Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor v. Universal Terminal & Stevedoring Corp.

• Decision Date: 21 April 1978
• Docket Number: No. 77-1676,77-1676
• Citation: 575 F.2d 452
• Parties: DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U. S. DEPARTMENT OF LABOR, and Michael DeNichilo, Respondents, v. UNIVERSAL TERMINAL & STEVEDORING CORP., Employer-Petitioner, Midland Insurance Company, Carrier-Petitioner.
• Court: U.S. Court of Appeals — Third Circuit

Page 452

575 F.2d 452

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U. S.

DEPARTMENT OF LABOR, and Michael DeNichilo, Respondents, v. UNIVERSAL TERMINAL & STEVEDORING CORP., Employer-Petitioner, Midland Insurance Company, Carrier-Petitioner.

No. 77-1676.

United States Court of Appeals, Third Circuit.

Argued Feb. 14, 1978.

Decided April 21, 1978.

Leonard J. Linden, Linden & Gallagher, New York City, for petitioners.

Carin Ann Clauss, Sol. of Labor, Laurie M. Streeter, Asst. Sol., Joshua T. Gillelan, II, U. S. Dept. of Labor, Office of the Solicitor of Labor, Washington, D. C., for respondent, Director, Office of Workers' Compensation.

Milton Garber, Baker, Garber, Duffy & Baker, P.A., Hoboken, N.J., for respondent Michael De Nichilo.

Before GIBBONS, HUNTER, Circuit Judges, and WEBER, ^* District Judge.

OPINION OF THE COURT

GIBBONS, Circuit Judge.

This is a petition under § 21(c) of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. § 921(c) (Supp.1975), to review a final order of the Benefits Review Board. The petitioners are the Universal Terminal & Stevedoring Corporation and its workers' compensation insurance carrier, Midland Insurance Company (hereafter collectively called the employer). The Board's order affirmed an administrative law judge's award to a longshoreman, Michael De Nichilo, for permanent total disability. The order also affirmed the denial of relief to the employer under the special fund provisions of § 8(f) of the Act, 33 U.S.C. § 908(f).

The employer makes two contentions on this petition. First, it contends that the Board erred in concluding that substantial evidence supported the administrative law judge's finding that De Nichilo's disability, which followed a myocardial infarction, resulted from an injury arising out of and in the course of his employment. Alternatively, it argues that even if De Nichilo's disability is compensable, it is entitled to avail itself of the liability limitation in § 8(f) because De Nichilo had a pre-existing partial disability when the injury occurred on the job. We conclude that the administrative law judge's finding that De Nichilo suffered a compensable injury is supported by substantial evidence in the record as a whole. However, we also conclude that the Benefits Review Board should have afforded the employer the protection of § 8(f).

I. THE COMPENSABILITY OF DE NICHILO'S DISABILITY

On December 28, 1972, De Nichilo reported for work at the Military Ocean Terminal in Bayonne, New Jersey. His normal duty was to operate a forklift inside a warehouse where his employer stuffed and stripped containers. On that day, however, he was assigned as a driver for a group of longshoremen loading cargo on a ship. His task was to bring cargo from remote storage areas to the pier, where it could be hoisted into the ship's hold. According to the testimony credited by the administrative law judge, at about 10:30 A. M. De Nichilo and another longshoreman were directed to pick up several 1000-pound coils of wire which were resting in soft dirt some distance off the paved surface. After unsuccessfully attempting to negotiate their forklifts over the soft dirt, they decided to tow the coils to the paved surface with a hook and a rope. When De Nichilo forced a hook into one of the coils, he experienced chest pains, numbness in his arms, and shortness of breath. The discomfort continued until 4:30 P. M., when he experienced sharp pain and collapsed while attempting to mount his forklift. He was taken by ambulance to the hospital, where he was treated for a myocardial infarction until January 18, 1973. He was discharged from the hospital on that date. However, he has not worked since then and cannot return to work. Prior to December 28, 1972, De Nichilo had a history of heart disease complicated by diabetes mellitus. ¹

At the hearing before the administrative law judge De Nichilo's medical expert testified that there was a causal connection between the extra-strenuous work De Nichilo performed in moving the wire coils and the December 28, 1972 myocardial infarction. The employer's medical expert disputed this, claiming instead that the December 28, 1972 attack was only a natural progression of De Nichilo's pre-existing coronary artery disease. Both experts agreed that De Nichilo suffered from a pre-existing arteriosclerotic heart disease. The administrative law judge credited the opinion of De Nichilo's expert that the December 28, 1972 attack resulted from the stress of exertion during employment. That opinion, although disputed, provides evidentiary support for the administrative law judge's decision. Similarly, there is disputed evidentiary support for the conclusion that De Nichilo's disability is permanent and total. Since the Benefits Review Board properly applied the substantial evidence standard of review under 33 U.S.C. § 921(b)(3), we must affirm its decision. Atlantic & Gulf Stevedores, Inc. v. Director, Office of Workers' Compensation Programs (Aleksiejczyk), 542 F.2d 602, 608 (3d Cir. 1976). We are not free to weigh the evidence ourselves.

II. THE EMPLOYER'S S 8(F) CLAIM

All the medical experts agreed that prior to December 28, 1972, De Nichilo had a heart disease and a diabetic condition which made him more susceptible to a heart attack than someone not suffering from those conditions. The employer contends that even if the attack on that date was work-related, it was a second injury within the meaning of § 8(f). Accordingly, the employer claims that its liability should be limited by the terms of that provision. ²

On June 18, 1976, the administrative law judge held that "(s)ince his (De Nichilo's) pre-existing heart disease and diabetes did not affect his earning capacity, he did not suffer from an existing disability within the meaning of Section 8(f)." App. at 20a. In reaching this decision, the administrative law judge relied heavily on the Benefits Review Board's decision in Aleksiejczyk v. Atlantic & Gulf Stevedores, Inc., 1 BRBS 541, BRB No. 74-202 (1975). But Aleksiejczyk's construction of § 8(f), which the administrative law judge below accepted, was overruled by this court on June 23, 1976, in Atlantic & Gulf Stevedores, Inc. v. Director, Office of Workers' Compensation Programs (Aleksiejczyk), supra.

The employer in the instant case pressed its § 8(f) contention before the Benefits Review Board. By the time of the Board's decision, it had become clear that the administrative law judge's reliance on the Board's Aleksiejczyk opinion was misplaced. Nevertheless, the Board rejected the employer's claim on a ground not considered by the administrative law judge namely, that De Nichilo's prior condition was not manifest to the employer at the time that he was hired. The Board reasoned as follows:

The principal purpose of the special fund in regard to second injuries is to assist the handicapped in obtaining employment. Congress, however, did not intend that all previous disabilities come within the scope of Section 8(f), but only those "manifest" to the employer at the time of hiring. The availability of knowledge of the pre-existing condition to the employer, not necessarily his actual knowledge, is the relevant standard. Pye v. General Dynamics Corp., BRBS BRB No. 76-188, 76-188A (Feb. 18, 1977); American Mutual Ins. Co. of Boston v. Jones, (138 U.S.App.D.C. 269), 426 F.2d 1263 (D.C.Cir. 1970).

The nature of claimant's previous disability, a weakness of the cardiovascular system, was not a disability patently obvious to an employer. There is record evidence that the claimant regularly performed his duties in spite of his heart problems. The employer may have been able to discover claimant's condition through an employment physical, but there is no evidence that the employer availed himself of that opportunity or that the employer had actual knowledge of claimant's previous disability. While the record in this case may indeed substantiate several elements of the employer's argument on the Section 8(f) issue, an essential element has not been established, namely that the previous disability be manifest to the employer at the time of hiring. Therefore, we sustain the law judge's finding that the special fund provisions do not apply to this case.

App. at 28a-29a.

Naturally, the employer endorses our interpretation of § 8(f) in Atlantic & Gulf Stevedores, where we held that the test for a prior disability is a physical one rather than an economic one. A good part of the Director's brief addresses a reconsideration of that interpretation. However, our construction of § 8(f) has been followed by both the Fifth and the District of Columbia Circuits. See C & P Telephone Co. v. Director, Office of Workers' Compensation Programs, 184 U.S.App.D.C. ---, 564 F.2d 503 (1977); Equitable Equip. Co. v. Hardy, 558 F.2d 1192, 1198 (5th Cir. 1977). Only the court in banc could reconsider our decision in Atlantic & Gulf Stevedores. E. g., Krolick Contracting Corp. v. Benefits Review Bd., 558 F.2d 685, 689 (3d Cir. 1977). The present dispute is between two competing insurance funds, and in the long run the certainty of coverage is probably as important as the correctness of our prior holding. Moreover, the underlying congressional purpose in creating the special fund was to encourage the employment of partially disabled persons. We remain convinced that our rejection of the economic test for disability is consistent with that purpose. Thus, we conclude that the administrative law judge erred in applying the economic test for disability.

As we pointed out above, the Benefits Review Board did not rely on the economic test to reject the employer's § 8(f) claim. Instead, the Board ruled that § 8(f) did not apply because the employer had not established its knowledge of the prior disability. The...