Commission, Phoenix, for respondent.

Chris T. Johnson, Phoenix, for respondent employee.

STRUCKMEYER, Chief Justice.

This matter arises out of a petition to review a Court of Appeals decision holding that the medical opinion on which an award of the Industrial Commission was based was incredible. Cavco Industries v. Industrial Commission, 129 Ariz. ---, 631 P.2d 1094 (App.1980). Jurisdiction was accepted pursuant to A.R.S. § 12-120.24. Opinion of the Court of Appeals vacated. Award of the Industrial Commission affirmed.

Respondent Irieda Minney (hereafter respondent) was involved in an industrial accident on March 18, 1974 in the course of her employment with petitioner employer, Cavco Industries. Her injuries consisted of a fracture of her left patella (knee cap) and strained ligaments in her left thumb. Petitioner carrier accepted respondent's claim for benefits. Four years later it issued a Notice of Claim Status determining that respondent had a permanent impairment of her left leg which entitled her to scheduled compensation. Respondent filed a request for hearing. At the hearing, the impairment in the function of her left knee was not disputed. The only issue was whether there was a permanent impairment to her left thumb which when combined with the leg impairment would give rise to unscheduled compensation. See Engle v. Industrial Commission, 77 Ariz. 202, 269 P.2d 604 (1954).

The hearing officer originally found no impairment to the thumb, rejecting the medical opinion of Richard L. Morgan, M.D. and accepting another physician's finding of no impairment. On a request for review, the hearing officer reversed himself, accepted Dr. Morgan's finding of an impairment to the left thumb, and gave respondent an award for unscheduled injuries.

Petitioners' position is that the award must be aside because "Dr. Morgan's testimony is so suspect that, as a matter of law, it cannot afford a basis" for the award. The premise of petitioners' position is that on April 4, 1978, Dr. Morgan concluded there was no permanent impairment of the thumb. Petitioners contend that after being informed by respondent's attorney that such an impairment would give her an unscheduled award, the doctor changed his opinion and gave her a five percent impairment rating. For support, petitioners point to the doctor's April 4th medical report and his April 18th letter to respondent's attorney.

In his April 4th medical report, Dr. Morgan wrote:

"The patient's left thumb does not bother her unless she does any heavy gripping. X-rays were taken which demonstrate some minimal degenerative changes of the IP joint. The patient has no loss of motion of this joint.

This patient's condition is now orthopaedically stationary. There is no need for further examinations or treatments. The patient can now be discharged with a permanent partial disability equivalent to 20% functional loss of the left leg."

In the letter of April 19th, Dr. Morgan wrote:

"Mrs. Minney was in the office on the 4th of April 1978. The problem referrable to the left thumb and the left leg were discussed with the patient. She does have some degenerative changes of the left thumb and very minimal functional loss of this thumb. It was elected to give the patient primarily her disability referrable to her left leg. This was so done.

From your letter, it appears that you wish to have this patient have an unscheduled disability.

Therefore, I feel this patient has a 5% functional loss of the left thumb. * * *

I hope this will further clarify my evaluation of this patient's condition."

It is true that the April 4th report contains no indication of an impairment rating for the thumb. But this fact is not conclusive. It does not necessarily follow that on April 4th Dr. Morgan held an opinion that there was no impairment, and that he later created or changed his opinion to increase respondent's benefits.

Dr. Morgan's testimony at the hearing establishes that the petitioners' premise that on April 4th Dr. Morgan held a medical opinion of no permanent impairment to the thumb is incorrect. Rather, we believe the evidence substantially supports the hearing officer's modified finding. This finding provides:

"8. * * * that at the time of (Dr. Morgan's) April, 1978 rating, and before he received imput from the applicant or her counsel relative to the type of rating desired, it was in fact his medical opinion that there was at least a minimal, residual impairment of the thumb, but he was reluctant to report it because he felt that it would not provide applicant with permanent disability benefits; thus, rather than the evidence establishing that he came up with an after-the-fact thumb rating solely for the purpose of obtaining benefits for the applicant, it establishes that originally his honest medical opinion was that there was a ratable thumb impairment which he did not report for the reason stated."

This finding followed from Dr. Morgan's testimony in which he explained the reason for not noting the thumb rating in his April 4th report.

"Q. Is there any reason why on April 4, 1978, you discharged Mrs. Minney with no impairment to the left thumb, and instead put the twenty percent impairment solely to the left leg?

A. Yes.

Q. Why was that?

A. I told her that if you do have some minimal degenerative changes of your thumb, and you have some disability or functional loss referable to your left thumb, and if I discharge you with that, you'll be discharged with a general disability. Basically its very minimal referable to the thumb. Your major disability is referable to your leg, and if you get a scheduled disability, then you will receive money for that and it will have no basis on earning capacity. And I also, I put down here, will dictate after patient calls. And I explained this all to her, and I told her if you want a general disability based on her incapacity, call me back and I'll calculate it out like I did in that letter, or if you want to let it stand as a scheduled disability, that's the way it will be.

Q. So, you were going to let her decide?

A. I told her, you could go both ways, you have very minimal disability in your thumb, hardly any; I mean, as little as we could give you.

Q. So you gave her the scheduled, and then you received a letter from Mr. Johnson (respondent's attorney)? A. That is correct.

Q. And Mr. Johnson wanted it to be rated on a non-scheduled basis?

A. He said if there is any disability referable to any other part of the body, then it would be an unscheduled disability, and to rate her totally true with every minimal disability that she has, she should have had a general functional loss of the whole person.

Q. And did you or did Mr. Johnson indicate whether or not he felt an unscheduled would get Mrs. Minney more money?

A. All he said to me let's see he said scheduled awards amount to almost no money in these industrial cases. If there is any difficulty in any other part of the body in the above-entitled case, with the exception of the left leg, the award automatically is unscheduled. And then he went on to say referable to the unscheduled part of this and he really doesn't mention that Mrs. Minney will get more money. " (Emphasis added.)

Pursuant to A.C.R.R. R-4-13-113(D), Rules of Procedure for Workmen's Compensation Hearings before the Industrial Commission of Arizona (former Rule 13(d)), all permanent impairments should be reported. But the failure to strictly comply with the rule cannot be held to be conclusive evidence that no impairment exists. "Rule 13(d) may not be interpreted in such a manner as to deprive a claimant of just compensation." Smith v. Industrial Commission, 113 Ariz. 304, 306, 552 P.2d 1198 (1976).

Our holding is not predicated on Dr. Morgan's credibility, but, rather, because the record must be read in the light most favorable to sustaining the award. See Salt River Project v. Indus. Com'n of Ariz., 128 Ariz. 541, 627 P.2d 692, 695-696 (1981). The record supports the hearing officer's finding that Dr. Morgan believed on April 4, 1978 that respondent's left thumb was impaired and that he did not fabricate an opinion to gain her an unscheduled award.

Petitioners complain that Dr. Morgan in reaching his opinion on impairment did not follow the American Medical Association's "Guides to the Evaluation of Permanent Impairment." We have previously referred to the rule of procedure of the Industrial Commission, A.C.R.R. R-4-13-113(D), which provides:

"If upon discharge from treatment the physician finds that the employee has sustained an impairment of function as the result of the injury, he shall so state in his report. Any rating of the percentage of functional impairment shall be in accordance with the standards of the evaluation of permanent impairment as published by the American Medical Association in 'Guides to the Evaluation of Permanent Impairment'. It shall include a clinical report in sufficient detail to support the percentage ratings assigned."

In Adams v. Industrial Commission, 113 Ariz. 294, 552 P.2d 764 (1976), and Smith v. Industrial Commission, supra, this Court recognized that Rule R-4-13-113 (former Rule 13(d)) does not require a finding of permanent impairment to be based only on the results of tests contained in the AMA Guides. The AMA Guides apply only where they cover the specific impairment and where the percentage of impairment contained therein truly reflects the claimant's loss. See Adams v. Industrial Commission, supra; Smith v. Industrial Commission, supra. These holdings recognize the plain...